This short article reflects on a thought leadership piece I co-authored five years ago while at IMD Business School. The topic was energy security. However, national energy security was not the focus, it was business instead. At the time, the ideas and recommendations were a little forward-thinking and potentially speculative. Noticing the trends of the last 12 months around renewable energy though, it seems it is starting to ring true.
Five years ago I was invited to write a thought leadership piece with Professor Corey Billington on energy to coincide with the International Renewable Energy Association (IRENA) conference in Abu Dhabi. Having both been heavily involved with IMD’s flagship Global Trends project, energy security kept coming up as a major global issue, and the article took a “futurist” type look at how energy security is actually an important issue at a corporate or industry level too.
The article is available to read here: http://www.darrenwillman.com/published-secure-your-long-term-energy-supply
Since the article, the priorities and material issues in the world of corporate sustainability evolved. From factory working conditions and countries of operation in the 1980’s and 1990’s, to climate change in the late 1990’s and 2000’s and now to supply chain impacts in the 2010’s. Climate change has steadily declined in attention, eclipsed and replaced by renewable energy. As I had hypothesised in the article, energy security is becoming a major corporate issue, and renewable energy is seen as a good strategy to tackle it.
Several examples come to mind immediately. Microsoft, Facebook, SAP, Apple, Amazon and Digital Realty lead the IT sector in moving towards 100% renewables. Reinforcing this corporate trend is the Business Renewables Centre (BRC) of the Rocky Mountain Instutite, which was established last year to help American businesses understand how to procure high quality renewable energy among other things. In Australia, commercial solar PV is all the rage these days with schools, office buildings, aged care facilities, car dealerships, data centres and warehouses all taking the step. Renewable energy is a movement, and it has connotations of cleanliness, purity, innovation and a better future.
Revisiting the original article, it looked at some global energy trends before using the United States as an example of a system that does not look like it has been or will be effective. We consequently encouraged businesses to think about energy security.
It is of our opinion that business needs to start preparing for future energy issues. Governments can only take us so far.
The commentary on the United States must have been a contribution of my co-author, but regardless, the essential point is that governments should not be relied upon. Business needs an extra layer of assurance to manage its own risks.
With governments struggling with their own systemic issues, energy supplies will become expensive if not scarce. Soon business will not be able to expect low energy prices and easy availability and therefore will need to sacrifice its existing consumption pleasures. To maintain consumption, business would need to compensate the lack of energy coming from the grid.
Business must do two things: become more energy efficient and/or buy energy generators for themselves, preferably renewable.
The trends in renewable energy now demonstrate that exactly this is happening. Energy security is a material issue for business.