How Climate Resilient Is Your Company?
This pressing question is increasingly being asked of management and boards. But what is climate resilience, and why is it so important?
Companies have traditionally thought about climate change and environmental sustainability as reputational risks best managed through corporate social responsibility programs. In recent years, however, many companies have been caught unprepared as they begin to feel the effects of a changing climate and the transition to a lower-carbon economy. Direct physical risks such as hurricanes, droughts and other extreme weather events are happening more frequently, and with greater severity. Further, policy-makers are enacting new regulations and policies in response to climate change that will impact the operations of many. And finally, investors, customers and supply chain partners are increasingly seeking out companies that will be able to thrive in the evolving environment.
Inside the boardrooms and C-suites of companies across all sectors, the discussion has shifted from the question of what impact their business could have on the environment, to how climate change will impact their business.
Climate resilience can be defined as the capacity not only to survive, but also to adapt and thrive in the face of climate change and its direct and indirect impacts. There are five major forces driving climate resilience to the top of executives’ priority lists and this report outlines three practical ways that companies can begin to assess their climate resilience.
Exhibit 1: Five pressures for greater climate resilience