Can the US power grid keep up with AI? | C-Suite Insights 6.20.24
Welcome back to C-Suite Insights from The Conference Board ! In case you missed it yesterday, check out our special Juneteenth edition featuring insights on diversity, equity, and closing racial disparities.
How Leaders Can Take a Fair Approach When Addressing Environmental Issues
Only 3% of Russell 3000 companies mention “environmental justice” (EJ) in their public sustainability reports. But EJ is becoming increasingly important for corporate America, especially with the shift to renewable energy, which raises questions about social and economic fairness.
What it means: The principle focuses on addressing environmental issues fairly, regardless of social or economic background.
The TCB take: Companies can address EJ through initiatives in the workplace (facilities, operations, investments), the marketplace (products, services, supply chains), and the public space (government relations and corporate citizenship). Steps include:
Number of the Week: 10%
Some HR leaders plan to move fully on-site workers higher and faster up the corporate ladder. Indeed, 10% of Chief Human Resource Officers expect that promotion eligibility will be increased for fully-in-office workers over fully-remote workers.
The TCB take: “Today’s talent pool places a premium on workplace flexibility—and historic labor shortages reinforce the need for such arrangements," said Diana Scott , Leader of The Conference Board US Human Capital Center.
"Treating hybrid and remote employees equitably when evaluating performance, offering growth opportunities, and making compensation decisions will not only help to engage your workforce, but retain them,”
Consumers Are Planning for a Social, Healthy, and More Frugal Summer
US consumers are planning a summer of more socializing with family and friends, but an equal priority is looking after their health and wellness, according to the 2,229 respondents to our May Consumer Confidence Survey? .
Feeling the pinch: Summer plans are also being shaped by affordability concerns, exacerbated by ongoing inflation and people’s weakened assessment of their financial situation. Compared to previous years, consumers plan to cut spending on plane travel and live events.
Meeting consumers where they are: Companies should consider how their products and services can help consumers spend quality time with family and friends, support their self-care, and enjoy affordable leisure activities. This can include affordable “small luxuries” such as ice cream, clothing, or coffee on the go.
The TCB take: Burdened by persistent inflation, high interest rates, and rising debt levels, consumers have become more cautious, seeking value.
Companies that address these concerns directly, including through promotions and discounts, can build positive brand perceptions—some welcome positive PR after recent negative press about price increases and shrinkflation.
Will AI Spike Electricity Demand or Reduce It through Efficiency?
Amid the rapid expansion of data centers—and booming demand for computing power in artificial intelligence (AI), cloud storage, and crypto assets—analysts are predicting a significant rise in electricity demand, potentially overloading the US grid.
Surging forecasts: Current-generation AI models like ChatGPT use over 500,000 kWh per day to operate—compared to 29 kWh for the average US household.
Planned data center expansions have already resulted in substantially upgraded forecasts for overall power usage. Nationwide, electricity demand is now expected to grow 4.7% over the next five years—nearly double the previous forecast for 2.6% growth.
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Not so fast: Previous predictions of dramatic increases in energy demand did not materialize as expected. Over the past two decades, electricity usage has remained relatively stagnant in the US, with new efficiencies like LED lighting and modern appliances mitigating expected spikes associated with the internet and smartphone booms.
The TCB take: AI will seriously tax utilities and the grid in the decade ahead. But it can also unlock significant efficiencies if Al’s computational power is used to manage electricity usage—for instance, by shifting the most taxing tasks to off-peak hours.
Mexico’s New President Is Expected to Boost US Relations
In a sweeping victory for Mexico’s incumbent left-wing Morena party, Claudia Sheinbaum Pardo was elected as Mexico’s first female president earlier this month.
Changes in policy? An acclaimed scientist and champion of renewable energy, Sheinbaum is expected to adopt a more pro-market approach and clean energy focus to Mexican energy policy than her predecessor to help make Mexico a more attractive destination for foreign investment. She is also expected to seek to improve US-Mexico relations.
US-Mexico trade: Mexico was the US’ top trading partner in 2023, the first year in two decades in which the US purchased more goods from Mexico than China. In 2026, the US-Mexico-Canada Agreement (USMCA) will undergo a review process in which any of the three countries can opt out of renewal.
The TCB take: President-Elect Sheinbaum will be tasked with helping to determine the future of the US-Mexico bilateral relationship, in particular as the USMCA undergoes a review process in 2026. Throughout her campaign, Sheinbaum pledged to strengthen trade relations with the US, calling them “fundamental” as she encouraged companies to continue shifting supply chains to Mexico.
QUOTABLE: Productivity and Purpose
“Productivity isn't about the merciless exploitation of resources: it's about making outcomes that benefit your customers, your investors, your employees, but also the communities and the places in which you operate. I think more and more companies are saying: what does it mean to be productive in a way that is sustainable and inclusive?”
— Marion Devine , Principal Researcher, The Conference Board Human Capital Center, Europe . She joined C-Suite Perspectives to discuss six levers CHROs can activate to spur productivity.
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