Mitigating Climate Change is hot on the business agenda. What about Adapting to it? There’s been plenty coverage on the rise and detail of the American Energy and Security Act of 2009 (ACES and also called the US climate and energy bill), passed by the United States House of Representatives on June 26 and now facing the Senate with daunting prospects, with the objective of mitigating climate change and reducing our dependency on oil. But thus far very little coverage on the significance of climate impacts and the change and planning required for businesses, administrations and institutions – ‘climate adaptation’.
But with all the debate about the details of the cap and trade program and the 16 States opposing the bill (the “Gang of 16”) – those dependent on the heavy carbon emitting industries – other key details in the legislation and, importantly, other key components of a low-carbon economy and the climate change context have become somewhat lost in translation. For instance, climate adaptation: understanding the patterns of climate change impacts and risks and planning to ‘adapt’ to these, is lost. Given the ambitious task of reducing CO2 to slow global warming by 2050 and pretty much a global acceptance, coupled with actual evidence, that climate change is now happening, ‘adaptation’ asks how can we plan for an ever-warming planet and the impact on infrastructure, markets and the health of society. And what needs to change? It’s a question of transformation, innovation and making informed decisions to avoid impacts, deal with them and create value from change.
What does climate adaptation have anything to do with me if I am not a scientist you may ask? And why is there less focus on adapting to climate change versus mitigating it?
Adaptation is not really talked about within markets and is only just beginning to be considered and invested in by governments. For instance, the UK government, a leader on climate change policy and market stimulation, has only just this last month commissioned a large National climate risk assessment and adaptation planning initiative. It represents the world’s first countrywide climate adaptation study. Amazing, really, given the projections and that other drivers such as web 3.0, or swine flu, or the fluctuating price of oil, make it into the board room.
I’m not discounting the whole section in the climate and energy bill, ACES, (titled “Adapting to Climate Change”) that covers scope for a national change research, health and protection and natural resource impact program and a national climate change adaptation strategy. Nor the pockets of scientific research on climate impacts that are emerging from research centres such as the Pew Centre for Climate Change and the United States Global Research program.
However, adapting to climate change is an area wholly inadequately understood by markets or society. Many businesses have taken steps to reduce GHG emissions voluntarily and many are planning for the impact of legislation and the pressure to disclose from stakeholders. Fewer businesses are incorporating climate risks and the opportunities associated with the physical effects of climate change in their business planning, according to the Pew Centre’s report.
Climate adaptation is in part planning for the risk impact of a changing ecosystem services – increased storms, rising sea levels, scarcity of water or other natural resources, increased or decreased temperature extremes, disappearing snow etc. – and (should be) in part looking at the opportunity to evolve, innovate and create value in a climate change context. Though there’s been much less focus on planning. As Pew states, “…relatively few business have climate impacts of their “radar screens”.” There’s a rather disconnected view that climate change will affect poorer nations with fewer resources, who will be least prepared and able to deal with it.
There’s some evidence from the industries most immediately affected by climate change such as the Insurance Industry, Tobacco, Beverage, Oil and Gas, Electric, and Food – but the focus at this stage is assessing risk versus feeding future business planning, transformation or innovation.
For many businesses some of the physical changes associated with climate change will present opportunities as well as risk. And while some businesses are being forced to recognize the need for immediate adaptation, few are contemplating proactively adapting to expected future changes, according to Pew. I’ve touched on this before when I described the need for a new type of planning function in business “The Environmental Planner”, which absorbs and understands the evolving state of the planet and climate change scenarios and feeds these insights into business planning, R&D and innovation. I say it again. Climate change, just like technology, should have its very own roadmap. Climate change impacts should be driving investment decisions, infrastructure, process, product and business model innovation, as well as mitigating strategies and communications.
Successful adaptation requires recognizing and acting on impact, threats and climate drivers, at an early stage – often before they occur – and identifying appropriate responses and solutions, according to Pew. As example:
- Strategic sighting of production centres or power plants, when water is limited, will demand new types of cooling systems. Facilities and their location, as well as our current dominant centralized distribution system, will be put to test.
- Planning for new types of materials and resource use/reuse to supply the production process. Water availability or quality of water will be, and is already, affected by climate change. This changing the whole value chain, from product, production to health and safety of employees.
- Transportation/distribution planning, when roads and infrastructure are likely face damage impact from extreme weather, which will also impact customers ability to access goods and employees ability to travel to the workplace.
- Planning for tourism, in a changing climate context, such as the Swiss Alps resort who are investing in non-ski attractions to lure tourists as diminished snowpack becomes real.
- Planning for new diseases or conditions, and societies physical and mental ability to deal with changing climates, such as heat or extreme cold. New services, advice, preventative measures as well as medication will be required.
- Access to food or other natural resources used in production will change. Some resources will deplete in areas and others will thrive. As will our societal needs. Anticipating and diversifying for the future will be key.
- Longer term planning and innovation, or thinking about business and society in the long term, is the ultimate challenge for markets. For now, I am calling for a conversation on the adapting needs of society and markets in a changing planetary context, for awareness about adaptation (as well as the urgency of mitigation), and for the design of resilient business and society: A continuous understanding of context to inform strategy; The ability to identify and quickly respond to changing context; Diverse portfolios and an ongoing commitment to evolution and innovation; Nimble business models and responsive cultures; A climate change roadmap and the Environmental Planning function.
I am also calling for better communication and understanding about climate risks and adaptation. Orange, the cellphone network provider in the UK, for many years focused on the future. “The Future is Bright, The Future is Orange”, used to be their tagline (and maybe still is?). Who is going to start telling the story that the future is going to be different and the future companies are ones who are adaptive and resilient and ahead of change?
More on what’s not talked about in the climate and energy bill in my next article.
- Contributed by Tamara Giltsoff, independent Sustainability Strategist. See tamaragiltsoff.com