Marsh McLennan is proud to be partnering with Utility Week for the third consecutive year to develop insights into the rapidly changing risk landscape faced by the UK utilities industry.
Drawing from an extensive survey of senior leaders at energy and water utilities, combined with in-depth interviews, the UK Utilities Risk Report 2024 offers a comprehensive analysis of the major risks anticipated over the next five to ten years with insights on steps to mitigate its impact.
Cybersecurity, slow policy evolution and geopolitical volatility, have emerged as the top risks facing utility companies.Â
The march of technology coupled with geopolitical volatility and growing presence of threat actors is providing utilities with their greatest risks; a serious cybersecurity breach.
63% of energy networks and retail companies ranked cyberattacks as the most likely risk.
100% of energy retailers and water companies rated the impact of cyberattacks on their organisation as severe, underscoring the critical importance of robust security measures.
The biggest potential risks are centered on losing skilled workers to other sectors and maintaining skillsets to keep pace with changing requirements.
67% of water companies believe that young people do not see the sector as an attractive career path.
4 out of 5 respondents across the sector rated the impact of being enticed away from the industry as high, emphasising the need for talent retention strategies.
Extreme weather events remain the most likely risk for utilities, with 82% of water companies believing it will become a significant concern.
78% of energy retailers anticipate that the cost of essential resources, driven by climate change, will pose a risk over the next 5-10 years, highlighting the need for sustainable practices.
The second biggest risk this year across all utilities is the slow development of policies and lack of detail to enable future investment.
89% of energy retailers believe that geopolitical volatility or international conflict will cause major disruptions, emphasising the need for proactive risk management.
The dominating societal risk has shifted from last year's 'ability to pay' to 'misinformation' and 'population growth'.
47% of energy networks believe that a major public backlash against the cost of net zero is likely, highlighting the importance of effective communication and stakeholder engagement.