Weathering the Next Storm: A Closer Look at Business Resilience
Weathering the Next Storm from the Center for Climate and Energy Solutions (C2ES) is a comprehensive overview of the state of climate risk assessment and resilience planning within the business community, and provides business resilience strategies for climate change vulnerabilities. The report identifies various approaches companies are using to address climate risks, examines challenges in managing and reporting those risks, and offers strategies for climate risk management within the private sector.
In 2013, C2ES released Weathering the Storm: Building Business Resilience to Climate Change, which examined how companies listed in the Standard and Poor’s (S&P) Global 100 Index were approaching climate impacts. The report provided a baseline perspective on how major companies were assessing their climate vulnerabilities and whether and how they were working to strengthen their climate resilience. At that time, C2ES found that 90 percent of the S&P 100 companies identified extreme weather and climate change as a current or future business risk. This updated report takes a closer look at how companies are preparing for climate change, and what is preventing them from further addressing climate risks.
Whether in survey responses or individual interviews, a vast majority of very large companies across all industrial sectors identify extreme weather and climate change (such as warmer temperatures, more frequent or severe flooding, or greater water scarcity) as current or future risks to their business. Compared to the 2013 survey, more companies are now assessing their climate-related vulnerabilities. Most companies consider these risks to be relevant within the next five years and that the impacts are “likely,” “very likely,” or “virtually certain.”
C2ES also found that not only are companies acknowledging risk in public disclosures, but also a growing number report they are undertaking or have already conducted some type of vulnerability assessment that incorporates information about future climate conditions. Of the companies interviewed, 77 percent have conducted or are in the process of conducting a vulnerability assessment of some kind.
Specifics are provided on the strategies used by some global companies that are actively planning for climate impacts such as: Pacific Gas and Electric, Royal Dutch Shell, Wal-Mart, Canon Inc., and the Boston Green Ribbon Commission.
Key findings are detailed in the report. Overall C2ES determined that:
- Companies widely acknowledge climate risks, but few manage climate change as a stand-alone risk
- Climate vulnerability assessments have increased
- Water supply and quality are a high priority
- Public reporting on climate risk is increasing, but assessing materiality for financial disclosures remains challenging
- Business continuity and risk management plans remain the most common ways that companies address weather and climate risks, but many plans only include historical risk and not consideration of how climate change will alter those risks
- Methods to assess and manage climate risks vary, and there is no one-size-fits-all approach
- Barriers to building resilience are decreasing but still remain
Appendix A lists the companies in the S&P Global 100 Index (as of 2012); Appendix B provides notes on the research methodology; Appendix C lists the CDP questions asked for this survey.; and Appendix D gives further resources on the topic.
The Center for Climate and Energy Solutions and Bank of America partnered to create this special report on business resilience to climate change. C2ES would like to acknowledge Bank of America for its collaboration and generous financial support.
Publication Date: September 2015
Authors or Affiliated Users:
- Janet Peace
- Katy Maher
- Best practice