A report from the Pew Center on Global Climate Change – “Adapting to Climate Change: A Business Approach,” makes the case (which I must admit I never questioned) that advance preparation for the impacts of climate change can save money over the cost of absorbing those impacts without any preparation. Isn’t this all taught in Aesop’s Fables and Poor Richard’s Almanac?
The most valuable parts of the report are the screening process it provides for businesses to assess their risks, and its overview of the cascading indirect impacts on infrastructure, utilities, local electricity, transportation and other sectors critical to business operations that tend to be overlooked when people think, “Oh, it’s just going to be hotter.”
The report provides examples of adaptive businesses – enterprise level businesses – but there’s useful information here that applies to small local businesses, too.
Many businesses have taken steps to reduce greenhouse gas emissions voluntarily. Many are taking into account some of the impacts of climate change—potential state and federal regulations, shareholder perceptions, and changes in consumer and supplier markets, for example—on the cost of doing business now and in the future. Fewer businesses, however, are incorporating the risks and opportunities associated with the physical effects of climate change in their business planning. As trends in climate become clearer and the uncertainty surrounding future changes is reduced, more businesses will want to consider whether to adapt to projected changes by taking action now. This, in turn, involves reacting to and managing risks as well as taking advantage of opportunities.
Of course, adaptation to climate change can provide some business opportunities, too. You might even start a business to advise businesses on how to adapt, or to produce products that help businesses and citizens adapt. But mostly, this report is about risk assessment and the business advantage in the future is likely to go to those who act appropriately to that assessment in the present.
Even in more developed countries with adequate resources, effects on water supplies, ecosystem health, species diversity, and the effects of extreme weather events can pose significant risks to business and even households. Taking the first step of recognizing these potential risks, and asking the question: “How and to what extent are these risks relevant to decisions I am making today, tomorrow, and in the near future?” is an important action for government at all levels, large and small businesses, and even households to take.
The screening process included in the report takes you through a flow chart of questions that, first, evaluate the importance of potential climate impacts to your particular business and identifies 3 categories of risk, with Catagory 3 being “Climate is not a high priority” and Category 1 being “Take action to assess risk in detail and respond.”