Blackout in Europe: The impact on companies affected by the energy crisis

Europe: The impact on companies affected by the energy crisis

On the afternoon of this Monday (04/28/2025), a major blackout struck the Iberian Peninsula, affecting Spain, Portugal, part of France, and other countries. The energy crisis that began around noon caused significant disruptions in railway systems, airports, hospitals, markets, and telecommunication networks, even impacting traffic with non-functioning traffic lights. While authorities investigate the causes of the incident, companies and governments face operational and financial challenges. But what does this event teach us about risk management, accounting, and corporate finance?

Immediate Financial Impacts from the blackout in Europe

Loss of Productivity and Revenue.

• Shops and markets closed, except for small establishments that operate with cash.

• Airports and public transportation were paralyzed, causing cancellations and delays, impacting tourism and foreign trade.

• Companies without access to digital systems had their accounting and financial operations interrupted

 High Operational Costs

•  Hospitals and essential services activated generators, increasing costs with fuel and maintenance.

• Airlines and logistics companies face fines for delays and passenger relocation.

Lessons for Corporate Financial Management

Business Continuity Plan

Companies that rely on energy and digital systems should have:

• Emergency generators and alternative energy sources.

• Data backups in the cloud or external servers.

• Action protocols to minimize losses during crises..

Cash Control and Liquidity

The blackout showed that businesses operating with physical cash (small markets) managed to sustain sales, while 100% digital businesses came to a halt. Having cash reserves for emergencies can be crucial in situations like this..

Insurance and Risk Protection

• Business interruption insurance can compensate for losses in cases of prolonged blackouts.

• Operational risk assessment should include energy and infrastructure failures

Reflection: How Can Accounting Help?

• Extraordinary Loss Recording: How to account for unproductive hours and emergency expenses.

• Risk Auditing: Identifying vulnerabilities in infrastructure and processes.

• Post-Crisis Financial Reports: Adjustments in statements due to revenue declines and additional costs.

Conclusion

The blackout in Europe reinforces the importance of financial planning and risk management. Companies that invest in energy backups, diversification of payment methods, and adequate insurance can mitigate negative impacts. For accounting professionals, this case serves as a warning: anticipate crises, document losses, and guide clients on financial protection. And you? Is your company prepared for a blackout or similar crisis?