Four out of five businesses are concerned about their energy security; 36% are afraid that energy costs will increase further still. Meanwhile, 58% of businesses said the cost of energy will delay them meeting sustainability targets; rising energy costs will reduce spend on R&D and investment in workforce training, salaries, and recruitment.
The 2023 ABB Energy Insights Survey of 2,300 leaders of large and small businesses worldwide reveals energy insecurity and high energy prices are a catalyst for a range of long-term environmental, social and economic impacts, including reduced investment in industrial decarbonisation and the workforce.
Almost every business leader surveyed (92%) said rising energy costs are a threat to their profitability and competitiveness and four out of five (83%) were concerned about their energy security. More than half (52%) agreed that energy prices were a bigger threat to their business today than the challenges presented by COVID. Over a third (36%) were concerned that energy costs will continue to rise and 31% were concerned about the impact of potential blackouts or supply disruptions on their business.
Delaying decarbonisation
Delivering sustainability targets is considered less important than reducing energy costs, which could delay achieving decarbonisation commitments. Reducing carbon is a priority for 40%, while reducing energy costs is the priority for 61% of businesses. 58% said the cost of energy will delay them achieving their sustainability and carbon-neutral plans, with potential delays between 12 months and five years.
Impact on people, business investment and future growth
Insecurity about energy is prompting businesses to re-evaluate future spending plans with a shift away from investment in people. Businesses say they will reduce spend over the next 3-5 years in key areas as they allocate more budget to energy costs. 42% will spend less on recruitment, 37% will reduce investment in staff training and 38% will reduce salaries, overtime or bonuses. 22% will reduce their R&D budgets.
Morten Wierod, President, ABB Electrification, said: “Businesses say they need to insulate themselves from energy prices and energy insecurity and they are re-evaluating future spending plans. Taking action to reduce energy costs is a clear priority but this doesn’t have to be a catalyst for future workforce and environmental impacts. Investing in smart and sustainable renewables and energy efficiency technology means businesses can simultaneously cut costs and reduce their emissions. With the right approach, industry leaders won’t have to trade off climate or growth goals to bring their energy bills down.”
How businesses can improve their energy efficiency
Improving industrial energy efficiency is the fastest and most effective way for a business to cut energy costs and greenhouse gas emissions. Mature, widely available technology solutions are available today that can help reduce costs, offer energy security and help tackle climate change.
For example, at the world’s tallest building, the Burj Khalifa in Dubai, predictive maintenance technology has reduced operational costs by up to 30%. At a telecoms HQ in Hanoi, smart building technology reduced energy costs by 20%, while retrofitting hardware and using energy management solutions at an ABB factory in Italy has led to 30% energy savings.
To enable businesses worldwide to share best practices and collaborate for a more energy-efficient world, the Energy Efficiency Movement was launched by ABB in 2021. This global forum of more than 200 organisations showcases energy efficiency ideas and tangible, mature and scalable solutions that can help industry lower costs, mitigate energy security challenges and speed climate action. Visit the Energy Efficiency Movement website for more information.
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