What accounts for the relative lack of concern? I’d argue that CEOs are underestimating the ways climate change will intensify the top threats they ranked ahead of it, from populism (tenth) to over-regulation (first).
In this article, I’ll discuss various ways climate change amplifies other top threats, with a focus on three in particular: cyber threats (ranked fourth), availability of key skills (sixth), and the speed of technological change (eighth).
Cybersecurity and the energy sector
CEOs clearly worry about cyber-attacks on their own companies. But what about attacks on the energy infrastructure that keeps the lights on for their businesses?
The threat of grid outages and business disruptions is growing. A few key statistics:
- The U.S. grid is composed of nearly 10,000 power plants, with 1,800 different owners and thousands more operators, each maintaining varying levels of cybersecurity.
- Add to that millions of digital controls and a growing array of smart devices, presenting nearly limitless entry points for attacks.
- Utilities face thousands of daily cyber intrusion attempts; a single utility reported 10,000 attempts per month.
There’s a significant chance that hackers can shut down power at any moment. But how does climate change intensify these cyber threats?
Climate change places two additional stresses on the grid: increasing extreme weather as well as a growing need for resiliency and efficiency. To respond to these two challenges, the grid must become smarter, more autonomous, and self-healing. But that requires adding millions more IoT devices. And because each of these devices, if not properly protected, could offer attackers an entry point, cybersecurity vulnerabilities will multiply.
Make no mistake: We still need a smart, IoT-connected grid, and grid cybersafety strategies do exist. But either way, it’s getting riskier to depend completely on grid uptime for your business uptime. Beyond cyber threats, the wildfire-caused California power shutoffs in October 2019 are another cause for concern. The overall economic impacts of these shutoffs may amount to as much as $2.5 billion.
Now is the time for proactive measures. Hospitals, data centers, and other critical facilities have already successfully adopted islanded microgrids to gain complete control over energy generation. And a new financing model, energy-as-a-service, eliminates upfront costs of building microgrids, promising to speed adoption even further.
The workforce of the future
CEOs are also deeply concerned about the availability of a skilled workforce. According to the PwC study, it’s been a top 10 CEO concern for over a decade.
In contrast, millennials (currently the largest generation in the workforce) and Generation Z share the same top concern: climate change. And this concern translates into a clear preference: 70 percent of millennials want to work for a company with a strong environmental agenda.
The fight for top talent is no longer simply a matter of financial compensation. Nine out of ten millenials would take a pay cut to work for a company with a meaningful purpose. The writing is on the wall: If you want to attract the skilled workforce of the future, your company must actively engage on climate change.
Adapting to technological change
CEOs’ number eight concern in 2020 is keeping up with the speed of technological change. What’s a major driver of technological change? Climate change.
Organizations around the world are innovating furiously toward a sustainable future, disrupting all kinds of industries: agriculture, with new plant-based alternatives to meat; packaging, with green materials; lighting, with the rise of LEDs; and many more.
Nowhere will this innovation cause more disruption than the energy sector — which touches every business. The new energy revolution will be digitized, decarbonized, decentralized, and electrified. Electricity will no longer flow in one direction, from coal-fired power plant to plug. Two-way power flows, renewables, and microgrids will give end-users dramatically more control over how they generate, store, and consume electricity.
Although many CEOs see technological change as a threat, we at Schneider Electric see it as an opportunity. The central strategy to fighting climate change is to do more with less energy and fewer resources — a central goal for any business.
Notice how all three threats discussed in this article are interconnected: As new cyber and climate threats arise, new technologies emerge in response. But it takes skilled workers to implement these strategies successfully.
Underlying these connections is the fact that climate change is transforming the way we all use energy. The current models are not working; globally, carbon emissions have yet to decline, putting us all at risk. Yes, the private sector has made more commitments to solve the problem, but overall, it’s been slow to adopt the necessary transformative measures.
Our own CEO’s perspective
Schneider’s CEO, Jean-Pascal Tricoire, is pushing hard to rally the business community around climate action. His central message: sustainability simply makes good business sense, and we must all act right now.
The good news: Companies like ours are have proven strategies for digitizing, decarbonizing, and decentralizing energy. In our recent report on digital transformation, you can find concrete ROI data from thousands of our customers. If you’re looking for the business case of how sustainability drives business results, look no further.
If you’re looking for a trusted advisor in your sustainability journey, our Energy & Sustainability Services team has guided thousands of companies toward a net-zero future. Find out more about our team here.