1 July 2011 | Luca Del Buono
Carbon, Climate Change, Finance/insurance, Legislation

 

A major focus of business is to reduce emissions. It’s sometimes overlooked that business must also adapt to climate changes happening now and to come. In this green guide, Greg Masters, Climate Change Specialist at Dent Associates Ltd explains the issues and his top five tips for how to adapt.

Businesses are becoming aware of the impacts of climate change, and this probably is through directly or indirectly experiencing extreme weather events, such as flooding or storm damage.  Business is slowly acknowledging responsibilities in terms of mitigating climate change, with incentives for energy saving, reduction of emissions and carbon footprinting. 

But to be viable and sustainable into the future, businesses need to adapt to climate change.  This is particularly important for small and medium sized enterprises who have not got the resources of larger corporations to deal with the implications of climate change.  How can businesses adapt?  Where are the incentives for adaptation like those in place for mitigation?  

We have just experienced the hottest April since records began 352 years ago.  The UK Met Office reported that the average temperature for April across central England was over 4°C above average.  It has also been the warmest Easter since 1949. But what of the weather to come and how will it affect businesses?

Current climate projections from the UK Climate Impacts Programme (UKCIP) indicate that the UK is likely to experience more hot days (over 25°C) in summer, less cloud in summer (sunburn), more extreme events (unpredictable and severe weather – heat waves, gales, storms), frequent intense winter rainfall (flooding) but less summer rainfall (drought).  

The consequences are wide ranging, and include disruption to transport, buildings becoming unsafe, damage to infrastructure, flooding, water contamination, water shortages.  These are events we have witnessed already.  Other, hidden costs include increased pressure on the health service through increased admissions, power failures because sub-stations overheat or become flooded and logistical issues such as a lack of the right equipment in the right place at the right time.  

The UK’s weather seems to be changing and will continue to change. Research has found that human induced greenhouse gas (GHG) emissions substantially increased the likelihood of devastating floods occurring in England and Wales in autumn 2000.  The floods damaged nearly 10,000 properties and led to insured losses estimated at £1.3 billion. Such events are very likely to become more common.  Research by the Lloyd’s Emerging Risks team found rainy days of 25mm have increased by 33% since 1960.  However, the change is most significant for days of extreme rainfall over 40mm, which recorded a 900% increase.    

Are you prepared?

Business is one of the most vulnerable sectors to climate change, and one of the most ignored.  Research from Dent Associates, a business and science consultancy, shows that business fixed assets, supply and distribution chains, operational concerns such as how employees get to work, energy use and efficiency, and of course insurance concerns will all be affected by climate change.  But what can businesses do about this?

Often the focus is on business activities affecting climate, through GHG emissions and energy use.  Businesses are encouraged to calculate carbon footprints to understand how their operations affect climate change.  From such understanding, mitigations can be applied to reduce the impact of the business on the environment and its contribution to climate change.  Adaption is as important as mitigation.  Businesses need to fully understand and evaluate the risks and to develop climate safe business plans.  

Is the business ready to cope with current and future extreme storms, frequent flooding, heat waves for example?  We already know that storms, floods and heat waves affect businesses, from manufacturing and service provision through to agriculture; what is that disruption going to be like in the future and what can you change to reduce the impact on your business?  

We actually know more about how our climate is changing than we know about interest rate movements, currency fluctuations, economic growth, changes in markets and geo-politics and yet climate change is rarely considered as important even though its impacts can have as great or greater impact on business operations as financial factors.  The CBI in 2009 predicted that in 25 years time flood damage will cost the UK economy £10 bn per year and that climate change could eventually cost the UK in excess of £75 bn per year.  Businesses need to adapt.

Business cannot be made completely climate proof, but, as with any other risk factor, industry must start taking it into account.  By making the investment now to adapt to a changing climate, businesses can avoid greater costs in the future.  A 2008 CBI survey indicated that only 35% of UK businesses are taking action to manage the business impacts associated with a changing climate.  

Top 5 tips for preparing your business to adapt to climate change

1. Ensure you fully understand and evaluate the climate change impacts on the whole business operation
2. Build the risks identified for climate change into business management, particularly strategic planning
3. Consider your employees – working conditions, health issues, availability for work, ability to get to work
4. Don’t forget the supply and distribution chain – where do the raw materials come from, how will provision be affected, how will distribution to market be affected
5. Simple common sense efficiencies go a long way to building sustainable practices.

Greg Masters, Climate Change Specialist at Dent Associates Ltd
 

blog comments powered by Disqus