3 actions to make your company more resilient to climate change
As we have seen, by piggybacking on established capabilities, organizations can advance their climate adaptation efforts. Taking steps to manage climate risks is just the starting point. Companies can seek opportunities to create value, but they must also be careful not to inadvertently cause problems. Here are three initiatives to consider when addressing climate adaptation.
1. Align adaptation and decarbonization for co-benefits
Integrating a company’s climate adaptation efforts with a net-zero program can have significant benefits. One example is the agroforestry practices embraced by coffee companies like Nespresso and Starbucks. It is an affordable land management system where trees are planted on the same land as crops and livestock grazing land, offering significant ecological and economic benefits. Simply put, agroforestry reduces or removes GHG through increasing carbon storage and mitigates climate change. But there are also adaptive benefits, such as improved water retention, increased soil diversity and land use efficiency.
Similarly, co-benefits can be realized by improving the energy efficiency of buildings, which account for up to 60% of a city's emissions. Energy efficiency retrofits not only support decarbonization and lower running costs, but also increase resilience during extreme heat (through improved insulation) and drought (through improved water efficiency).
When you begin building your adaptation strategy, start by assessing your climate-related vulnerabilities and associated risks, including your infrastructure, operations, and supply chain exposures. Then, as you plan to protect your assets and processes, you can look for solutions that also help reduce emissions.
2. Recognize trade-offs and unintended consequences
“Mainstreaming” adaptation into business decision-making is key. This practice involves addressing complex trade-offs that consider the significant future costs that companies may incur by not factoring climate risk into their current thinking.
For example, agricultural businesses must choose between implementing climate-resilient processes (such as adaptive farming practices) or acquiring more climate-resilient assets (such as farmland in locations less exposed to climate risks). There is a possibility. To arrive at the right answer, you may need to calculate a wide range of financial costs and benefits, such as losses and damages avoided, while making decisions about return on investment.
Companies must also be wary of short-term solutions that have unintended consequences for the organization and its stakeholders.
Consider a food, agriculture, or forest products business where crop yields have decreased due to frequent climate changes in certain locations. In the short term, it may seem wise for the company to exit the field and move elsewhere. But such a move could cause further costs and disruption for businesses and employees, while weakening local economies. Instead, by addressing this problem with more resilient crops, weather data systems, and new seed varieties, the company continues to create value in the same communities and protect the natural ecosystems on which it depends. You may find that you can strengthen it.
3. Leverage technology to focus on both climate risks and opportunities
Certain technologies may be particularly suited to support adaptation strategies. The early warning system mentioned above is one example. At his COP27 in 2022, the United Nations' Early Warning for All initiative announced plans to use EWS to protect all people on Earth from extreme weather events within her five years. A variety of companies, including technology companies, are collaborating with the World Meteorological Organization on this effort.
In fact, weather and climate forecasting startups are already scaling up innovative weather forecasting platforms. By applying artificial intelligence (AI) and machine learning (ML) to satellite and radar data, you can help your organization better prepare for extreme weather events and grow your business.
One weather forecasting tool from climate analytics startup Terrafuse AI uses AI and ML to predict the probability of wildfires in a particular location. Historical fire data, real-time satellite observations, and existing physics simulations inform the model. Insurers can use this tool to set insurance prices based on actual risk and reduce wildfire risk in their portfolios.
Digital twins, another technology solution, provide organizations with data-rich digital versions of real-world systems, domains, objects, or processes. This allows users to gain insight into performance under different conditions and assists in simulating and planning for different situations. As part of a European Commission initiative, Destination Earth, a digital twin of the Earth, will use data from real-time observations and simulations to determine the impacts of extreme weather events related to climate change and develop adaptation and related strategies. We provide information about.
