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Introduction
Several the predicted impacts of climate change have the potential to impact the operations of organisations. This can be through changing markets, impacts on logistics (disruption to supply chains, utilities, and transport), impacts to organisation premises (impact to building from temperature and weather events such as flooding), impacts to your employees and customers in extreme weather, impacts to industrial processes and loss of finances through disruption, insurance, and costs.
It is therefore important to understand how these vulnerabilities will impact your operations and look for ways to mitigate them.
Key terms in relation to climate risk and adaptation:
Adaptation – Adjustment in natural or human systems (including organisations) in response to current or expected climate change to moderate harm or exploits beneficial opportunities
Resilience – Ability of a system and its component parts to anticipate, absorb and accommodate or recover from the effects of a hazardous event in a timely and efficient manner, including through ensuring the preservation, restoration or improvement of its essential basic structure or functions
Dependency – ‘Environmental dependency’ is a term which can be used to describe any organisation operations and activities which are significantly dependant on the state of the environment and the services it is providing (including weather and climate).
Identifying your vulnerabilities
To identify your vulnerabilities, you must start by identifying where your dependencies lie, the possible climate related impacts to key stakeholders and then use these to map how these may make your organisation operations vulnerable. This means identifying how the impacts of climate change, both directly and indirectly, may impact each step of your organisation model.
Doing so involves looking at:
How the transformation or disruption of current processes and technologies may have to change
Understanding how impacts may lead to resources constraints
How the impact of extreme weather can impact the operations of your organisation
How implementation of environmental policy and regulation may influence your organisations actions
For example, when assessing the risk related to your supply chain the following steps can help identify potential vulnerabilities:
Create an inventory of all your suppliers
Assess how vulnerable each of these suppliers is to the impacts of climate change
Assess how critical each suppler is to the operation of your organisation
Create a comprehensive list of your organisation's operations
Assess the vulnerabilities of these operations to the impacts of climate change
Assess the criticalness of each of these operations (can your organisation still function without this operation?)
Access the transfer of vulnerability from your suppliers on to your organisation operations
Access the resulting vulnerability of your operations
Addressing your vulnerabilities
Having identified how your organisation is vulnerable to climate change you then need to look at how you can address these vulnerabilities.
To start with, think about how your organisation normally adapts to change:
What has driven previous changes in your organisation?
What enabled or made these changes easier?
Has climate or weather affected the organisation in the past? If so, how did you adapt to this?
How does your organization deal with other risks?
How is your organization interconnected with others, and do you know what is driving change in their sector/organization?
Asking these questions can help you to understand how your organisation adapts to change so that you can implement climate change adaptation into this. You can then use the vulnerability mapping you have done to try and reduce your vulnerabilities.
For example, having identified vulnerabilities within you supply chain you then need to establish a contingency plan that can either prevent these vulnerabilities in the first place, such as by changing to a local supplier, or allow you to have a reduced impact from vulnerabilities for a specific supplier, such as by getting a product from several suppliers.
It is vital that you continuously review any vulnerabilities and the contingency plan to improve it where possible.
Integrating climate adaption into decision making
To ensure that you continue to reduce your vulnerabilities, as well as reduce your environmental impact, it is vital that climate adaptation is integrated into all decision making. This means that when making any business decisions the environmental impacts of that action, as well its potential vulnerabilities, are considered.
This can be done by developing a decision-making model or procedure that ensures decisions cannot be made without assessing the environmental impacts.
Useful links:
This guide outlines the importance of understanding you climate vulnerabilities and highlights how to start mapping these (pg12).
While the handbook sets out how businesses can work towards reaching net-zero in line with the 1.5°c global warming target, pillar 3 contains some useful information on integrating climate issues into your business strategy.
This toolkit is designed to help embed and sustain environmental action within your business.