Page 119 - Risk Report 2024

7. Energy 8. Logistics

Loadshedding is costing the economy billions, and the private Logistical failures continue to hamper economic development
sector has responded through mass installations of off-grid and growth, with agriculture, mining and manufacturing
solutions. Government continues to lag, and service delivery particularly hard hit. For professional services firms with clients
continues to be affected by power outages. The Energy heavily reliant on a functioning supply chain, the impact is even
Action Plan is in place, requiring concerted effort for rapid higher. Investments in ports and the transport network require
implementation. The Ministry of Electricity seems to have that those SOEs responsible for these activities be fixed. The
had a positive effect on loadshedding, however, its continued sector must deal with ongoing project delays, cost overruns, and
existence is unknown. The sector itself (through use of remote client reputation damage, exacerbated by global trade issues,
work technology) is often better able to adjust than its clients, natural disasters, and technological disruptions. Understanding
which lead to delayed project delivery and cost overruns. clients’ supply chains, conducting scenario planning, and
exploring technology solutions may mitigate the immediate
risk while long-term supply chain mapping, advocating for
infrastructure development, and promoting international trade
efficiency is needed. For construction services (i.e. architects,
quantity surveyors, and engineering professionals) the impact
is higher due to reliance on materials and equipment delivery.

9. Food Security 10. Climate Change
Food shortages will impact the sector through the impact on More frequent extreme weather events, rising temperatures,
its workforce and the rest of society (including sector clients). and environmental degradation must compel Government to
Opportunities exist for large companies to support communities implement climate mitigation and adaptation plans. The Just
with food production while Government must address Transition Plan includes all of society, but needs leadership to
challenges around access to land and productive agricultural ensure its implementation and coordination with clear roles
resources and capabilities. and responsibilities delegated to the public institutions with the
capabilities in weather monitoring, emergency preparedness,
regulatory compliance, infrastructure, etc. There is significant
opportunity for the sector to contribute to solutions for climate
and just transition related risks. The sector should increase
skills in business continuity management (climate change
response and adaptation), sustainability (climate change
mitigation), just transition, and decarbonisation consulting to
support high demand in the coming years.

11. Technology 12. Skills

Cybersecurity risks have become more pronounced, placing The sector struggles to attract and retain skilled professionals
at risk the ability of sector entities to deliver uninterrupted amidst large skills gaps and evolving social needs, impacting
services. Data breaches, reputational damage, operational service delivery. This is exacerbated by the rise of remote work
disruptions, and even job displacement due to automation and and fierce competition for talent in a global pool. The sector
AI are all potential consequences. As more cyber incidents are must also keep pace with evolving client needs amidst a
recorded across various sectors, firms need to adapt by upskilling landscape increasingly shaped by AI, ESG factors, and stricter
their workforce, leveraging AI for innovative security solutions, regulations. Compounding the challenge are SA’s unique
and continuously investing in cybersecurity measures. Robust demographic trends: an aging workforce and high youth
cybersecurity measures to safeguard sensitive information and unemployment. Building local capacity and addressing the
maintain stakeholders’ trust are increasingly costly and not uneven distribution of skills are crucial to overcoming this
always effective. Business continuity and disaster management ‘quadruple threat.’ Recruitment processes, continuous learning
plans require specialised skills and resource allocations. The and training, technology adoption and development efforts
rapid uptake of AI is reducing the dependence on professional need strengthening. Building a high-performance culture and
services but brings with it additional risks created by unethical addressing productivity issues require collaboration between
use of AI, the uptake by criminals of AI increasing the level of public and private sectors, and academia.
cyber risk in all spheres of business in the sector. Embracing
a culture of adaptation and positioning itself as a leader in
technology utilisation will be crucial for navigating this complex
landscape.