Download Climate Change

A Changing Climate for Business
Challenging Climate Change
Event for businesses
Gloucester, 28th June 2007
Gerry Metcalf
Knowledge Transfer Manager
UKCIP
UK Climate Impacts Programme
Who we are
The UK Climate Impacts Programme (UKCIP)
“helps organisations to assess how they might be affected by climate
change, so that they can prepare for its impacts”.
• Set up by UK Government in 1997.
• Funded by DEFRA.
• Based at University of Oxford.
Works through:
• Stakeholder-led research.
• Partnerships.
• Projects.
• Capacity building.
Provides common tools and datasets. All freely available on the web site:
www.ukcip.org.uk
1. UKCIP as a ‘boundary organisation’
facilitates relationships between three groups of key actors
2. UKCIP methods and principles
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helps build adaptive capacity in stakeholder organisations
uses a two-way process of knowledge transfer with stakeholders
uses a common set of tools
provides intelligent access to datasets eg climate scenarios
does not undertake research but sits on steering groups
gives guidance and support for partnerships and studies
assists dissemination of research and project outcomes
develops and refines new tools with stakeholders
all services are provided free of charge to users
3a. Science of climate futures
Climate change is unavoidable
3b. Science of climate futures
Unavoidable climate change is long lasting
Twin responses to global climate change
“There are two methods of curing the mischiefs of faction:
the one by removing its causes, the other by controlling its effects.”
James Madison et al, The Federalist Papers
1. Mitigation of climate change
slow down global warming by reducing greenhouse gas emissions
2. Adaptation to climate change
respond to the predicted impacts of unavoidable climate change
The terms ‘weather related risks’ and ‘climate risks’ may be
more useful when considering impacts and adaptation
Climate Change: A Step Change in Attitude
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IPCC 4th Assessment Report: “…very high confidence that the globally
averaged net effect of human activities since 1750 has been one of
warming..”
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The fact of climate change is now accepted by most UK decision-makers,
beyond the ‘green’ community.
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Nicholas Stern - Stern Review prepared for Treasury by former World Bank
Officer, Head of the Government Economics Service and Adviser to the
Government on the economics of climate change and development.
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Climate Change Bill.
The challenge now is to answer the question …
“What shall we do about it?”
Business is Responding
• Stuart Rose – CEO Marks and Spencers ‘Green’ Plan A, £200m
eco-plan.B&Q promoting energy saving products, such as loft
insulation and energy efficient light bulbs.
• Lee Scott, the CEO of Wal-Mart unveiled an environmental plan,
which includes targets, such as spending $500 million a year on
fuel efficiency and emissions reductions.
• CBI have set up a Climate Change Task Force.
• Last year business leaders from Shell Texaco and Vodafone
lobbied Government for stricter emission controls.
Expected climate changes in the UK
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Trends
• The UK will continue to get warmer.
• Summers will continue to get hotter and drier.
• Winters will continue to get milder and wetter.
• Sea levels will continue to rise.
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Extremes
• Some extremes will become more common other less common.
• More very hot days.
• Fewer very cold days.
• More frequent heavy winter precipitation.
• More frequent winter storms.
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The future can no longer be modelled on the past.
Changes in average temperature in UK
Changes in seasonal average precipitation in UK
Winter
Summer
Summer 2003 ‘Heat wave’ could be normal by 2040s, cool by 2080s
European
summer
temperatures
observations
Medium-High emissions (modelled)
Source: Peter Stott, Hadley Centre
BACLIAT
Business Areas CLimate Impacts Assessment Tool
a generic typology for considering climate impacts on business areas
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markets
2.
logistics
3.
process
4.
finance
5.
people
6.
premises
management responses
climate change provides both ‘challenge’ and ‘opportunity’
Markets:
changing demand for goods and services
tourism: Med. is too hot so visit UK
instead
food & drink: summer preferences
al fresco pavement cafes 24/7
building design: passive cooling,
sustainable construction
environmental technology:
monitoring, and technical fixes
cars etc: cooling as standard
health: new diseases, new
technologies
leisure: demand for parks, gardens,
heritage
other global impacts on markets???
Logistics: vulnerability of
supply chain, utilities, transport, infrastructure
disruption of utilities
• power
• water
• drainage
disruption of transport
• road,
• rail,
• sea
• air
vulnerability of raw
materials production
arising from:
flooding: coastal,
riverine, urban
drought,
subsidence and
heave,
wind and storm
damage,
landslip,
excess
temperatures.
‘just in time’ systems increase vulnerability for manufacturing & retail
Process:
impacts on production processes and service delivery
agriculture: crops
manufacture: temperature
nature conservation: habitats
heritage: buildings and gardens
food and drink: temp. control
waste: health hazards
construction: site conditions
office: summer environment
leisure: impacts on beaches, amenities
‘extreme events’ will set most new performance standards
Finance:
implications for investment, insurance, reputation
ABI policies
increased premiums; variable
premiums; vulnerable locations;
uncertainty
investment issues
tests for future proofing of
investment?
global impacts on international
investment
liabilities in extg. developments
new liabilities may occur; remedial
action unlikely to be cost effective
actions in future developments
higher specification normally cost
effective
People: implications for
workforce, customers and changing lifestyles
new residential locations preferred
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trend to north
retreat from urban locations
changed travel to work patterns
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more pedestrian/cycle journeys
poor working environment
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external: construction, agriculture
internal: offices in summer
more complaint generally
siestas??
reputation as employer
• attract and retain high quality staff
Premises: impacts on
building design, construction, maintenance & facilities management
all projects
• use future not historic climate data
building fabric and structure
• vulnerable to wind, rain, storm,
subsidence
internal environment
• less winter heating required
• more summer cooling required but avoid
air conditioning
existing buildings
• retrofit represents a major challenge
• especially low-energy cooling in housing
sustainable construction
• link CC adaptation and mitigation agendas
very dependent on location too
Management Implications
include climate risk in appropriate policies
marketing; insurance; investment; premises; risk
register;
identify roles and responsibilities
appoint climate change adaptation champion
ensure senior management buy-in and support
pursue impacts on all business areas
treat as a ‘change management’ task
consider management systems such as EMS /
ISO14001
undertake risk analysis;
mainstreaming or separate strategies?
The Business Case for Adaptation
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Unexpected costs:
o Business interruption. Small businesses take on average 50 days to
recover from a flood and 69% have no business continuity plan.
o Loss of productivity, such as due to thermal discomfort.
o Cost of repairing or replacing following damage from weather.
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Potential new revenues:
o Changing customer preferences and markets.
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Future regulations.
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Reputation:
o With customers – judged on ability to cope in challenging situations.
o With employees – attract and retain happy productive staff.
Planning for Climate Change
• Why is planning is better than responding?
o More likely to obtain first-mover advantage.
o There is often a lag time between detecting the impact and making a
decision and implementing it
o Most impacts are due to extreme events so don’t register until it is too
late.
• Planning for climate change involves going through a process of
understanding the risks, how resilient or vulnerable your business is
and evaluating different adaptation measures in the context of other
business priorities.
A Risk Based Approach
• The combination of the probability and
consequence of a hazard is generally
termed ‘risk’ and can be analysed using
risk assessment techniques (the same
approaches can also be applied to
opportunities).
• Draw up a rank order listing of the
significant threats and opportunities to
your business. The order will depend
on the priorities and drivers specific to
your business.
How Vulnerable is Your Business?
Factors that increase vulnerability:
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Business requires taking decisions with long-term consequences (decades
or longer) for land-use, built assets or people.
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Specific environmental requirements for processes or equipment.
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Health and safety issues/ requirements that could be affected by rising
temperatures.
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Heavy reliance on utility supply and transport infrastructure.
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Maintaining business continuity is of critical strategic importance.
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Premises in a high risk location, poorly designed, constructed or
maintained.
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If you are already adversely affected by the weather.
Non-Climate Issues and Other Priorities
• the climate is not the only thing that is changing and is unlikely to be
your most important driver.
• important to consider non-climate risks in order to identify any
interactions between climate and non-climate risks and ensure that
adaptation measures taken are reasonable and proportional.
• consider adaptation to climate change in the context of other
business priorities, such as any existing plans you might have to
grow, diversify or break into new markets.
Adaptation Examples
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Adapting to water shortages e.g. grey-water recycling, rainwater
harvesting, reservoir.
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Casella Cel Ltd moved their server room to the second floor because of the
flood risk and insurance requirements.
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Northern Ireland Electricity have strengthened their infrastructure to be
better able to deal with floods and storms.
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National Trust has provided its gardeners with improved outdoor clothing
and training in gardening in the new climate.
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A farm in Devon used frozen lollies stuffed with carrots to help their pigs
cope with the heat in 2006.
Key Messages
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Future weather can no longer be modelled on the past.
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Many business are not adapted to current weather variability let alone
prepared for the impacts of climate change.
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Climate change will have direct physical impacts as well as changing the
business environment.
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There are opportunities as well as threats, both in the form of positive
impacts and the potential advantage of being the first to adapt to a
negative impact.
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Planning for climate change is better than responding.
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Climate change should be seen as a business risk, integrated with other
business priorities and fully incorporated into forward planning.
www.ukcip.org.uk
[email protected]