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.”

The Pew Center on Global Climate Change has released another great report, this one addressing businesses and how they should consider the potential impacts of climate change on their operations, their models, their strategies and their planning. While ICLEI serves as a guide for local governments and various activist groups such as the Post Carbon Institute and Transition Towns help organize civic groups, businesses have so far lacked frameworks for dealing with climate forecasting.

Adapting to Climate Change: a Business Approach is a document that all businesses – large, small, local and global – should read.

Climate change represents a new and somewhat daunting topic for many businesses. The challenge is compounded by the diverse and uncertain projections of changes in temperature, precipitation patterns, extreme events, and other effects. This paper outlines a sensible business approach to analyzing and adapting to the physical risks of climate change. It focuses on a critical first step in assessing these climate impacts: understanding the potential risks to business and the importance of taking action to mitigate those risks. Not all businesses need to take action now; this paper develops a qualitative screening process to assess whether a business is likely to be vulnerable to the physical risks associated with climate change, and whether a more detailed risk assessment is warranted.

In the forward to the book Megacommunities, Walter Isaacson writes

We are all in desperate need of game-changing ideas. Why? The simple answer is that we face a growing list of complex and challenging issues, and as a society we increasingly find ourselves stuck. Not necessarily for a lack of trying, or for a lack of appreciation of the consequences. We know that these issues—global climate change, preparing for pandemics, responding to natural disasters, global terrorism, water scarcity, aging populations, aging infrastructure, to name but a few—have the potential to become massive challenges in the next few years. And these problems manifest on both global and local levels. Consider how the need to develop new anti-terrorism or anti-pandemic initiatives applies not just globally but city by city, or how new levels of natural disaster—and new drains on government resources—can lead to situations like the one experienced in Biloxi, Mississippi or New Orleans since Hurricane Katrina.

The authors of this book have applied their varied consulting experience to finding solutions for increasingly complex problems at the local level, where resources from a variety of influential sources can be joined and coordinated. Elements of local government, business and civil society must be in synch – sharing knowledge and responsibilities around commonly recognized challenges – if those challenges are going to be met in a dynamic situation such as climate change.

The book defines a megacommunity as:

  • the space in which complex problems exist, and are addressed
  • an collaborative environment where leaders interact according to their common interests, while maintaining their unique priorities
  • a lens through which we can examine a complex problem in a new way
  • determined by the existence of tri-sector engagement and an overlap in common interest

This is a book I’ll be reading soon, but having heard already about the application of its principles in Dade County, Florida, I wanted to make sure it got on my blog today.