Four years ago, Utility Week, in association with Marsh McLennan, set out to create a clear, consistent picture of the risks facing UK energy and water companies. Since then, the UK Utilities Risk Report has become an annual check-in on the pressures shaping boardroom agendas, investment decisions and day-to-day operations across the sector.
Looking back across the reports since 2022, two things stand out. First, many of the risks identified early on have not gone away. Second, the context around them has become more volatile, more politicised and more interconnected. As the survey for the fifth report is now live, this feels like an important moment to reflect on what the past four years have told us. There is also still time for you to have your say by following this link.
Cyber consistently tops the list
Cybersecurity has been the number one risk in all but one of the last four reports. Even in 2023, when extreme and unpredictable weather briefly overtook it, cyber remained a close second. Utilities have become more digital, more connected and more data-driven over this period, with networks more heavily reliant on smart assets and sensors. Retailers process vast amounts of customer data, and water companies are increasingly adopting digital tools to manage ageing infrastructure and environmental pressures. Each step forward brings efficiency, but also exposure.
What has changed is how tangible the threat now feels. High-profile cyber incidents in the last 12 months, including the widely reported attack on Marks & Spencer, have underlined the scale of disruption a serious breach can cause, even outside critical national infrastructure. Lost sales, broken supply chains and damaged trust are no longer abstract scenarios. For utilities, the stakes are arguably higher still, with public safety and essential services on the line.
Skills shortages move from background concern to front-line risk
Another clear trend across the four reports is the steady rise of skills and workforce risks. In 2022, skills shortages were already a concern. By 2024 and 2025, the risk of skilled workers and leaders being driven away from the sector had firmly embedded itself in the top 10.
This is not just about numbers. The transition to net zero, the need to strengthen resilience to extreme weather, and the push for digital transformation all demand new and often scarce skillsets. Engineers, digital specialists and cyber experts are in short supply, and utilities are competing with sectors that often look more attractive to younger workers. Negative public perceptions of parts of the sector, particularly water, have added another layer of difficulty. The reports consistently highlight fears that reputational challenges could undermine recruitment and retention just as capital programmes ramp up.
Policy uncertainty casts a long shadow
If cyber is the most consistent risk, policy and regulatory uncertainty is the most pervasive. Across all four reports, slow-moving or unclear policy has been identified as a major threat to investment and long-term planning. This uncertainty cuts across both energy and water.
In energy, there is a clear commitment from the Labour government to decarbonise the power system by the end of the decade but the wider political consensus on net zero has fractured. What would a Reform government mean for the energy transition and the companies delivering it? Meanwhile there is ongoing uncertainty around the pace of electrification and the future role of hydrogen.
In water, the spotlight has been just as intense, with the sector facing sustained political and public pressure, alongside major regulatory interventions. The government’s response to the Cunliffe Review has been closely watched, and while it may bring clarity in some areas, it also reinforces how fluid the regulatory landscape remains. Looking ahead, further upheaval may be on the way, with the Department for Energy Security and Net Zero’s forthcoming review of Ofgem potentially reshaping energy regulation significantly. That kind of change carries obvious risk, but the reports also hint at something else: opportunity. A more agile, better-aligned regulatory framework could unlock investment and innovation if it gets the balance right.
Time to have your say
The fifth year of the UK Utilities Risk Report comes at a moment when many big questions are still unresolved. Cyber threats remain high, skills shortages are starting to bite, policy and regulation are in flux across both energy and water, with major decisions pending on a range of issues.
At the same time, the UK’s utilities are being asked to deliver more than ever: higher levels of investment, greater resilience, faster decarbonisation and better outcomes for customers. Understanding which risks feel most pressing right now, and how confident organisations are in managing them, is essential.
This is why the UK Utilities Risk Report matters. Your responses shape the picture of the sector’s risk landscape and help identify where action, clarity or support is most urgently needed.
As the survey for year five gets underway, now is the time to have your say. Click here to participate. Voting closes on Wednesday 28 January.