Risk management.
Featured image: Stock

Yesterday we published a quick poll on Twitter that addressed the catchphrase "if no one dies, the risk is acceptable".

Originally published in the ESI Africa weekly newsletter on 2019/11/27

Of those that took the live poll, 71% disagreed that this outcome makes it acceptable to take risks. It could be that the current affairs of the power, energy and water sectors are a deterrent; where 'collateral damage' is of great concern.

It was therefore timeous of the Institute of Risk Management South Africa (IRMSA) to host a Western Cape summit exploring the value of taking risks. During the keynote session yesterday, Sid Peimer, the executive director of the Cape Chamber of Commerce and Industry, reminded us that "risk is uncertainty with consequences".

Opening the summit, the Premier of the Western Cape, Alan Winde, noted: "Know your 'why', where you are and why you do what you do." This speaks to the levels of risk that any business, government department, or city must grapple with to remain relevant and deliver on their reason for being.

Since the City of Cape Town experienced a double threat from electricity load shedding and water restrictions during a severe drought, every mitigation implemented hurt the bottom line (finance) for the city.

It raises the question of how to model a sustainable utility and city.

The answer is not in pushing up electricity and water tariffs as this threatens enterprises that rely heavily on these resources. So what are the mitigating scenarios that can benefit all stakeholders?

In terms of electricity, using technology and innovation must become the norm. Imagine an open market where small-scale embedded generation from thousands of micro-IPPs allows cities to sell power to neighbouring towns.

This scenario will use technology and data to know precisely where the micronodules of supply and demand are and connecting these at the most affordable price.

When exploring energy solutions, the IRMSA summits guest speakers spoke fervently about a just transition, challenging all stakeholders to implement risk management solutions that combine people-centric and AI (data-driven) solutions.

"We need to find a way in which our data management systems talk to each other to ensure effective mitigation of risks," Winde said.

Leveraging data holds so much power allowing us to take risks where no one dies.

Until next week.
Nicolette