"So What Now?" — Helping a Utility Turn Climate Risk Awareness into Action
The request seemed straightforward enough. The sustainability group at a major U.S. electric utility was looking to put together a governance document addressing climate adaptation across their company. A member of that group reached out to the Association of Climate Change Officers (ACCO), the leading professional development organization for leaders addressing climate change in their organizations.
It quickly got more complex. The utility wasn't just looking for a document to identify a list of things that needed to be considered. They were looking for a beginning-to-end roadmap identifying changes that needed to be made to practices, assets and programs. They needed more than just recognition that the climate is changing. The question they were struggling with was, "So what now?"
That question — "So what now?" — has stuck with me ever since. In our increasingly complex world, many companies find themselves aware of various risks while also uncertain what to actually do about those risks.
Recognizing the complexity of the ask, ACCO reached out to GoPedal for help architecting an enterprise-wide climate risk assessment and mitigation program for this utility. Some people might run from that type of challenge as quickly as possible. Heavily regulated industry. Complex corporate structure with a parent company and multiple operating companies. A highly uncertain risk that is difficult to quantify.
Not us. We rolled up our sleeves and started digging in.
The awareness/action gap has a structural cause.
Most large organizations are aware of climate risks. They show up in sustainability reports. They get disclosed in regulatory filings. The problem is that awareness and action are not the same thing, and translating awareness into action is more complex than most people realize.
One of the big reasons for this gap is organizational. Getting an enterprise-wide program off the ground in an electric utility requires coordination across functions with different areas of subject matter expertise. For example:
Corporate sustainability groups are responsible for climate-related issues, but these teams tend to focus on environmental stewardship and reduction of the organization's environmental impact. They don't focus on operational management of external environmental risks and often lack expertise in enterprise risk management, operations and/or engineering.
Enterprise risk management functions tend to operate on shorter planning horizons and lack subject-matter expertise on the impacts of climate change, as well as engineering and operations.
Engineering teams have the best understanding of the capabilities and limitations of the network, but they often lack expertise in climate science and risk management.
Dedicated regulatory and legislative affairs teams are tasked with staying abreast of the latest developments and providing advocacy on important issues. Because many state commissions have not yet opened proceedings to tackle climate risk and adaptation, those internal teams often are not yet well versed in those issues.
These functions don't always work together, and no one of them has authority to drive changes across multiple areas in the organization.
Addressing climate risk requires all of these. You need climate expertise to understand what's coming. You need engineering expertise to translate climate projections into likely network impacts and determine how to measure those impacts and set goals. That's easier said than done, because climate model outputs don't speak the same language as infrastructure planning. You need risk management expertise to evaluate exposure and mitigation options in a way that supports responsible decision-making. And you need regulatory and legislative experts to provide insights and advocacy to maximize the chance of getting regulatory approval where necessary. Getting an enterprise-wide program off the ground means getting these functions coordinating in ways they typically don't.
Another thing that became clear as we assessed the landscape was the role of subject-matter expertise. Most large, sophisticated organizations have deep subject-matter expertise across their different business functions, and this utility was no different. Each of the involved functions had professionals with decades of experience in their roles, along with external resources to provide even more specialized expertise where needed.
After 30+ interviews at the VP and Director level, we knew that was the case for this utility. Between their in-house experts and the expertise of ACCO, this project didn't need another subject matter expert. They needed help figuring out how to pull it all together into an actionable plan that fit this organization's structure and resources.
That was the "So what now?" And that's the problem we were brought in to help solve.
Creating alignment was key to bridging the awareness-action gap.
The heart of the work came in pulling their experts and resources together — figuring out where the gaps and barriers were and how to address them, designing an analytical framework that leveraged existing data and resources as much as possible, and creating working groups and a governance structure to ensure the work would get done. That process took dozens more calls with subject matter experts across all of the impacted functions, at both the operating company and parent company levels. And once we began designing the framework for the program, we circled back to those experts for feedback.
The full details of how we addressed these challenges, including governance, risk methodology, organizational alignment and training, can be found in our case study at thegopedal.net/electric-utility-case-study.
The biggest measure of success for the program we helped architect was that executive leadership approved the program without modification the first time through. And one year later, the client is on track to hit its initial goal of completing the first assessment cycle in three years. That was possible because we were committed to the alignment work from the start.
If your organization is trying to figure out how to move from awareness to action — asking "So what now?" — let's talk.
