It’s a comment that was made to us recently in a meeting with a prospective client. It’s also occasionally inferred in some commentary from other clients. So first, let’s set the record straight……. We like windmills!
But. It’s a tough business to be in right now (see recent profit warnings from Siemens Gamesa and negative commentary from GE). Vestas are the clear sector leader, and have better managed unit pricing and cost pressure, but even they struggle to consistently execute (especially offshore). Project risk is significant, delays can be costly and unit economics often dependant on variables outwith company control. As we have said previously, just being exposed to a theme is not enough. In renewables, long-term competitive advantage requires cost and technology leadership plus price discipline.
We won’t invest in anything just to appear virtuous! And we believe there are other ways of having a positive impact. The positive sustainable impact of technology might not be so obvious as a wind turbine, but we strongly believe it is no less important. Don’t get us wrong, technology alone can’t sort all our environmental ills, but we are more wizard than prophet. So called Fourth Wave Technologies, including artificial intelligence, automation, blockchain, data analytics and sensors are allowing businesses to lower resource consumption, decrease pollution, carbon emissions and waste AND boost their bottom line. Boom! They are functionally better and virtuous!
‘Nearly every CEO and VP we surveyed agrees that emerging technologies have at least some potential to improve their organization’s environmental impact, and 92% of all leaders agree that these technologies can help businesses improve their bottom line as well as their sustainability.’
Source – Business and the 4th wave of environmentalism, Findings from Environmental Defense Fund’s 2019 Fourth Wave Adoption Benchmark Survey.
Source – Making things better: Advanced Analytics and Manufacturing, Oct 2019, Bloomberg New Energy Finance
And whilst the rate of adoption varies, companies across every industry are employing technology to drive efficiencies. Business leaders ignore at their peril. With benefits to retailers (data analytics to predict online purchasing trends), suppliers (blockchain to better track products and transactions for improved efficiency) and manufacturers (artificial intelligence for safer, more precise output), uptake of Fourth Wave technologies is surging. Previous industrial revolutions have radically improved our standard of living but they have also borrowed from the future. Today’s technological revolution might just help break this pattern.