Everyone is talking about it.

It’s big. It’s complicated, and some roadmaps are missing key directions.

“Most companies we talk to can see their way to half of the ambition that they have,” Darryl Willis, corporate vice president of the energy sector for Microsoft, said of the energy transition and net-zero goals. “But the other half requires technology and partnership and innovation that has not been created.”

The drive to reduce emissions and move to a lower-carbon world is pushing the boundaries of companies involved in sustainably producing affordable energy to meet global needs. Unstopped by the COVID-19 pandemic, which slowed oil activity but strengthened the roles of digitalization and automation in energy, many industry players are pushing forward on long-term plans despite the uncertainty brought by daily swings in oil and gas prices.

Speaking in late June at a Baker Botts event at The Ion, billed as Houston’s nucleus for innovation, collaboration and inclusion, Willis and fellow panelist Barbara Burger, president of Chevron Technology Ventures, agreed that reaching net-zero goals is impossible without partnerships and further innovation.

“If we’re going to go to a lower-carbon future, we need to be able to count carbon, count it in the same way and have good standards,” Burger said during the Ion Innovation Summit. She added collaboration between tech companies, producers and users along with transparency and standards around carbon are other pieces of the puzzle. “If we don’t get that right, there isn’t going to be confidence that the innovation, the scale, the investments that are being made are actually contributing to a lower-carbon future. That’s an underlying set of challenges that we’re all taking on.”

Since Chevron Technology Ventures launched in 1999, it has invested in more than 100 companies and over 80% of their offerings have made their way into Chevron Corp.’s operations, Burger said.

Chevron’s Core Venture Fund focuses on technologies that add efficiency to core business in areas such as operational enhancement, digitalization and lower-carbon operations. Its younger Future Energy Fund is centered on innovations such as carbon capture, emerging mobility and energy storage, according to the company website. Since launching in 2018, the Future Energy Fund has invested in more than a dozen companies.

Earlier this year, Chevron launched a $300 million fund focused on low-carbon technology.

“We need more innovation, not less, because the challenges that we see going forward require new technology, new business models, new thinking,” Burger said. However, scalability is crucial.

Microsoft, which aims to become carbon negative by 2030, created last year a four-year $1 billion climate innovation fund. The company said it targets areas such as direct carbon removal, digital optimization, advanced energy systems, industrial materials and water technologies among others.

“The biggest, craziest, hardest ideas are the ones we want to fund because we believe those will be the most transformational and there’s lot of work to do,” Willis said.

Everyone is trying to figure out how the energy transition will change their business and different types of relationships are emerging as competitors join each other, customers and suppliers team up and energy players reach out to nonenergy experts working to fill technology gaps. It’s this nature of venture capital that Burger said she enjoys.

“It’s actually the diversity of those investors that make for a more supportive structure around that startup. If they all just look like us, then we’re all bringing the same tools,” Burger said. “So, I think we’re all realizing that we can’t solve this alone. We need collaboration. We’re a little awkward like the eighth-grade dance. We don’t always know how to work with new players, but I think the environment is ripe to start having those conversations.”

In addition to Chevron, Willis mentioned Microsoft has relationships across the energy sector including with Schlumberger Ltd., Royal Dutch Shell Plc, BP Plc and Repsol SpA. He noted the companies approaching Microsoft are not just seeking hardware or outlooks, but input on solving problems because they realize the tech company also has decarbonization goals.

“This energy transition is incredibly complicated. It’s easy to talk about it, but it’s going to be really hard to deliver it and partnership is so key. … It creates a unique opportunity for us to come together and figure out how to trust each other, where a Chevron will bring all of its capabilities and strength to the table and Microsoft brings its capabilities to the table and we both work on what we’re good at and try not to get in each other’s this way.”

As Microsoft executives have spoken to oil and gas, utility and mining companies, Willis said conversations are about how daily operations are run; leveraging data to make businesses safer, more efficient and more reliable; transitioning to clean energy and reimaging energy by diving into what it means to run a smart grid or smart city and how data informs decisions.

The pandemic accelerated digital and the energy transition, he added, recalling Microsoft CEO Satya Nadella’s 2020 comments that the company saw two years’ worth of digital transformation in two months. In April 2020, Microsoft saw more than 200 million Microsoft Teams meeting participants in a day as workers transformed homes into offices due to lockdown and stay-at-home orders at the onset of the pandemic.

For Chevron, the pace has picked up, accelerating investment, collaboration and development of technology. Its latest investments include Ocergy Inc.’s development and commercialization of offshore wind turbines and Starfire Energy’s new carbon-free ammonia production technology.

“What seemed like a good enough pace a year ago is no longer the case,” Burger said.

“Innovation happens when the status quo looks like it needs to be disrupted and changed,” she added. “The pandemic was a great venue for doing it.”