Utility Week

UTILITY Week 20th March 2015

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/480604

Contents of this Issue


Page 13 of 31

UtilityWeek 14 | 20TH - 26TH MARCH 2015 | UTILITY WEEK Resilience What does it mean to be resilient? The World Economic Forum's annual report on global risks has become the benchmark for measuring improvement or decline. T he World Economic Forum's (WEF's) annual risk report provides a window into a daunting world of intercon- nected risk. Now in its tenth year, the report has steadily gained ground as a respected source of insight into changing trends and sentiment among policymakers, business leaders and economists about the forces they believe could cause major disruption to their strategies or operations. Most importantly, the report and its find- ings from year to year have become a foun- dation for planning resilience – both for individual organisations and institutions, and for "ecosystems" of organisations and institutions. The report tracks rising threats to resil- ience across multiple categories, includ- ing economic, environmental, geopolitical, societal and technological risks. These are tracked in terms of the risks they pose to resilience on the basis of both impact and likelihood. The 2015 edition of the report contains some interesting findings for utilities, most notably in rising global concern about extreme weather events, water shortage, the ability of governments, social groups and businesses to adapt to climate change and increasing fears around loss of biodiversity and ecosystem collapse. These increasing concerns might well herald more intense focus on sustainability and climate change policy across borders in 2015 – as indeed we might expect in the lead- up to a major United Nations climate change conference, which will be held in Paris in December this year – and utilities should be prepared to respond. Within the economic risks section, it is also notable that the perceived risks around energy stock prices increased significantly on previous years on both likelihood and impact axis, as did concern about the failure of national infrastructure, though to a lesser degree. Utilities must face up to their role in miti- gating these risks, and other risks too such as urbanisation and cyber attack, which over- lap directly with their operations, purpose and future plans, and which will affect their financial performance if not addressed. The question is, are they open-minded enough to collaborate, within the industry and beyond it, to take steps which will make a difference to resilience? Research: why resilience matters THE RISKS-TRENDS 2015 INTERCONNECTION MAP Likelihood Interstate conflict Extreme weather events Failure of national governance State collapse or crisis Unemployment or underemployment Natural catastrophes Failure of climate-change adaptation Water crises Data fraud or theft Cyber attacks Impact Water crises Spread of infectious diseases Weapons of mass destruction Interstate conflict Failure of climate-change adaptation Energy price shock Critical information infrastructure breakdown Fiscal crises Unemployment or underemployment Biodiversity loss and ecosystem collapse Categories Economic Environmental Societal Technologicial Geopolitical Economic risks Increasing national sentiment Rise of hyperconnectivity Interstate conflict Profound social instability Failure of national governance Weakening of international governance Increasing polarisation of societies Shifts in power Ageing population Rising income disparity Growing middle class in emerging economies Rising geographic mobility Urbanisation Climate change Environmental degradation Rise of chronic diseases Water crises Failure of climate- change adaptation Food crises Failure of urban planning Unemployment or underemployment Fiscal crises State collapse or crisis Extreme weather events Biodiversity loss and ecosystem collapse Environmental risks Geopolitical risks Societal risks Technological risks Trends Number and strength of connections ("weighted degree") THE TEN GLOBAL RISKS IN TERMS OF LIKELIHOOD AND IMPACT 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 20th March 2015