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Ratified Paris, Now What?

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Now that major economies have begun to ratify the Paris Climate Accord, countries need to deliver on their pledges. But how? And what will this mean for businesses?

In part one of this article we identified that businesses would inevitably bear the brunt of country-level reductions to greenhouse gas emissions. In this blog we drill into what businesses should do to prepare.

While governments are initially targeting the low hanging fruit of the few dozen or hundred companies that produce the bulk of their counties’ emissions (think coal fired power stations and steel makers, for example), even this may affect many organisations’ cost bases as input prices for power and other affected items rise, unless you’ve already insulated your company by purchasing renewable energy.

Regulated efficiency initiatives to reduce energy consumption and emissions are also gaining pace, benefitting firms whose buildings, manufacturing processes and products are already highly efficient. Innovation in energy and emissions efficiency will become a key point of difference for makers of a wide range of products and services.

Emerging categories such as electric cars (charged from renewable sources) and autonomous vehicles (which eventually could reduce the total number of vehicles and radically reduce congestion inefficiencies, as well as being programmed to drive as efficiently as possible) take efficiency initiatives into the realm of disruptive technologies. Companies will need to think years and sometimes decades ahead when designing product innovations to ensure they are not left behind by technological upstarts.

Eventually, regulations will extend to a broader range of GHG-producing compounds, including the fluorinated gases used in TV screens and the HFCs that have replaced CFCs as a refrigerant and propellent in spray cans. This will spark innovation in the design of products or processes that currently rely on such compounds, as well as services or products to ensure that their use is tightly controlled and doesn’t lead to them escaping into the atmosphere, either during or following the product’s lifecycle.

While the Australian government is currently clinging to its Direct Action, “pay the polluter to pollute less” policy, inevitably that will need to give way to a “polluter pays” mechanism.

Meanwhile, governments will push the burden of achieving GHG targets onto future administrations, which will compound the level of rapid transformation that businesses will be forced to deliver as the Paris commitment deadline approaches. And there is a clear expectation from the United Nations that many countries’ commitments will need to be strengthened in coming years in order to limit warming to the agreed target of 1.5 to 2 degrees Celsius.

Companies that take the lead today will be well positioned when this crunch comes.

Call Adaptive Capability today to develop the strategy for your business.

 

Image Credit: blindholm / BigStock

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An unexpected windfall

Cable Recycling 230467069For most people, recycling is something we typically take for granted. But with increasingly sophisticated waste processing facilities, there are opportunities for organisations to capture residual value from old assets and avoid unnecessary costs simply through small changes to their contractual processes.

Take an office refurbishment, for example. When a company has been in its premises for 10 years or more, it is not uncommon to embark upon a significant refurbishment. Often this involves stripping out (demolishing) the old fit-out, a process that produces significant waste.

Many companies will simply engage a construction contractor to undertake the works. That contractor will then appoint the various trades to undertake both the strip out and the construction of the new fit-out. Whoever winds up with the job of removing the old environment may find themselves with a gold mine of opportunity, ranging from good quality furnishings in reasonable condition that can be on-sold; through to carpet tiles, copper cabling, air conditioning units, other metals, glazing and in some cases even plasterboard (drywall) and structural concrete.

By diverting these waste streams away from landfill, an immediate saving can be made by avoiding tip fees (which vary, but are generally in the hundreds of A$ per tonne in Australia).

Secondly, waste transportation and handling costs can be avoided if the recoverable value is sufficient for it to be profitable for a recycler to collect the waste material from a building site.

Thirdly, net of transportation and processing, some materials have a sufficiently high recoverable value that they can yield a profit, that may be split between the recycler and the strip out contractor.

Most organisations undertaking an office renovation (and even a number of construction contractors) are not well versed in the relative recyclable value of different items and materials. Furthermore, the scope of what can be profitably recycled is expanding every year. As such, the recoverable value opportunity often sits with the organisations that are at the bottom of the contracting food chain. Or worse, items with high recyclable content or resale value wind up in landfill.

As an asset owner, i.e. a company that is about to undertake a refurbishment, or a landlord whose tenant has agreed to a negotiated make good settlement at the conclusion of their lease (and therefore has walked away from their fitout), there is an opportunity to carve out some of that recoverable value by engaging directly with a specialist recycling company (or several recyclers, each specialising in separate materials).

While it involves a little more coordination, and a slight change to the typical contractual structure (which should be negotiated in advance), savvy asset owners can:

  1. Avoid unnecessary landfill fees;
  2. Yield a handy financial contribution (it’s a rare but welcome change to be sending invoices rather than receiving them as the client of a fit-out project!); while
  3. Improving the sustainability outcomes of their project.

Thinking outside of the square can result in innovative disruption to normal asset lifecycles. Talk to Adaptive Capability today about this and other ways benefit your business.

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Legal innovators profit from changing climate

JusticeThe legal fraternity is often good at spotting opportunity. So it comes as no surprise that innovative practices are developing practice specialities around carbon markets and climate change, appealing both to major greenhouse gas emitters and the parties that are affected by their emissions.

According to DLA Piper, for example, climate legal risk accompanies a decision that is either affected by climate change, or a decision that will affect climate change.

We’ve identified a number of opportunities for legal services in this area and predict there are plenty of fees to be made over the next couple of decades. For example:

  • Helping corporates around compliance with carbon mitigation legislation such as emissions reduction and trading schemes (as such policies are applied in different jurisdictions) and carbon footprint reporting obligations.
  • Supporting insurers and other aggrieved parties launching legal actions against governments (or corporates) for failing to adapt their infrastructure to deal with extreme weather events that are becoming more frequent/severe as a result of climate change. An early example was a suit by a U.S. Insurer against Cook County municipalities for failing to take action that would have reduced flooding around Chicago in April 2013 (later retracted, but an interesting PR exercise none the less).
  • Plaintiff and defendant representation as individuals and companies face property devaluation or other costs due to governments’ actions or inaction around preparing for sea level rise. There are potentially good fees from well heeled coastal property owners attacking new development restrictions aimed at reducing the risk of property damage from coastal inundation as well as from local governments attempting to defend such regulations.
  • A nascent class action market against persistent GHG emitters, particularly those found to have actively funded the climate denial campaign or hindered the enactment of sensible legislation to avert CC. Low lying island states whose very sovereignty is at risk from rising sea levels are one such example. One group has recently won a court action against the Netherlands Government for its failure to do enough in terms of emissions reduction.
  • Actions by investors against companies (particularly in the resources sector) in the event that valuations fall due to legislation aimed at limiting their ability to exploit fossil fuel reserves. A similar risk may apply to credit ratings agencies whose assessments fail to take account of the possibility of stranded assets.

Talk to Adaptive Capability to find out how your business may be affected by climate risks and where the opportunities lie.

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Autonomous Vehicles – how a technology disruptor could be good for people and planet

Autonomous Vehicles - how a technology disruptor could be good for people and planetWhy is technology giant Google developing self-driving cars?

For several years, Google has been testing a fleet of autonomous (self-driving) cars. If this seems like a radical departure from their core business of Internet search and advertising, you might be underestimating the depth of their vision. Ultimately, a future of self-driving vehicles could be transformative, benefitting people and planet in a host of ways, though to the detriment of a number of existing industries.

In this first blog in a series on AV’s we look at some of the direct benefits: safety and efficiency.

Safety

Where human drivers are often inaccurate, inconsistent and somewhat irrational, a car with a computer behind the wheel is the opposite. As such, the only accident Google’s fleet of autonomous cars has notched up in nearly a million miles of driving was caused by the driver of another vehicle.

Bristling with sensors that enable the computer to analyse what’s happening around it in three dimensions and 360 degrees, a self-driving car is applying much more rigorous analysis to its driving decisions than a human driver ever could. It never takes its “eyes” off the road to change the radio station, shout at the kids in the back seat or furtively check a text message on its phone, meaning no concentration lapses. So they’re pretty safe (unless the computer ever crashes).

Fewer accidents would ease the stress on emergency services and hospitals, although government revenues would dip to the extent that there would be fewer speeding and DUI fines issued. Of course, fewer tickets means less cases to be contested, freeing up the courts for more serious infringements. It would also mean the end of arguments about who is going to be the designated (non drinking) driver. And clearly, both the smash repair and taxi industries could be adversely affected.

Efficiency

Where human drivers often rev their engines, accelerate and brake heavily, frequently exceed the most efficient speed given the aerodynamics of their vehicle and generally drive unevenly, a computer can be programmed to optimise fuel efficiency. So that’s an initial tick for the environment.

Network the car to traffic control systems and real time traffic data (such as Google already collects from users of its phones and Maps app), and the computer can now optimise your route to avoid traffic congestion, saving both time and fuel.

And things get really interesting when you start to get a sizeable number of autonomous vehicles on the roads. If they can sense and talk to each other, then road congestion would really ease up – they’d be able to negotiate lane merges and intersections more smoothly; pull away from traffic lights in unison and so on. In turn, traffic control systems could take data from cars and use it to synchronise traffic light sequences in real time along major routes. Following distances could be reduced between autonomous vehicles, since each car in a contiguous convoy would know the intentions of the others: only the lead AV would need to maintain a traditional safe distance to the human-driven vehicle in front.

These innovations could significantly increase the capacity of existing roads and again reduce journey times and fuel or energy wastage. And on roads away from high pedestrian or cyclist zones, speed limits for AV’s could potentially be increased.

Benefits multiplying

In this post we’ve only scratched the surface of the profound impacts broad adoption of AV’s could have. In the next instalment of this series we’ll look at potential impacts to the way we design cities plus how the effects might be felt in other parts of the transportation sector.

But back to the question of where it fits into Google’s strategy?

Well, one reason is that if you no longer need to devote your attention to driving, it could be pretty boring being chauffeured by your car to your destination. And to Google that means idle eyeballs looking for content and therefore potentially being exposed to ads. AV’s are likely to feature sophisticated entertainment, app and browsing options.

 

Talk to Adaptive Capability today about what the future means for your business.

Image credit: Liushengfilm/ShutterStock

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#SydneyStorm a wake up for a global city

#SydneyStorm a wake up for a global cityWhat are the implications of a new climate normal? Sydney, Australia has just been pounded by what has been hailed by some as the storm of the century. Three days of heavy rain and sometimes cyclonic strength winds, produced by a low pressure system off the East coast of the continent, has caused damage and disruption over a 300km section of coastline centred on the global city. Coming in mid April it was unseasonably early for this type of event. With the full damage bill still to be counted and hundreds of thousands of homes and businesses still without power, the insurance industry is already bearing the brunt with tens of thousands of claims amounting to hundreds of millions of dollars. While the level of damage is small compared to some recent weather related catastrophes, it nevertheless provides a salutary reminder of the types of events, which globally are expected to become both more frequent and more intense over the coming decades*, as shown in the illustrative figure below: Physical effects of climate change There are several initial take-aways from the recent storm when considering the business impacts of future events:

  1. Coastal property is exposed. A government wave buoy off Sydney recorded the largest off-shore wave in the area since such record-keeping began, at 14.9 metres. The winds whipped up a storm surge, which encroached to near record levels in some areas, coming within metres of homes. The level of beach and dune erosion increases the risk of property damage from the next storm. Increasingly, councils and insurers will be forced to reassess the risks of further coastal development, putting values at risk.
  2. At some point governments may also take action on flood plain exposures. Properties on flood plains were literally swept away causing tragic loss of life, with images reminiscent of the Lockyer Valley tragedy in 2011.  In that case the community chose to rebuild on higher ground. As the Brisbane floods showed, however, thousands of homes and businesses are built on exposed land, significantly increasing damage and disruption levels.
  3. Major cities are far from immune. Considerable surface-flooding was experienced in several parts of Sydney, with road closures and dozens of vehicle rescues. Ageing storm water infrastructure needs to be expanded significantly to cope with extreme precipitation events, a process municipalities such as Chicago, Illinois and Miami Beach, Florida have already commenced following major or repeated inundations.
  4. Disaster response, hazard reduction and recovery is a growing business opportunity. For example, disaster warning aggregator, Aeeris (AER.AX) floated on the Australian Exchange in late 2014. While its debut has been modest it is a sign of growing innovation and demand in the sector.
  5. More storms equals lower business productivity. For example, to ease the stress on the transport system the state Premier urged employers to show flexibility and allow employees to stagger their commutes or go home early. Multi-day electricity supply disruptions are also taking their toll on businesses.

Global environmental shifts are disrupting business-as-usual, with a range of direct and indirect impacts. Talk to Adaptive Capability today to find out how to manage these risks and identify value creation opportunities for your business.

*Note: it is not yet clear whether the particular East Coast Low conditions responsible for this week’s storm will in future lead to an increase in the frequency or severity of such events. Future climate predictions exhibit a high degree of regional variation and further research is required. This link provides further discussion of some of the forecasting challenges.

Image credit: Prudkov/ShutterStock

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Healthcare to feel the Heat

Healthcare to Feel the HeatWith growing evidence that our climate is changing, we predict the key health challenges arising from a warmer climate:

  • Heat related illnesses and mortality from exposure to extreme temperatures. This will particularly impact on people who work outdoors or in non-air conditioned environments, plus infants, older people, the ill and obsese, who are more susceptible to heat stress and dehydration. Heatwaves are already a leading cause of death compared to other types of natural disasters (particularly in developed nations where preparedness levels for violent storms and earthquakes generally lead to significantly fewer fatalities than those affecting developing nations). For example, excess mortality of up to 70,000 people was associated with the severe European heatwave of 2003. More broadly, higher temperatures may also provide excuses for some people to exercise less, potentially increasing rates of health conditions associated with a more sedentary lifestyle.
  • Water supply contamination during extreme precipitation and flood events.  Flooding in Brisbane in 2011 led to the temporary closure of one of the main water treatment plants as the incoming water was too muddy to be treated. On that occasion water supply interruptions were avoided on that occasion by re-routing supply from other treatment plants and implementing demand reduction strategies. However, there are likely to be increasing situations where extreme weather jeopardises fresh water supplies or people are otherwise forced to drink untreated water, potentially leading to a range of illnesses.
  • Exposure to flood waters and the after-effect of floods. It is not uncommon in many areas for sewage systems to overflow during significant flooding, raising infection rates. Receding flood-waters can become breeding grounds for mosquitos and other potentially harmful insects. Mould in buildings resulting from exposure to flood waters can in turn cause a variety of health conditions. And of course the murky and often fast moving water presents public safety issues for people unfortunate or unwary enough to find themselves trapped or engulfed.
  • A rise in the frequency and/or intensity of extreme weather events may also result in greater injuries / illnesses and demand for emergency services.
  • The spread of tropical, insect-borne diseases to areas in higher altitudes and higher latitudes as it becomes warmer.  Insect carriers of such diseases thrive in the tropics because it is warm overnight and all year round, meaning no die off in cooler months as is common in temperate climates. Meteorologists are already observing milder winters and warmer nights in many areas as the atmosphere retains more heat.
  • Additional health risks arise from the greater expected incidence of bush fires (not to mention an increase in lightning strikes). For example, during the summer of 2010 an estimated 55,000 people died in Russia from a combination of a severe heat wave and respiratory illnesses exacerbated by a resultant series of major bush fires.

Given these challenges, risks abound in the healthcare and public safety arena, but so do opportunities. Throw in our ageing and growing population plus the increase in non-communicable diseases and it seems that growth in demand for healthcare services is assured, though affordability may be a key consideration given reduced public sector capacity.

Key opportunities to reduce these impacts include:

  • Prevention:
    • training and education of at risk groups;
    • risk assessments;
    • preventative pharmaceuticals and related interventions;
    • water purification;
    • waste water infrastructure;
    • specialist clothing;
    • air filtration and cooling systems;
    • personal and networked health monitoring technologies;
    • other hazard reduction.
  • Relief:
    • increasing demand for existing and new drugs and forms of treatment for conditions related to heat, water contamination and tropical diseases and other exposures.
  • Health Infrastructure:
    • increasing demand for health professionals and emergency workers;
    • associated infrastructure, hospital beds;
    • education;
    • hospitals located in regions exposed to extreme weather will need to be made more resilient.
  • Sustainability:
    • sustainable medical procurement;
    • medical waste recycling;
    • energy and water efficiency improvements in medical practice;
    • other technologies and innovations to reduce environmental impact of healthcare.

On the flip side, there are a number of significant health benefits associated with a switch from fossil fuel dominated energy systems to renewables, principally a likely reduction in a range of respiratory illnesses given reduced particulate matter pollution. Given a warming climate, less severe winters in some regions may also reduce cold-related morbidity.

Adaptive Capability assists businesses in and servicing the healthcare sector to assess the risks and opportunities arising from climate change and environmental issues. We help our clients position their businesses to capture sustainable growth over the medium to long term. Our unique diagnostic tool, the AdaptiveCMM, baselines your organisation’s capabilities and delivers a roadmap of initiatives to control risks and identify new or enhanced revenue streams.

Talk to Adaptive Capability today to future proof your business.

Image credit: Rob Bayer/ShutterStock

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What’s your ESG Rating?

What's your ESG Rating?

A new breed of sustainability analysts is increasingly driving institutional investor decision-making. Find out more.

As a company director or senior executive you keep an eye on your company’s credit rating and – if you’re a listed entity – your investor relations team will track what market analysts are writing about your stock. But have you checked your ESG Rating lately?

Environmental Social Governance (ESG) is the umbrella under which a growing number of specialist analysts and index providers are tracking aspects of company performance other than its financial results.

In recent years buy side analysts such as Sustainalytics have emerged providing reports or rankings about companies’ ESG performance to fund managers and other major investors. New indices and tools have been developed by the likes of MSCI to help investors understand and manage the ESG risks inherent in their portfolios. And not for profits like the global Carbon Disclosure Project have been directly collecting environmental data from companies and cities to inform the investment community.

The growing influence of such data was highlighted late 2014 when the Australian National University’s endowment fund controversially announced it was dumping a number of fossil-fuel exposed stocks on the basis of analysis from Canberra-based CAER. It is not alone, with a global divestment movement spearheaded by environmental groups and aided by organisations such as the Asset Owners Disclosure Project convincing a growing number of institutional and individual investors to sell down their holdings in the fossil fuel industry and take business away from banks that continue to fund it.

Company directors and executives should ensure they understand what is being said about their organisations by the various ESG analysts and that the information being presented to investors is accurate, rather than simply scraped from public domain sources as is often the case. Otherwise they may unwittingly lose shareholder value if investors make divestment decisions on the basis of incomplete or misrepresentative data.

Talk to Adaptive Capability today about safeguarding your business’ future.

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Reining in Runaway Software Inefficiency

Data Centre

Many organisations are investing in making their Internet and IT infrastructure more energy efficient. But in the search for sustainability, a hardware and data centre-centric approach may be missing the point.

Recently, Adaptive Capability was asked to comment on an Australian government initiative to improve the energy efficiency of data centres.  The discussion report proposes a number of sensible suggestions including applying energy efficiency ratings and/or minimum standards to data centre facilities and the IT equipment they house.  However, we wondered if these approaches obscured a much broader opportunity for transforming the IT industry to a more sustainable footing.

What we’re seeing in the data centre space is a run away freight train of more and more processing power and storage globally, supporting all the amazing web apps that people suddenly cannot live without, coupled with corporates collecting vast amounts of “big data” to try to get new insights about their customers and products.

Fundamentally, energy demand in data centres is a behavioural problem linked to our use of technology.  While we’re not going to be able to change that very easily, buying more energy efficient servers or improving the Power Usage Effectiveness (PUE) of our data centres seems to to be like putting a band aid on a cancer victim. We think, however, that without trying to tackle the apps/big data juggernaut, there is something that governments could do that might have a more sustained impact

As a long term representative of a technical working group for the Australian government’s NABERS (National Australian Built Environment Rating System) we note that the data centre rating tool released in 2013 made significant compromises in attempting to come up with a measure of the efficiency of “useful computing output”.  Measuring hardware efficiency improvements in metrics such as megaflops or disk I/O (input/output) per Watt (W) is relatively easy but the working group didn’t manage to figure out a way to build a viable, assessable metric that would serve as a proxy for, for example, “emails delivered per W” or, more usefully, “tax returns processed per W” or “Facebook posts per W”.

That’s where we think a lot more work is required: tackling the efficiency of computer software itself (as well as the way people use it).

The inefficiency of software is, we believe, directly linked to the continued realisation of Moore’s Law, which has effectively led to a doubling of compute power (typically for about the same or lower cost) every couple of years for the last 50 years.  This has created a software development culture that encourages “bloat-ware”: there is no need for coders to cut resource efficient code because a faster computer or device with more RAM (Random Access Memory) and storage is released every few months. Meanwhile there’s money to be made in adding new features (whether they’re needed or not) and churning out new versions of ever more resource hungry software every couple of years.

Inefficient code (and lazy operating systems that allow a build up of “system detritus” and memory leakage) benefits the hardware suppliers since it creates an impetus for people to upgrade their devices on a regular basis, cementing a mutually-beneficial relationship between the hardware and software worlds.

Many organisations typically figure on replacing compute equipment within three years (and many people replace their mobile devices more frequently in line with two year phone plans), creating a mountain of eWaste with huge ecological impacts in terms of embodied energy, CO2e emissions and resource depletion.  Whereas you’ll typically get at least 50 years of economic value out of a building, meaning the embodied energy is usually significantly lower than the energy in use, in the case of computing hardware the equation is probably a lot closer to parity or worse and the lifecycle operating energy costs of a server typically exceed the purchase price.

If we are serious about tackling ICT energy efficiency we need to start with the software industry.  Universities should be teaching resource-efficient software development.  There should be measures to encourage applications and operating systems that run comfortably on older hardware. Major software and hardware companies (which are typically US based, so international cooperation would be required) could be investigated to see whether there is any evidence of anti-consumer collusion in perpetuating the Moore’s Law-driven spiral of software upgrade necessitating hardware upgrade. Leaders in sustainable computing (i.e. maximising the longevity and efficient use of compute resources) should be identified and celebrated.

Consumer education is also important to help people understand how their use of technology is leading to inefficiency. Something analogous to the former Australian Labour Government’s “black balloons” campaign but associated with the energy costs of each photo they upload to Facebook; each Google search; even the extra bytes of storage associated with their email signature file and the near ubiquitous “Please consider the environment before printing this message” sign off.

We recommend the objective of government policy in this area should be, on the one hand, to minimise the amount of hardware and associated infrastructure required to perform a particular function, but also, critically, to prolong the economic life of that investment in hardware and infrastructure.

Talk to Adaptive Capability today about ways to safe guard your organisation’s future.

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Climate change: the hefty price of business as usual

Confrontation

The debate is heating up, and yet Australia’s political leaders seem to be missing the real cost of climate change – a former Goldman Sachs heavyweight sheds insight into which parts of the economy will be hit by inaction the hardest.

Where do our major parties really stand?

The political world has become a bit topsy turvy lately. Countries like Canada, previously respected for their environmental leadership, have become international pariahs for promoting exploitation of their tar sands deposits.

And in Australia, as more than one commentator has observed, it’s become impossible to tell up from down as politicians backflip on major reforms.

The Liberals are dumping a free market solution for greenhouse emissions reduction (the carbon tax was legislated to transition to an Emissions Trading Scheme after the initial fixed price period); Labour is opposing a big government solution (the Coalition’s Direct Action scheme); and ironically the Greens are against a rise in the fuel excise tax (which might have sent a pricing signal discouraging the use of high emitting private vehicles).

What’s the cost of discord?

Just as Australia winds back its carbon scheme, a chorus of influential conservatives is dispelling arguments that reducing greenhouse emissions is taxing on the economy.

Hank Paulsen is a commentator to watch. He served as the US Treasury Secretary during the Bush administration and before that, was the head of one of the world’s most successful investment banks – Goldman Sachs. Having recently published a call to action on climate change in the New York Times, he’s teamed up with Republican former mayor of New York Michael Bloomberg and others to produce a report called Risky Business.

Risky Business focuses on the economic impacts of climate change in the US over the remainder of the century and identifies the worrying financial impacts of sticking to a business as usual scenario.

Here’s a quick summary of the Risky Business forecast:

  • Property damage from coastal inundation in the hundreds of billions of dollars
  • Decreased labour productivity for outdoor work due to the rise in extremely hot and/or humid days
  • Ballooning energy costs (partly due to soaring demand for air conditioning)
  • Stretched healthcare systems
  • Increased heat-related mortality
  • Reduced agricultural productivity

Acting now may leave Australia in a better financial position

 In fact, not only does a business as usual scenario turn out to have significant costs; a new economic study commissioned by the United Nations has found that a high emissions reduction scenario could transform major economies to zero net greenhouse emissions as soon as 2050 while still maintaining comfortable rates of growth. Australian National University economist Dr Frank Jotzo, a lead author of the forthcoming report, has noted (Sydney Morning Herald 9/7/14) findings that an annual Australian GDP growth rate of around 2.4% could be maintained while making massive emissions reductions to energy, agriculture and other sectors.

And this is where the rhetoric about the economy paying the price of slashing carbon emissions starts to sound more than a little hollow.

Of course studies and predictions come and go and political will is a huge obstacle to be overcome in many countries. However, with notable conservatives questioning the viability of business as usual and growing evidence that the move to a low emissions scenario may not be as economically difficult as it has been portrayed, the mood is beginning to shift.

This shift presents both risks and opportunities for many organisations. To find out how, talk to Adaptive Capability about safe guarding your organisation’s future.

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Climate change – your business is at more risk than you think

Snowless Ski Slope
Climate change is already threatening entire regions and industries, and some businesses have greater risk exposure than others…

When people think about the risks of climate change, most focus on damage and disruption caused by the predicted increase in the frequency and intensity of extreme weather events.

However, there’s a lot more to consider in a comprehensive assessment of climate change and other environmental risks. Take shocks to input prices as governments introduce or expand the scope of carbon pricing schemes or impose costs on other environmental externalities. Or reputational damage – potentially accompanied by class action law suits – aimed at major polluters or plunderers of the earth’s natural capital.

Dying industries

How about the failure of whole industries or a regional collapse in demand? In Australia, coral coast tourism and alpine sports are likely candidates, with ripple effects along their supply chains. 2014 has already seen record autumn temperatures, and the traditional June start to the Snowy Mountain ski season has been scuttled by above freezing temperatures and still-grassy slopes.

Moreover, as water supply shortages bite in the face of prolonged severe drought, as has been occurring in the South Western United States, the future of water intensive agriculture and industry is also under threat.

Deserted towns

A lack of water in turn precipitates climate-related migration, adversely impacting businesses with a local customer base. This has already been seen in the abandonment of small towns across Nebraska, Kansas and nearby states as the area’s lifeblood – the over-exploited Ogalalla aquifer – has begun to run dry and the land has reverted to near-desert conditions.

Is any business immune?

While organisations with few long-term assets, low capital investment and no involvement in the energy industry may consider themselves relatively immune from climate risks for the foreseeable future, our research suggests this is not always the case. Undertaking a detailed, climate focused risk assessment covering short, medium and long term time horizons is critical to understanding your organisation’s likely exposures to the wide range of direct and indirect threats.

Talk to Adaptive Capability today about safe guarding your business’ future.

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