The Climate Adaptation Gap
Recent data indicate that a gap exists between corporations understanding the big-picture risks of climate change and their actions to address those risks to shore up their bottom line.
MIT’s Sloan Management Review published results of the annual sustainability survey they conducts with BCG (fka The Boston Consulting Group). In Harvard Business Review’s synthesis they note “the vast majority of respondents in a new Sloan and BCG survey say climate change isn’t a significant issue … And of the 27 percent that acknowledge climate change is a risk to their businesses, only 9% say their companies are prepared for the risk.
I contrast this data with another corporate survey, the World Economic Forum’s Global Risk Report, in which corporate leaders include climate-related risks in four of their top 10 risks – diverging from MIT’s respondents who do not see climate change is a significant issue. (I wrote about WEF’s report last week).
So, based on the WEF numbers, if corporations see a risk, but, based on the MIT numbers, they do nothing about it, that gap suggests that businesses are not yet sure how to manage the risk that changed climate brings to their value chains.
Since climate adaptation relates to the direct impacts on our most important assets – our employees, our customers our communities and our families, those who advise corporations possess a great opportunity to demonstrate to their clients the significant collateral benefits of a five step plan of adaptation action:
- Examine the relative risks of geographies in your supply chains.
- Identify relevant vulnerabilities in geographies where you maintain significant human and capital assets.
- Review your business-continuity plans based upon these vulnerabilities and risks, perhaps including an economic risk analysis for the most likely issues.
- List strategies that could be used to prepare your most vulnerable assets.
- Create a short and medium-term plan that:
- Starts with adaptive actions you already are taking as part of your business as usual.
- Sets priorities of adaptations with collateral benefits; e.g., mitigating greenhouse gas emissions (onsite stormwater management), improving employee morale (work from home options) or buoying your reputation (shoring up public health systems in one of your supplier hubs).
- Includes financials for avoided risks.