Financial, legislative and reputational risks associated with energy use are increasing for businesses, warns a new white paper commissioned by npower from the London School of Economics (LSE).
According to the latest statistics from npower’s Business Energy Index, businesses now rank energy as posing a greater risk than credit and security or health and safety.
“The risks faced by UK business related to energy will continue to grow. Energy price volatility and increases, reputation and price risks from carbon regulation, and increasing regulatory and technological complexity all combine to ensure energy will continue to pose a significant risk for UK businesses moving forward,” says Samuel Fankhauser, author of the paper and principal research fellow at the Grantham Institute on Climate Change and the Environment at the LSE.
To manage these risks, businesses need to ensure that energy is considered at board level and that effective risk management strategies are pursued that bring together energy consumption and procurement.
“Our aim in commissioning the white paper was to reveal the risks energy poses to businesses, show how they are likely to change in the future and ultimately, how organisations can manage these risks,” explains David Cockshott of npower.
Energy suppliers will have a new role in the future to help businesses manage these risks, he says.