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Energy concerns are impacting business competitiveness, the workforce and decarbonisation

21 April 2023

New research published by ABB shows that businesses around the world remain concerned about the impacts of energy security and prices.

According to ABB Electrification’s Energy Insights survey of 2,300 leaders from small and large businesses across a range of sectors, 92% of respondents feel that the continuing instability of energy is threatening profitability and competitiveness. Energy costs and insecurity are having a significant impact on the workforce with decreased investment in employees. Business leaders are also concerned about the potential impacts of meeting their sustainability targets.
 
Rising energy costs and insecurity are forcing business leaders to rethink how they operate and where they invest in their businesses, to grow and remain competitive. The key impacts on businesses due to rising energy costs in the last year include lower profit margins and cuts to spending in some areas, leading to a shift away from investment in R&D and other business growth initiatives.
Over one-third have, or plan to, reduce technology investment, while one-third expect to cut spending on infrastructure and 31% foresee a decline in marketing spend.
 
Respondents also cite concerns that energy pricing and insecurity could delay progress on climate change, with meeting carbon reduction commitments currently considered less of a priority than reducing energy costs. Over half of business leaders surveyed said the cost of energy could delay achieving their sustainability and carbon reduction targets by anywhere from one to five years. While reducing energy costs is the top priority for 61% of companies, only 40% currently have reducing carbon emissions within their overall business priorities.
 
Business leaders also expressed concern about the security of their business’s energy supply, and many are taking action to address energy insecurity and fluctuating energy prices. Over one-third are worried about further rises in energy costs, 31% are concerned by power cuts and blackouts, and one-quarter by energy rationing. 
 
While businesses overall want to take proactive actions to address their energy challenges, one-third are being put off by the perceived cost of implementing energy efficiency measures, and almost half feel they don’t have the know-how or resources to proceed.


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