How can business respond to climate change?

August 2, 2018

The year 2018 is on track to be the fourth warmest on record, beaten only by 2016, 2015 and 2017. In other words, we have had the warmest four-year run since we started measuring. According to data from the US National Oceanic and Atmospheric Administration (NOAA), June 2018 is the 402nd consecutive month with temperatures above the 20th-century average.[1]  A study by the Economics of Climate Adaptation (ECA) working group found that losses due to climate change could reach up to 19% of GDP in some parts of the world by 2030.[2]

 

Mitigating and adapting to climate change is a complex problem, which may call for a fundamental review of business activities and processes. This makes it a daunting task. Yet, acceptance that ‘business as usual’ is no longer able to deal with the problem allows the possibility to reframe how the problem is seen. This has the potential to open up new and innovative ideas and new forms of engagement and collaboration between organisations – switching from slow incremental mitigation and adaptation to a system-wide transformative change.

 

ADAPTATION:

Humans, it is said, have always adapted to climatic and environmental change, albeit with variable degrees of success. Climate change (drought in particular) has been at least partly responsible for the rise and fall of civilizations. Earth’s climate has been relatively stable for the past 12,000 years and this stability has been crucial for the development of our modern civilization and life as we know it. What is novel today, is the unprecedented rate and magnitude of climatic change. Today’s potential for significant detrimental consequences has made switching from being unconscious and reactive, to premeditated and proactive.

 

To be adapted to a climate is to be adapted to both the average climatic conditions, and to the weather associated with that climate including extreme events. It is necessary to make a judgement about how much adaptation is required; whether it is better to manage every eventuality, or accept some level of damage. This judgement, if done well, requires knowledge of both the actual and likely risks, the vulnerability of any particular business and its macro context, and of the acceptability of different outcomes.

 
MITIGATION:

Climate Change Mitigation involves reducing the flow of heat-trapping greenhouse gases into the atmosphere, either by reducing sources of these gases (the burning of fossil fuels for electricity, heat or transport) or enhancing the “sinks” that accumulate and store these gases (such as the oceans, forests and soil). The goal of mitigation is to reduce  human interference with the climate system, and “stabilise greenhouse gas levels in a timeframe sufficient to allow ecosystems to adapt naturally to climate change, ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner”. [1]

 

Mitigation can mean using new technologies and renewable energies, making older equipment more energy efficient, or changing management practices or consumer behaviour. It can be as complex as a plan for a new city, or as a simple as improvements to a cook stove design.

 

In the ‘business world’ mitigation can also mean a number of things, and the type of climate-targets an individual company chooses depends on its products and production methods, policy environment, and business model. Some targets focus on reducing all greenhouse gases on productions sites, and others on energy use. Goals and targets can also apply to supply chain purchases or use of company products. Some companies purchase carbon offsets from projects such as reduced deforestation to help achieve their emission goals more cost-effectively.

 

Companies have found that addressing climate also makes good business sense. Greenhouse gas targets have helped them save money, generally through improvements in energy and operational efficiency. They have also seen reduced production costs and enhanced product sales, making them more competitive. Finding alternatives, have also often meant finding innovative product and process designs and systems – making some companies leaders in their field.

 

 

Making the business case:

A good way for you to help your organisation decide whether or not to go ahead with a climate response plan, is to consider your organisations’ drivers and constraints. We suggest that you get together with a few colleagues and brainstorm in the following:

 

Here is a list that might help you get started which takes both mitigation and adaptation into consideration:

 

In addition, here is a series of typical questions you could ask your organisation in a workshop:

 

  1. How have previous weather events affected my organisation (think processes, procurement, logistics, HR etc.) ?

  2. How well did my organisation cope with past weather events?

  3. What are the key climate impacts for my sector or location?

  4. How is my organisation contributing to Climate Change? In what ways?

  5. How is my organisation going to be affected by worldwide mitigation solutions – such as new legislation, new mode of transportations, de-investment from oil & carbon industries etc.?

  6. What are the problems that needs to be addressed? What do I want to achieve?

  7. What is the chosen scope and scale of the assessment, and why? Is a broad, strategic view going to be most appropriate, or would a more detailed assessment of one aspect of your organisation’s activity, which could then be replicated for other business functions, be more useful?

  8. What are the criteria against which you will judge a successful outcome?

  9. What difficulties might you face and how could they be overcome?

 

Dynamia services and involvement:

 

Dynamia offers a range of services to organisations that want to put in place responses to climate change. These services can range from the long-term strategic support to targeted short term interventions. Please don’t hesitate to contact us for a diagnosis of your needs, drivers and constraints.

 

Our proposed mitigation and adaptation measures will rest on our four areas of expertise 1) Place-making, 2) efficient practices, 3) change management; 4) strategic alignment (please visit website for more information)

 

 

 

 

[1] http://www.ipcc.ch/pdf/assessment-report/ar5/wg3/ipcc_wg3_ar5_summary-for-policymakers.pdf

 

[1] https://www.ncdc.noaa.gov/sotc/global/201806

[2] http://www.swissre.com/eca/the_bigger_picture_adaptation_is_key.html

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