Adapting to Climate Change: A Business Approach
From the Center for Climate and Energy Solutions (C2ES, formerly the Pew Center on Global Climate Change), this report outlines a sensible business approach to analyzing and adapting to the physical risks of climate change. The paper 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.
Section I of this paper offers context on the broader risks and opportunities presented by climate change. Sections II and III summarize the case for business action to adapt to the physical effects of climate change, and the pathways by which climate can affect business.
Table 1 offers information about the potential risks resulting from physical climate impacts on selected sectors. Examples of businesses which have actively taken steps to adapt to climate change (e.g. Insurance, Electric Utilities) are provided, along with information about the variety of possible adaptation actions.
The paper includes a climate risk screening framework for identifying the circumstances in which a company may be at risk from climate change. Assessing susceptibility to climate change requires that a company examine risks across its operations, value chain, broader commercial environment, and infrastructure dependencies. Businesses must evaluate the magnitude of what is at risk and determine what responses are necessary.
Three case studies of companies that have begun to look at climate risks are provided. These companies are Entergy (an electric power generator and distributor), The Travelers Companies (an insurance provider) and Rio Tinto (a mining company). These case studies highlight the very different circumstances that motivated each company, and how the companies may be moving towards different conclusions about the appropriate response to climate change.
Publication Date: April 2008
Authors or Affiliated Users:
- Frances G. Sussman
- J. Randall Freed
- Case study