Companies are planning for climate risks

Weathering the Storm: Building Business Resilience to Climate Change

Economic damages from weather-related disasters climbed to near-record levels in 2012, with over 800 major events worldwide causing an estimated $130 billion in losses. Munich Re reported that it was the third-costliest year on record behind 2011 and 2005. Many …

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Many businesses are moving beyond identifying the potential risks posed by climate change impacts and are taking the next step: developing solutions.

More intense heat waves, rising sea levels, and heavier rainfall could lower crop yields and labor productivity, increase energy costs, damage property, and disrupt operations.

None of these impacts are good for business.

More than 80 individuals from companies, cities, and nonprofits shared their climate resilience ideas and experiences at a C2ES-sponsored workshop, “Emerging Best Practices for Identifying Climate Risk and Increasing Resilience,” at the 2015 Climate Leadership Conference in Washington.

Emilie Mazzacurati, founder and CEO at Four Twenty Seven, Inc., spoke at a C2ES-sponsored workshop on corporate climate resilience at the 2015 Climate Leadership Conference. Photo by Ellie Ramm.

Key insights from the session include:

  • Businesses will need to move more toward resilience and prevention, and away from traditional recovery and rebuilding after extreme weather events.
  • Companies need to work across departments, such as sustainability, risk management, operations, and financing, to address climate risks.
  • Engineering standards should be updated to take climate change into account. This would help companies with siting and improving buildings and other infrastructure.
  • Public-private partnerships are an opportunity to share knowledge and make maximum use of efforts for risk assessment and resilience planning by companies and city, state and federal agencies. Businesses and public agencies have mutual interests in managing energy, water, and transportation infrastructure, and protecting communities.

Emilie Mazzacurati, founder and CEO at Four Twenty Seven, Inc., said at the workshop that one of the main barriers to corporate resilience efforts is the missing link between collecting climate data and understanding company-specific impacts. She also noted that many companies consider climate change only as a sustainability issue and do not incorporate climate change considerations into risk management.

Dr. Robert Kopp, a climate scientist at Rutgers University, outlined a report that could help companies link the science to the impacts. The American Climate Prospectus: Economic Risks in the United States links a 21st century climate to economic impacts on a state-by-state basis for a variety of sectors, including health, agriculture, and energy.

Pacific Gas & Electric Company has an in-house climate science team to help make the connection. Director of Corporate Sustainability Chris Benjamin said PG&E includes climate change in the risk management process, and develops resilience strategies. He also highlighted the importance of reporting on climate risks in corporate disclosures like the CDP, which gathers information from companies on greenhouse gas emissions, climate risks, and approaches used to address them.

C2ES provided a detailed snapshot of the state of resilience planning among a cross-section of global companies in the 2013 report, “Weathering the Storm: Building Business Resilience to Climate Change.” We’re researching what companies are doing to address their risks for a follow-up to this report, which will be available fall of 2015.