CEOs pass on higher energy costs by raising product prices

Increasing prices and cutting consumption in response to energy crisis

CEOs will respond to higher energy costs in the coming period by reducing consumption and increasing the prices of their products and services. This is one of the key findings of PwC’s 26th CEO Survey and one that makes perfect sense to PwC energy expert Paul Nillesen: “These are the only control switches that CEOs can turn to in the short term.”

Switching to different energy sources

The CEO Survey shows that 34 per cent of respondents are in the process of switching energy sources and Nillesen sees that as good news . “Moving to a different energy source is incredibly difficult and demands a lot from a company. The related redesigning of processes takes time, money and technical expertise. The fact that the necessary infrastructure is lacking in many places in the Netherlands adds to the complexity.”

CEOs often still preparing ‘green’ measures instead of implementing

The survey of CEOs shows that action to combat climate change is not high on their priority list in these turbulent times. Short-term concerns revolve more around inflation, economic volatility and political instability. The survey results also reveal that a large number of companies are already taking measures in areas such as CO2 reduction and more environmentally friendly production methods. Many of those measures remain, however, in the preparation stage and have yet to be implemented.

Don’t underestimate the energy transition

Paul Nillesen stresses that companies should not underestimate the energy transition. “The biggest concerns of CEOs cannot be viewed in isolation from climate change and the energy transition; they're two sides of the same coin. The fact that we're now facing an energy crisis shows how interconnected energy, climate, geopolitics and inflation are. The higher prices are a consequence of the energy crisis – it's as simple as that.”