Energy risk top of mind for non-executive directors: Gartner

Energy is increasingly being raised in the boardroom as a strategic issue, associated with risks including supply, costs, and emissions according to Gartner.

Gartner’s 2022 Sustainability Survey revealed that executive leaders are citing energy risk as a barrier to achieving business goals and without addressing the risk, believe it may restrict long term success.

According to the report, “Enterprises still fail to identify energy-related risks and have been slow to take risk reduction action, improve resilience and meet tightening environmental goals, while retaining or creating new competitive advantage.”

Energy supply

In order to mitigate energy supply risks, mature businesses are investing in storage, and on-site generation.

The Gartner research indicates that conflicting priorities and ROI are the biggest challenges affecting energy supply and consumption for 40 percent of surveyed leaders.

Costs

46 percent of business leaders name cost as a moderate to significant business disruptor over the past year and 52 percent believe increasing energy costs will be passed on to consumers.

According to the report, “Cost is front of mind for 72% of the surveyed business leaders when making decisions about energy. However, cost is just one dimension of the energy challenge. Our survey also found that C-level respondents are significantly more likely to rank environmental accountability as their top factor compared with the non-C-level respondents.”

Emissions

While enterprises increasingly commit to decarbonisation targets, many organisations are focusing on monitoring, measuring and mitigating their greenhouse gas emissions. Strategies including voluntary carbon offsetting and direct investment in renewable energy projects, are being undertaken as organisations seek to meet ESG regulations and their own sustainability objectives.

Gartner encourages executive leaders that are responsible for sustainability, including energy cost, security and decarbonisation to focus on governance and people and processes, to develop internal carbon pricing strategies, look for double wins such as sustainability objectives that also reduce costs, as well as to create a low-carbon roadmap.