A report highlighting risk and opportunity associated with climate change for businesses.

Key Points:

  • The report identifies six climate risks which can be divided into two interconnected groups:
    • Value-chain risks.
      • Physical risks, Price risks, & Product risks.
    • External-stakeholder risks.
      • Ratings risks, Regulation risks, & Reputation risks.
  • Value-chain risks and adaptation strategies:
    • Physical risks – Climate forecasting can highlight high-level risk probabilities by region. Technical standards and capabilities can be put in place.
    • Price risks – To reduce susceptibility to price volatility of raw materials and other commodities companies can go ‘off-grid’ in their power sourcing, by substituting traditional fuel commodities for renewables.
    • Product risks – To keep products viable, companies can adopt a ‘design to sustainability’ approach whereby there is minimal waste and maximal product reuse. Equally, companies can align business interests with climate change adaptation.
  • External-stakeholder risks and adaptation strategies:
    • Ratings risks – To combat a ratings risk, companies can report their efforts to limit any carbon intensive business activities.
    • Regulation risks – To manage regulation risk companies can develop internal strategies that can readily adapt to changing climate regulations enforced by government.
    • Reputation risks – In order to maintain a healthy reputation amongst growing climate scrutiny, companies should be transparent and resolve to fulfil climate and carbon commitments.