By Maria Guercio
Chubb Clean Technology Industry Practice Leader


Innovation, connectivity, and globalization fuel the sustainability of cleantech companies – but also introduce new risks in the process. According to a recent study by the Chubb Group of insurance companies and Cleantech Group, executives may be underestimating those new risks.

Cleantech executives face a clear mandate to concentrate limited resources on R&D, business development, and other mission-critical tasks. How do they balance these priorities with a sound risk management strategy? The survey explored that question – and revealed some areas worthy of close attention.

If you’re an executive in the cleantech space, see how your peers view and respond to business priorities and risks. Here are several striking findings, along with recommendations in the attached link to strengthen risk management strategies.

New partnerships, globalization, and R&D are on top executives’ priority lists.

Two-thirds of executives surveyed named establishing partnerships as a short-term priority, and just over half called it a long-term priority. Global expansion is a short-term priority for 44% of executives and a long-term one for 66%.

Strategic partnerships represent vital opportunities to expand capabilities, product commercialization, channels, and revenue. At the same time, they give rise to a range of risks. For example, the potential for theft of intellectual property is a significant risk, which can be notoriously hard to manage as protections and other safeguards vary widely from one country to the next. Yet, according to the survey, only one in five sees IP protection as a short-term risk.

Managing the Risks
As you build effective partnerships in your firm, protect your intellectual property by starting with these steps:

  • Rigorously assess each partner’s track record and financial strength.
  • Ensure patents and other intellectual property protections are in place.
  • Verify that your partners are based in jurisdictions that will uphold contract law.

More than three-quarters of executives say cyber security may impact customers’ purchasing decisions. But one-fifth lack a strategy to protect themselves against a data breach.

Cleantech companies are increasingly utilizing advanced technology to streamline manufacturing operations and enhance products. Nearly half are using sensors and IoT-connected devices, one-third use predictive analytics, and one-quarter use machine learning. Applications vary widely, from smart factories to cameras that enable autonomous cars, to sensors in the soil and air that optimize crop yields.

While these technologies are revolutionizing the industry, they also open up new potential for downtime, physical injury, damage to assets, loss of customer income, and data breaches.

Cyber security should be approached enterprise wide; it is not just an IT issue. Everyone in the organization should be involved in keeping data safe and following protocols.

Half of companies surveyed experienced a supply chain disruption. But only 12% have a plan to prepare for and mitigate supply chain problems.

Cleantech companies are shifting toward more global sourcing to control costs and expand supply options. Although Europe and the U.S. continue to be the preferred sourcing markets, China is quickly emerging as a third option. Over the next three years, survey respondents will be taking a closer look at Southeast Asia, with the percentage of companies sourcing from there expected to more than double to 33%.

Emerging countries may not have the same laws and regulations, infrastructure, and quality standards that are familiar to cleantech executives. One unintended consequence can be supply chain interruptions – which in turn may result in (among other things) delayed deliveries, lost customers, decreased profit margin, and reputational damage. In fact, four out of five companies that reported a supply disruption said the impact on their business was material.

To best manage that risk, cleantech companies need to better understand their entire network, including all suppliers, storage facilities, and transportation routes; and take steps to increase supply chain resiliency.

For more findings and more detailed risk management recommendations on how to mitigate these risks, download a full copy of the report here.

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