With the International Energy Agency's (IEA) assessment of a 30 year US$16 trillion energy sector investment requirement, effective business reporting and communications will be a critical issue for the sector and it is anticipated that global market leaders will be early adopters.

"The sector needs to protect and lift annual capital raising levels significantly if it is to meet the IEA's investment assessment of the 2030 investment requirement," reported Michael Bray, global executive partner, KPMG's Energy & Natural Resources practice.

A KPMG paper delivered by Bray at the World Energy Congress, 'Business Reporting and Communications - Promoting adequate investment in the energy sector' emphasises the importance of having the right conditions and dynamics established to promote such energy sector investment.

"One of the critical dynamics that will contribute to raising the necessary capital to meet the IEA's assessment of the investment requirement is a move towards a new model of business reporting and communications, as there are significant limitations in the current reporting and communications model that will hinder the promotion of the necessary investment."

"A new model of business performance reporting and communications is also required for the sector and businesses in it to maintain sound reputations and protect their licenses to operate as they go about raising the required capital to execute their strategies at a reasonable cost," added Bray.

"The dividends available for rapidly implementing a business reporting and communications model centre on improving the precision of key stakeholder decision-making models and processes."

"We need to focus on certain critical areas in a new model, such as stimulating improved stakeholder understanding of business strategies and business models; synchronizing stakeholder decision making models with business performance reports; and precision in stakeholder decision making processes based upon insights about performance drivers and risks and the performance outlook. Improved understanding, synchronization and precision in these areas will produce more effective, efficient and forward-looking allocation of capital.

"Balancing the performance reward equation will require detailed strategic planning through business reporting and communication strategies, with all key players in the energy sector needing to fulfil their defined roles and responsibilities to realize the energy sector reporting and communications mission."

Bray continued, "The comprehensive and integrated reporting and communications model must by 2010 be 'bullet-proof' at the sector level, continuing to optimize stakeholder decision making in the sector and making the sector a viable choice for capital providers in the face of intense competition from other sectors."

"Adopting a new model of business reporting and communications by 2010 cannot ensure that the US$16 trillion capital requirement will be fulfilled by 2030. It can however create one of the necessary pre-conditions for the energy sector to cope with the requirement and any disruptions and inevitable surprises in the race for capital between 2010 and 2030."

"If the move to a new model of business reporting and communications does not begin now, there is a significant risk that the required sector investment will not occur, which will have huge financial, social and environmental consequences. Fortunately, the situation can be managed as long as a start is made now," concluded Bray.