How Leaders Can Get Strategic About Energy CostsSKIP TO CONTENTHarvard Business Review LogoHarvard Business Review LogoOperations and supply chain management|How Leaders Can Get Strategic About Energy CostsSubscribeSign InLatestMagazineTopicsPodcastsStoreReading ListsData & VisualsCase SelectionsHBR ExecutiveSearch hbr.orgSubscribeLatestPodcastsThe MagazineStoreWebinarsNewslettersAll TopicsReading ListsData & VisualsCase SelectionsHBR ExecutiveMy LibraryAccount SettingsSign InExplore HBRLatestThe MagazinePodcastsStoreWebinarsNewslettersPopular TopicsManaging YourselfLeadershipStrategyManaging TeamsGenderInnovationWork-life BalanceAll TopicsFor SubscribersReading ListsData & VisualsCase SelectionsHBR ExecutiveSubscribeMy AccountMy LibraryTopic FeedsOrdersAccount SettingsEmail PreferencesSign InHarvard Business Review LogoOperations and supply chain managementHow Leaders Can Get Strategic About Energy Costs by Penelope Crossley, Danielle Kent, Glenn Platt and Lee WhiteMarch 27, 2026Abstract Aerial Art/Getty ImagesPostPostShareSavePrintSummary.   Leer en españolLer em portuguêsPostPostShareSavePrintMost businesses, especially small to medium-sized ones, still treat energy like rent: essential, predictable, and largely outside managerial control. That era is ending as energy prices and supply volatility shift from being marginal operating-cost questions to board-level resilience, strategy, and competitiveness issues.Penelope Crossley is a Professor of Law and ARC Senior Research Fellow at Sydney Law School in Sydney, Australia, specialising in the legal frameworks governing the energy transition and serving as an Expert Legal Consultant to the United Nations.Danielle Kent is a Horizon Fellow at the University of Sydney Business School in Sydney Australia.   Her research examines behavioural decision-making under uncertainty and its impact on financial strategy and organisational performance.Glenn Platt is the Executive Director of Strategy and Innovation at Emergent Group, an entrepreneur in renewable energy and clean technologies, and former CSIRO Research Director for energy systems.Lee White is a Horizon Fellow at the University of Sydney in Sydney, Australia.  Her research focuses on energy transition regulation, governance, and the equity and consumer impacts of climate and energy policy.PostPostShareSavePrintRead more on Operations and supply chain management or related topics Costing, Risk management, Managing uncertainty and Budgets and budgetingPartner CenterStart my subscription!Explore HBRThe LatestAll TopicsMagazine ArchiveReading ListsCase SelectionsHBR ExecutivePodcastsWebinarsData & VisualsMy LibraryNewslettersHBR PressHBR StoreArticle ReprintsBooksCasesCollectionsMagazine IssuesHBR Guide SeriesHBR 20-Minute ManagersHBR Emotional Intelligence SeriesHBR Must ReadsToolsAbout HBRContact UsAdvertise with UsInformation for Booksellers/RetailersMastheadGlobal EditionsMedia InquiriesGuidelines for AuthorsHBR Analytic ServicesCopyright PermissionsAccessibilityDigital AccessibilityManage My AccountMy LibraryTopic FeedsOrdersAccount SettingsEmail PreferencesHelp CenterContact Customer ServiceExplore HBRThe LatestAll TopicsMagazine ArchiveReading ListsCase SelectionsHBR ExecutivePodcastsWebinarsData & VisualsMy LibraryNewslettersHBR PressHBR StoreArticle ReprintsBooksCasesCollectionsMagazine IssuesHBR Guide SeriesHBR 20-Minute ManagersHBR Emotional Intelligence SeriesHBR Must ReadsToolsAbout HBRContact UsAdvertise with UsInformation for Booksellers/RetailersMastheadGlobal EditionsMedia InquiriesGuidelines for AuthorsHBR Analytic ServicesCopyright PermissionsAccessibilityDigital AccessibilityManage My AccountMy LibraryTopic FeedsOrdersAccount SettingsEmail PreferencesHelp CenterContact Customer ServiceFollow HBRFacebookX Corp.LinkedInInstagramYour NewsreaderHarvard Business Review LogoAbout UsCareersPrivacy PolicyCookie PolicyCopyright InformationTrademark PolicyTerms of UseHarvard Business Publishing:Higher EducationCorporate LearningHarvard Business ReviewHarvard Business SchoolCopyright ©2026 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

The pervasive approach of treating energy costs as a fixed, predictable operational expense is rapidly becoming obsolete within the business landscape, particularly for smaller to medium-sized enterprises. As evidenced by Penelope Crossley, Danielle Kent, Glenn Platt, and Lee White, the recent surge in energy price volatility and supply instability has elevated energy considerations from mere budgetary concerns to critical elements of strategic planning, board-level risk management, and overall competitive advantage. The authors argue that current practices, which typically view energy expenditures as akin to “rent,” are no longer tenable given the evolving dynamics of the energy market.

Crossley’s expertise in legal frameworks governing the energy transition highlights the increasing significance of energy policy and regulation in shaping business operations and decision-making. Kent’s research on behavioral decision-making under uncertainty offers a crucial lens through which to understand how organizations can better navigate volatile energy markets. Her focus on the impact of behavioral patterns on financial strategy underscores the need for proactive, rather than reactive, approaches to energy management. Platt’s experience as an Executive Director of Strategy and Innovation at Emergent Group, coupled with his background in renewable energy, provides a practical perspective on transitioning toward sustainable energy solutions. White’s contributions, centered on energy transition regulation and policy, emphasize the importance of understanding the broader systemic forces at play.

The authors emphasize a shift in leadership mindset, urging executives to embrace a strategic view of energy costs that recognizes their potential to dramatically impact a company's bottom line and resilience. This necessitates moving beyond traditional cost accounting methods and incorporating energy considerations into core strategic planning processes. The increasing volatility and geopolitical sensitivity surrounding energy supplies demand a more sophisticated approach to risk management, recognizing that energy price fluctuations can quickly translate into significant financial burdens and operational disruptions.

Specifically, leaders are challenged to move beyond simply minimizing energy expenses and instead to actively shape their energy consumption patterns. This involves incorporating scenarios that account for potential disruptions, utilizing forecasting tools to anticipate price shifts, and developing contingency plans for securing alternative energy sources. Furthermore, the authors suggest exploring opportunities for innovation in energy efficiency and the adoption of renewable energy technologies.

The central argument of the piece is that a strategic approach to energy costs is no longer a “nice-to-have,” but rather an essential component of any business’s long-term viability and competitive positioning. The changing nature of the energy market, fueled by increasing regulatory pressure, technological advancements, and growing concerns about climate change, demands that organizations adopt a proactive and forward-thinking stance on energy management. This necessitates a fundamental rethinking of how energy is viewed and managed within the organization, transforming it from a passive cost to an active strategic asset.