Relatively few Canadian businesses have adopted a structured and explicit approach to incorporating climate change risk management and adaptation into their regular business activities, notes a recent study by the National Round Table on the Environment and the Economy (NRT).
The federal government established the NRT in 1988 to play an advisory role on sustainable development issues. A casualty of Ottawa’s 2012 federal budget, the round table will be eliminated as of Mar. 31, 2013. Its recent report, Facing the Elements: Building Business Resilience in a Changing Climate, is the last of a series of reviews in the NRT’s Climate Prosperity series.
“Businesses of all sizes, in all regions, and sectors will face both direct and indirect impacts to their business from climate change. And, since we live in a global economy characterized by lean inventories, long supply chains and just-in-time delivery, impacts on one business have cascading consequences on others,” notes the report.
But even though businesses are aware of the potential for more frequent and severe weather events to damage existing infrastructure, facilities and capital equipment, they are not necessarily regarded as material risks, the report adds. As well, businesses don’t feel the need to radically alter existing organizational structures to adapt to the risks.
“Public companies tend to provide much more information on how a changing climate could affect them in voluntary reports than in their mandatory securities filings,” the report observes. “In addition, we’ve seen cases in the pipelines, chemicals and fertilizers, and utilities sectors of businesses disclosing material risks posed by severe weather, water availability and quality, and seasonality (a source of operational risk), but not in the context of a changing climate.”
The report lists four key goals for businesses acting to adapt to climate change:
• tailor climate change information to address business adaptation needs;
• augment investor information through improved corporate disclosure;
• enhance the resilience of critical infrastructure, in particular electrical power, transportation and Internet and cellular services; and
• start preparing now for future policy innovation.
The full report can be found at: