In this insights series from our founder and CEO Lori Teranishi, we explore seven critical trends that demand immediate attention from CEOs and their leadership teams. These trends, which we’ve observed in our work with clients across sectors and geographies, collectively signal an era of continuous disruption, emphasizing the urgent need for businesses to build resilience, agility and foresight to navigate the challenges ahead.
Critical Trend 2: Climate Change and Sustainability Pressures
The devastating wildfires in and around Los Angeles are the most recent natural disaster to exemplify the imminent and dire threat of climate change. Heat is threatening lives and population growth around the world. Hurricanes are more powerful and frequent. Torrential rains cause floods in familiar and unexpected areas.
Climate change concerns are growing among Americans, influencing their support or opposition to organizations associated with global warming. With world energy demand projected to increase by 50% over the next 25 years, driven by population growth, urbanization and industrialization, air conditioning and data centers are emerging as significant contributors. Renewable energy sources are unlikely to meet these growing needs, leading to continued reliance on fossil fuels and worsening global warming.
Data centers, which require substantial power and generate heat, are expected to consume over 10% of America's energy within a few years. The rapid adoption of AI, bolstered by President Trump's $500 billion AI infrastructure project, will necessitate hundreds more data centers. While some providers explore nuclear power, most will rely on fossil fuel-generated electricity. Utilities are already struggling to meet proposed data centers' power needs, potentially passing costs to consumers.
The environmental impact of this increased energy consumption is likely to draw public ire, particularly toward businesses associated with data center usage, such as social media companies, cable and satellite providers, large corporations, government agencies, and the entertainment and online gaming industries.
Organizational Response:
- Invest in climate-resilient infrastructure
- Develop energy-efficient solutions, especially for data centers
- Integrate sustainability into core business strategies
- Invest in lower carbon fuels while transitioning to renewables, explore renewable energy sources and carbon offset programs
- Prepare for potential climate-related regulations and stakeholder pressures
