Weathering the Next Storm: A Closer Look at Business Resilience
Extreme weather and other climate-related impacts are becoming more frequent, and are imposing real costs on communities and companies. Companies have always navigated a changing business environment. But now they face a changing physical environment, as climate change affects their facilities and operations, supply and distribution chains, electricity and water, and employees and customers.
A new 2015 C2ES Report, Weathering the Next Storm: A Closer Look at Business Resilience, examines how companies are preparing for climate risks and what is keeping them from doing more. It also suggests strategies for companies and cities to collaborate to strengthen climate resilience.
The new report synthesizes public disclosures by S&P Global 100 companies, in-depth interviews and case studies, and workshops. It updates the groundbreaking 2013 report, Weathering the Storm, Building Business Resilience to Climate Change, which provided a baseline for how companies were assessing their climate vulnerabilities.
|Click above to see our Weathering the Next Storm infographic, with key takeaways|
- Most major companies recognize and report climate risks. Ninety-one percent of companies in the S&P Global 100 Index see extreme weather and climate change impacts as current or future risks to their business.
- Companies worry about climate impacts beyond their facilities. Almost all companies interviewed expressed concern about impacts to their supply chains and public infrastructure.
- There isn’t one right way to assess and manage climate risks. Many companies view climate change as a “threat multiplier” that exacerbates existing risks. This puts climate change into a familiar context, but could cause companies to overlook or underestimate the threats they face.
- Companies struggle to translate long-term, global climate data into short-term, local risks. Despite growing access to climate-related data and tools, companies say they need “actionable science” that helps them understand locally-specific risks or risk scenarios.
- Companies can start with a limited-scope vulnerability assessment – focusing, for example, on the most critical parts of the business – to raise internal awareness of climate risks.
- Companies should facilitate regular communication across departments involved in climate risk and resilience -- including sustainability, risk management, operations, and finance – and consider whether to change planning horizons to better incorporate climate risks.
- Companies, state and city governments, non-profits and local experts should explore partnerships to analyze data, evaluate climate risks, undertake cost-benefit studies, and implement resilience planning.
- Governments should look for ways to streamline climate risk reporting and provide more guidance on how to incorporate climate risks into financial disclosures.
- Governments should improve public infrastructure and provide opportunities for the private sector to contribute to resilience planning efforts and investments.
- Fact Sheet: Key Insights on Business State and City Collaboration for Climate Resilience
- Executive Summary of our 2015 report.
- Press release on the 2015 report.
- Blog: Are Businesses Prepared for Climate Impacts?
- Our 2013 report and infographic: Weathering the Storm, Building Business Resilience to Climate Change
- Video on our YouTube page from our 2013 presentations on Weathering the Storm: Building Business Resilience to Climate Change
- Business Resilience Workshop, March 24, 2015, Washington D.C.
- Climate Impacts and Resilience Workshop, July 26, 2014, Washington, D.C.
- The Executive Forum on Business and Climate, November 3-4, 2013.
- Business Resilience Webinar Series, September-December 2013.
- USA TODAY op-ed by National Grid US President Tom King and American Water CEO Jeff Sterba.
- Our Sept. 23, 2013, event at Climate Week NYC: agenda, photos, video interviews with speakers Preston Chiaro of Rio Tinto; Ken Daly of National Grid, New York; Alan Kreczko of The Hartford; and Lisa Shpritz of Bank of America.
- Our 2008 study, “Adapting to Climate Change: A Business Approach," which outlined an initial screening framework for assessing risks.
Video of our report launch
Building Resilience to Climate Change -- Why it's Crucial
Panel: Taking Business Resilience to the Next Level
Hear from Leaders in Climate and Energy Innovation
Leaders from business, government, academia and nonprofits will share best practices to address climate change through policy and business solutions at the 2015 Climate Leadership Conference Feb. 23-25, 2015, in Washington, DC.
The Climate Leadership Conference is hosted by The Climate Registry, the Association of Climate Change Officers, and the Center for Climate and Energy Solutions (C2ES). The Environmental Protection Agency is the headline sponsor.
C2ES is hosting two workshops at the conference.
Conference registration is required to attend the workshops. Register Here
Emerging Best Practices for Identifying Climate Risk and Increasing Resilience
Monday, February 23, 8:30 a.m. – 10:15 a.m.
This workshop will be a knowledge exchange seminar built around discussions on climate-related risks and opportunities for private sector businesses. Discussions will explore strategies companies are using to prioritize and plan; data and tools they use to understand their vulnerabilities and opportunities; key barriers that impede resilience planning; and the partnerships that allow companies to interact with public sector decision-makers that are also building resilience.
Conference Registration Required. Register Here
Chris Benjamin, Director, Corporate Sustainability, PG&E
Robert Kopp, Associate Professor, Rutgers University
Emilie Mazzacurati, Founder and CEO, Four Twenty Seven, Inc.
Janet Peace,Vice President, Markets and Business Strategy, C2ES
Joe Casola, Program Director, Science and Impacts, C2ES
Climate Solutions: The Role of Innovative Partnerships
Monday, February 23, 10:45 a.m. – 12:30 p.m.
This workshop examines ways organizations are working collaboratively on leading-edge climate initiatives, such as greenhouse gas reduction goals and adaptation strategies that go above and beyond the business-as-usual approaches. We know that cross-sector collaboration makes more of an impact than what might be achieved alone. The session will showcase transformational partnerships that produce robust results, innovative solutions and scalability. Participants will be invited to share their own perspectives and explore where new partnerships may be needed.
Conference Registration Required. Register Here
Keith Canfield, Director, Corporate Sustainability Programs, Clinton Climate Initiative
David Tulauskas, Director, Sustainability, General Motors Company
Katie Mandes, Vice President, Community Engagement, C2ES
Anyone who needs to plan for future risks -- whether a city manager, a state official, or a business leader -- needs good information that’s easy to find and easy to use. The federal government took an important step to help managers plan for the impacts of climate change with the release this month of the Climate Resilience Toolkit.
This new online portal offers a wide range of resources and interactives that consolidate some of the “greatest hits” from federal climate data sets, guidance for resilience planning, and examples of resilience projects.
The toolkit is likely to be especially helpful for communities and businesses in the early stages of resilience planning, or for individuals who want to know more about managing climate risks. I took a spin through the toolkit’s resources and here’s my take on some of its components.
The toolkit promotes a five-step process for building resilience: Identify the Problem, Determine Vulnerabilities, Investigate Options, Evaluate Risks and Costs, and Take Action.
The Climate Resilience Toolkit’s five-step process for building resilience.
Most people at some point develop a “Plan B” – in case their first choice of college doesn’t accept them, or it rains on the day of their planned outdoor party, or the deal for the house they wanted falls apart. The same principle applies for more dire situations, such as a city having plans in hand for an orderly evacuation in case of a large-scale disaster. We hope such an event will never happen, but the mayor had better be prepared in case it does.
In a commentary today in the scientific journal Nature Climate Change, three colleagues and I discuss the need for a “Plan B” for climate change: How will we cope with increasingly severe climate impacts if we are unsuccessful in limiting global warming to a chosen target?
In the 2009 Copenhagen climate accord, countries set a goal of limiting global warming to below 2 °C (3.6 °F) above the average global temperature of pre-industrial times. However, given that the planet has already warmed by 0.8 °C, additional warming is already locked into the system, and global greenhouse gas emissions continue to rise, this “Plan A” has become increasingly difficult and may become impossible to achieve if widespread emissions reductions do not begin within this decade. A maximum warming target is a necessary goal of climate policy, but what if our efforts fall short?
Some voices in the environmental community will feel that asking this question is ceding failure, but I disagree. Instead, it means admitting that we can’t perfectly foresee the future and that we need to be prepared for surprises. This is called risk management and everyone from parents, to mayors, to companies, to the U.S. military uses risk management every day to cope with uncertainty.
February 25, 2014
Climate Leadership Award Winners Announced
SAN DIEGO – Fifteen organizations and two individuals are being honored today with Climate Leadership Awards for their accomplishments in driving climate action and reducing greenhouse gas emissions.
The awards are given by the Environmental Protection Agency’s Center for Corporate Climate Leadership, in collaboration with the Center for Climate and Energy Solutions (C2ES), the Association of Climate Change Officers and The Climate Registry. Awardees will be honored this evening at the Climate Leadership Conference in San Diego.
Awardees came from a wide array of sectors, including finance, manufacturing, retail, technology, higher education and local government. Recipients have demonstrated leadership in managing and reducing emissions in internal operations and the supply chain, as well as integrating climate resilience into their operating strategies.
Information highlighting the award winners is here:
Following is EPA's press release:
EPA Honors Corporate Leadership in Reducing Greenhouse Gas Emissions
Release Date: 02/25/2014
Contact Information: Carissa Cyran, email@example.com, 202-564-4363, 202-564-4355
WASHINGTON – Today, the U.S. Environmental Protection Agency (EPA) Center for Corporate Climate Leadership announced the third annual Climate Leadership Award winners in partnership with the Association of Climate Change Officers (ACCO), the Center for Climate and Energy Solutions (C2ES) and The Climate Registry (TCR). Nineteen awards were given to 15 organizations and two individuals in the public and private sectors for their leadership in addressing climate change by reducing carbon pollution.
The 2014 Climate Leadership Award recipients are:
Organizational Leadership Award: City of Chula Vista, Sprint, and University of California, Irvine
Individual Leadership Award: Sam Brooks, Associate Director, D.C. Department of General Services, and Robert Taylor, Energy Manager, Washington Suburban Sanitary Commission
Supply Chain Leadership Award: Sprint
Excellence in Greenhouse Gas Management (Goal Achievement Award): The Boeing Company; Caesars Entertainment; Cisco Systems, Inc.; Ecolab; The Hartford; IBM; Johnson Controls; Kohl's Department Stores; Mack Trucks; and Novelis
Excellence in Greenhouse Gas Management (Goal Setting Certificate): Fruit of the Loom, Inc.; Hasbro, Inc.; and Kohl's Department Stores
“Our Climate Leadership Award winners have made great strides in reducing greenhouse gas emissions, and are providing leadership nationwide in many sectors of our economy,” said Janet McCabe, acting assistant administrator for EPA’s Office of Air and Radiation. "Their innovative approaches and commitment to reducing carbon pollution demonstrate that efforts to address climate change are repaid by saving money and energy, while supporting more livable and resilient communities, and a healthier, better protected environment now and for future generations."
The national awards program recognizes and incentivizes exemplary corporate, organizational, and individual leadership in response to climate change. Award recipients represent a wide array of industries, including finance, manufacturing, retail, technology, higher education and local government.
“The Association of Climate Change Officers is pleased to recognize another exceptional class of organizations and individuals who are demonstrating leadership in driving climate action into their organizational cultures,” said Daniel Kreeger, ACCO’s co-founder and executive director. “These award recipients are demonstrating critical devotion and leadership to managing and reducing greenhouse gas emissions and adapting to the risks and challenges posed by climate change. These recipients are role models for corporate, organizational, and individual leaders who can and should be responding proactively to climate change risks and opportunities.”
“Communities and businesses are already experiencing the impacts of climate change, and we need to act now to protect both our environment and our economy,” said C2ES President Eileen Claussen. “We join EPA in applauding the winners of the Climate Leadership Awards. These companies, organizations, and individuals demonstrate that we can save energy, reduce emissions, and take decisive steps toward a low-carbon future. We hope their accomplishments will serve as an example for others to follow.”
“The Climate Registry applauds this year’s Climate Leadership Award winners for demonstrating a meaningful, results-oriented response to climate change,” said David Rosenheim, executive director of TCR. “Exhibiting transparency, consistent metrics, and innovative mitigation measures, our deserving award recipients are building a stronger platform for policy, innovation, and business solutions to reducing carbon pollution.”
The President’s Climate Action Plan calls on the federal government to work with all stakeholders to take action to cut the harmful carbon pollution that fuels climate change. These organizations and individuals are working to do just that.
The awards are held in conjunction with the 2014 Climate Leadership Conference at the Hyatt Mission Bay Hotel in San Diego, Calif.
More information about the 2014 Climate Leadership Award winners is available at www.epa.gov/climateleadership/awards/2014winners.html
The EPA's Center for Corporate Climate Leadership was launched in 2012 to establish norms of climate leadership by encouraging organizations with emerging climate objectives to identify and achieve cost-effective GHG emission reductions, while helping more advanced organizations drive innovations in reducing their greenhouse gas impacts in their supply chains and beyond. The Center serves as a comprehensive resource to help organizations of all sizes measure and manage GHG emissions, providing technical tools, ground-tested guidance, educational resources, and opportunities for information sharing and peer exchange among organizations interested in reducing the environmental impacts associated with climate change.
More information about EPA’s Center for Corporate Climate Leadership: www.epa.gov/climateleadership
By: Sara Kendall, Weyerhaeuser
Publsihed in The Environmental Forum, January 2014
Companies have long engaged in risk assessment and mitigation as a core business practice.
The Intergovernmental Panel on Climate Change in its 2012 report “Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation” observes that heavy precipitation, heat waves, and droughts have increased over the last half century. Businesses may not have a position on climate change, but they understand how a flood can shut down transportation, a hurricane can topple buildings and powerlines, or extreme temperatures can disrupt markets and threaten operations and supply chains.
As noted in a recent report by The Center for Climate and Energy Solutions, “Weathering the Storm: Building Business Resilience to Climate Change,” there are significant costs associated with these weather events. In 2012, over 800 major weather-related disasters worldwide led to $130 billion in losses. The most expensive events cost more than $1 billion each. Further, 90 percent of the S&P Global 100 Index identified extreme weather and climate change as a current or future risk. Of those, more than one third stated they’ve already experienced adverse effects. It isn’t about whether a company believes in climate change. This is about staying in business.
The C2ES report highlights companies’ efforts to build business resilience. Not surprisingly, the insurance industry is among the first sectors to pay attention. Utility companies are building redundancy and looking at innovative approaches to handling storm surges. Natural resource companies have the added risk that their “factories” are directly exposed to weather conditions.
To get more insight on these issues, I asked Eileen Claussen, president of C2ES, to respond to a few questions raised by the report.
What does business resilience really mean?
"Companies have always navigated a changing business environment. But now they face a changing physical environment, as climate change leads to more frequent and intense heat waves, higher sea levels, and more severe droughts, wildfires, and downpours. Business resilience means assessing and managing these impacts on a company’s facilities, operations, supply and distribution chains, and costs."
Is building business resilience risk management or new business development?
"Both. Extreme weather is certainly a risk. It can close facilities, delay production, disrupt supply and distribution chains, raise operation and capital costs, and reduce demand. Extreme weather can also keep employees from getting to work, disrupt communication systems, and threaten the availability of power and water supplies. But there also are business opportunities in becoming more resilient. Some companies are already working on drought-resistant crops, storm-resistant building materials, and weather-related insurance products. Forms of distributed generation, which provided resilient electricity in the aftermath of Hurricane Sandy, are promising growth areas as well."
Are you encouraged by what you see being undertaken by businesses to prepare for and respond to extreme-weather events?
"What’s encouraging is that in our discussions with CEOs and members of corporate boards, we’re not being asked, “Is this a problem?” We’re being asked “What should my company do?” Most of the largest global companies are using existing business continuity and emergency management plans to assess and manage their climate risks. But only a few companies say they’ve used climate-specific forecasting tools to assess how these risks are evolving and the potential business impacts. These companies are generally dependent on a key commodity or operate in high-risk locations. So while the vast majority of firms acknowledge risks from extreme weather and climate change, their actions so far to address the risks aren’t going much beyond business as usual."
Where do you think more should be done, and what do you see as the biggest barriers for companies?
"Companies tell us they need user-friendly, localized projections of climate change, and models that can link these projections to specific business impacts. Those in regulated sectors such as water, electricity, and insurance need regulators to be open to the case for increased spending on resilience and policies that encourage customer decisions about sufficient levels of risk mitigation."
Is building business resilience private or public sector work?
"Both. Companies need to manage risks to their facilities and supply and distribution chains, but they also need governments to invest in strengthening resilience of public infrastructure. That’s one reason why we recommend voluntary public-private partnerships to bring together government and business expertise to develop and improve resilience planning.
My view: The bottom line is that extreme weather events are likely to continue and companies should think about building business resilience in a changing climate. We all will be better off if we’re better prepared."
Sara Kendall is vice president, corporate affairs and sustainability, Weyerhaeuser Company. She can be reached at sara.kendall@ weyerhaeuser.com.
Copyright© 2014 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELI®.
Political leaders in the Northeast have very different ideas about how to treat coastal properties ravaged by Hurricane Sandy. Some aim to reduce development along exposed coasts while others say let’s rebuild. How they proceed could set important precedents for managing rising flood risk along the nation’s coasts.
Motivated by concerns about more frequent and intense extreme weather, New York Gov. Andrew Cuomo plans to buy back damaged coastal properties from homeowners willing to sell and preserve the land as undeveloped public spaces. Cuomo’s plan would use funds from the Federal Emergency Management Agency (FEMA), which requires that purchased properties not be developed.
I live in one of those northern and western suburbs of DC that tend to lose power fairly frequently.
It used to be that one of the few nice things about losing power was the sound of silence. But those days are gone. Now losing power has a new sound: the whirring of the startup of my neighbors’ backup generators.
We need power not only to keep our food from spoiling and protect us from uncomfortable and even dangerous heat, but also to stay connected. As a nation, we are becoming ever more dependent on electronic devices. We cannot survive without our cell phones and computers, let alone our refrigerators and air conditioners. At the same time, climate change threatens the reliability of the grid through more intense heat waves and potentially more powerful storms.
While it’s easy to say we should work to prevent disruption in electricity, how much should we invest to bolster the resilience of the grid? And who should pay?