Financial and risk-related dynamics in energy management strategies: a South African perspective

Abstract

The adoption of energy strategies is increasingly crucial for organisations, driven by the need to decrease energy cost and greenhouse gas emissions. The research evaluates the financial and risk-related factors influencing energy management strategies within South African organisations. The study delved into various financial aspects such as bank loans, corporate sponsorships, government funding, tax rebates and own funding alongside risk factors including disaster, reputational, operational, regulatory, strategic, financial, market, liquidity and credit risks. Using a quantitative non-experimental research design, data was collected through a questionnaire from 142 participants in the financial services industry, yielding a response from 77 individuals. Results indicate a predominant use of internal funding for energy projects, with limited utilisation of external funding options. Financial benefits such as reduced operating costs and potential tax rebates were acknowledged, yet challenges including high capital investment and inadequate finance were highlighted. Furthermore, risk management emerged as integral, although the involvement of risk management departments in energy strategy formulation was limited. Identified risks varied with disaster, reputational and operational risks ranking the highest. The study underscores the need for greater integration of risk management into energy strategy development to effectively address risk exposures. Organisations must balance the approach to energy strategy implementation with the organisational objectives and environmental responsibilities. Further research opportunities exist to explore alternative financing methods and address existing barriers to optimal energy strategy implementation.

Keywords: {'name': 'Energy strategies'}, {'name': 'Energy management'}, {'name': 'Access to finance'}, {'name': 'Risk management'}, {'name': 'Energy finance options'}

Authors & affiliations

Erika Van der Westhuizen
Affiliation not supplied

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