Climate proofing businesses is an imperative

World Environment Day 2011, Climate proofing businesses, Fourth Assessment Report, Intergovernmental Panel on Climate Change, Greenhouse gases: "Warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice and rising global average sea level." Given this reality, industry needs to look at the impacts of climate change on business and prepare itself for dealing with this growing challenge not only in keeping with global objectives but also in the interest of success purely in a business sense. The AR4 found that climate-change vulnerabilities of industry, settlement and society are mainly related to extreme weather events rather than to gradual climate change. Vulnerabilities of industry, infrastructure, settlements and society to climate change are generally greater in certain high-risk locations, particularly coastal and riverine areas, and areas whose economies are closely linked with climate-sensitive resources, such as agricultural and forest product industries, water supply and tourism; these vulnerabilities tend to be localised but are often large and in many cases on the increase.

Business adaptation will be in response to both direct impacts (involving direct observations of risks and opportunities as a result of changing climatic conditions) and indirect impacts (including changing regulatory pressures and consumer demand). For many businesses, climate risk management can be integrated into overall business strategy and operations where it will be regarded as one among many issues that demand attention, to the degree that such adaptation is supported by investors and shareholders.

The AR4 also found that neither adaptation nor mitigation alone can avoid all climate change impacts. Adaptation is necessary both in the short-term and longer-term to address the impacts of climate change. However, adaptation and mitigation can complement each other and together can equally reduce the risks of climate change.

As far as national or sub-national policies to promote mitigation are concerned, it needs to be remembered that reducing emissions of greenhouse gases (GHGs) also carries a large range of co-benefits. These would be in the nature of reduced air pollution at the local level with significant health benefits, higher levels of energy security, greater employment potential and an aggregate increase in agricultural production because the net impacts of climate change on agriculture are expected to be negative.

It also needs to be emphasised that the world is inevitably moving towards a low carbon future as part of which technologies, products and processes which are characterized by low-carbon emissions would have a much greater market potential. It is also inevitable that consumer preference as well as government regulations in response to climate change will move in the same direction. Consequently, it would be in the interest of business to prepare itself in anticipation of such trends.

Overall, business and industry would need to become sustainable in its operations and ensure that they use natural resources with a high level of efficiency. For much too long the services provided by the environment, including clean air, reliable and clean supply of water and benefits from forest resources, have often been undervalued or not paid for at all. Dealing with climate change, therefore, has to be seen as a part of the overall imperative to promote sustainable practices in the corporate sector. In a world where transparency of actions by those in the public eye and information flows are likely to gain in importance, sustainability on the part of the corporate sector would have to become integral to company strategy. Failure to do so would carry a large reputational risk, and directly affect the profitability of business. Similarly, the projected impacts of climate change would require business organisations to adopt appropriate adaptation measures while at the same time becoming a part of global efforts at mitigation of GHG emissions.

Tags: mitigation measures, IPCC, climate change