GENERAL NEWS
Rising energy costs threaten profitability
The Energy Efficiency Movement( EEM) recently published its third global report on energy efficiency investment in industry. The findings confirm that the case for energy efficiency has never been more widely accepted, and that the gap between commitment and delivery has never been more costly to ignore. The EEM is a nonprofit association which serves over 600 organisations in over 40 countries.
“ Energy now accounts for 23 % of operating costs for businesses surveyed. More than half( 54 %) say rising energy prices pose a moderate or major threat to profitability, a figure that has grown with each successive EEM survey since they began in 2022. In sectors with the highest energy intensity, the exposure is considerably more acute. For these businesses, coping with a permanent energy crisis, managing energy use and managing financial performance have become the same task,” said the EEM.
“ The response across industry has been decisive in intent. Nearly all organisations surveyed( 98 %) are already investing or actively planning to invest— up from 93 % in 2024.
Mike Umiker, Managing Director, Energy Efficiency Movement.
Half are targeting Net Zero within five years. But financial discipline is shaping what gets funded and what is deferred: 83 % require a return on energy efficiency investment within five years, and 40 % within two years. Nearly a third( 31 %) lack the specialist resource to implement projects. A further 29 % report a digital skills gap, and almost a quarter( 23 %) say they do not have sufficient data to justify investment internally. The infrastructure for action is being built; the capacity to act on it is [ falling ] behind,” it continued.
The full report,“ Energy Efficiency Investment Report 2026: Rising energy costs are outpacing the efficiency response”, covers major energy-intensive sectors across North America, Europe, Asia-Pacific and Latin America. Survey respondents were senior decision-makers at small, medium and large organisations
“ The cost of inaction is now harder to justify than the cost of investment, and businesses know it,” said Mike Umiker, Managing Director, Energy Efficiency Movement.“ The share of organisations citing upfront cost as their primary barrier has fallen from 53 % in 2024 to 43 % today. That ten-point drop tells us something important: the financial argument for energy efficiency is landing. But progress is not accelerating to match. The barriers that remain are structural; a shortage of skills, a lack of specialist expertise and, in too many cases, insufficient data to make the internal business case. Those are not problems that you can solve with a cheque.”
The report also points to a significant broadening of where businesses are directing investment. The share of organisations prioritising transportation and logistics has risen from 37 % in 2024 to 49 % in 2026, reflecting a move away from individual asset upgrades toward a systemwide view of energy use. More than 60 % have invested in energy audits and cloud data management to build the foundation for that wider approach.
“ Energy efficiency is no longer a sustainability topic in isolation, it has become a test of industrial competitiveness and resilience,” Umiker added.“ 81 % of organisations say better financing or government incentives would increase their investment, and more than half say they need external support across four or more areas. The tools and the technologies exist. What is needed now is a stable framework across policy, finance and industry to deploy them at the pace this moment demands.” n
www
. energyefficiency movement. com
IMF shares its global economic outlook
At its World Economic Outlook update press conference on 8 July 2026, the International Monetary Fund( IMF) confirmed that the global outlook is being shaped by two powerful forces pulling in opposite directions( the lingering effects of the energy shock from the war in the Middle East and a technology-driven investment boom).
“ So far, the net effect of these forces varies significantly across countries depending upon their exposure to the war and their position in the technology value chain. We are projecting global growth of three per cent in 2026 and 3.4 per cent in 2027, broadly unchanged from April on a cumulative basis. In effect, we expect a V-shaped recovery, weaker growth this year relative to our pre-war forecast, followed by a rebound next year,” commented Petya Koeva Brooks, Deputy Director, Research Department, IMF.
“ On inflation, the picture is somewhat less encouraging. Global headline inflation has been revised up to 4.7 per cent this year, while our core inflation forecast is broadly unchanged. Put simply, the disinflation trend that has been in place since early 2024 has stalled,” she continued.
“ Nevertheless, the world economy has weathered the shock from the war better than feared so far, with limited evidence of second-round effects. A larger spike in oil prices was avoided thanks to inventory drawdowns, expanded production outside the Gulf and actions to help soften oil demand. And a steady rise in the renewable energy share, combined with lower energy intensity than just a few years ago, has also made many economies more resilient. While financial conditions tightened sharply in April, they have since eased and remained supportive by historical standards,” she added.
The IMF’ s forecast assumes that the Strait of Hormuz begins reopening in mid-July, with conditions normalising to the pre-war state by March of 2027. Commodity price assumptions are based on market pricing as of 10 June 2026, which implied an average oil price of US $ 89 per barrel for 2026. It also assumes policy and geopolitical uncertainty remain elevated throughout 2027 and that the AI-driven technology cycle moderates with no exogenous boost to productivity.
“ The risks to this outlook remain tilted to the downside, and there’ s a lot of uncertainty. A renewed escalation in the conflict could reignite commodity price volatility, tighten financial conditions, strain policy buffers and worsen food insecurity in low-income countries,” cautioned Brooks.
“ A market correction driven by a reassessment of AI profitability is another key downside risk. On the upside, faster AI adoption could lift growth and a swifter than expected normalisation of trade through the Strait of Hormuz would also be a positive surprise,” she concluded. n
www. imf. org
6 | ismr. net | ISMR July / August 2026