The weather and extreme weather events have already significantly affected economic activity in the UK. As the climate changes, all sectors of UK business will be faced with new threats and opportunities that need to be addressed. This will ensure business continuity and sustainable development. Climate projections show that in the future the UK will have to deal with an increased risk of extreme rainfall and floods, increased frequency of storms and high winds as well as heat waves and drought.
What is climate change mitigation and adaptation?
Before we continue, let’s define some of the frequently used terms:
‘Climate change’ is a large-scale, long-term shift in the planet's weather patterns or average temperatures. The change we’ve experienced since the industrial revolution is a direct result of the increase in greenhouse gases released into the atmosphere by human related activities.
‘Climate change mitigation’ refers to efforts to reduce or prevent the emission of greenhouse gases. Mitigation can mean using new technologies and renewable energies, making older equipment more energy efficient, or changing management practices or employee behaviour.
‘Climate change adaptation’ involves changing the way we do things to prepare for the potential effects of climate change. This means our business will be better protected against extreme weather events such as flooding, severe storms or increased temperatures. It also means we’ll be better prepared for developing new business opportunities such as new products or new markets.
‘Business resilience’ is the ability an organisation has to quickly adapt to disruptions while maintaining continuous business operations, safeguarding people and assets, whilst maintaining the provision of goods or services to the marketplace.
‘Climate change action plan’ is a plan that identifies the potential business impacts of climate change, now and in the future, assesses the business risk and outlines actions that will build business resilience.
What does it mean to business?
Almost 60% of small businesses don’t have a plan or strategy to cope with severe weather events despite two thirds of them having been affected by flooding, droughts or snow in the last three years, reports the Federation of Small Businesses. The Environment Agency reports that 54% of businesses faced disruption, due to extreme weather in 2012, and that businesses affected by the floods of 2007 took on average 26 weeks to return to full operating capacity.
Businesses are vulnerable to extreme weather events in a variety of ways including the physical impact on the owned premises and assets, disruption in the supply chains, impacts on employees’ wellbeing and the potential shift in product demand as a result of a changed climate.
What can you do?
When and how the climate will change is still under great scrutiny by the world’s scientific community, but one thing is agreed – it will change both locally and globally. Therefore, businesses should start to plan for the predicted changes and prepare a climate change action plan.
The climate change action plan is divided into 3 sections:
- The identification of the potential impacts of climate change.
- Risk assessment of the potential impacts and prioritisation of those risks.
- An action plan outlining opportunities to build business resilience now and in the future.
1. Identify the potential impacts of climate change
The action plan starts with a review of what would happen to the business in the instance of flooding, drought, heavy rain, extreme temperatures and strong winds. If you firstly break the business down into manageable areas and then ask a series of ‘what if?’ questions.
Business area to consider:
- Operations – production processes, offices, site access, storage.
- Markets & finance – reputation, change in demand for product, social trends, insurance, and investment.
- Logistics – raw material availability and price, supply chain, transport links, access in and out of the site and utilities.
- People – employees, customers and local community.
- Assets – premises, vehicles, plant and external areas.
‘What if?’ questions
For each of the business areas you then need to ask yourself a series of ‘what if?’ questions that challenge what the business would do in the event of flooding, drought, heavy rain, extreme temperatures and strong winds.
What if flood water entered the premises and affected production? Damaged stored goods? Caused a power cut? Prevented access for employees? Etc.
What if strong winds blew the roof off the premises? Caused a tree to block the entrance to the warehouse? Etc.
What if stormy weather prevented ships to dock in the UK which contained essential raw materials? How would customers respond to a late or failed delivery? How would this impact your reputation in the marketplace? Etc.
2. Risk assessment of the potential impacts and prioritisation of those risks
Step 1 will result in a long list of potential impacts to the business for a number of weather scenarios. The next step is to prioritise them according the risk they present to the business. There are a number of risk assessment methods and it’s likely you could use an existing risk assessment method and criteria. The important thing to assess is the likelihood of something occurring and the magnitude or consequence to the business if it was to occur. The results should then place the impacts in order of importance.
The following criteria could be used to determine risk:
- Have adaptation measures already been implemented?
- Has the impact already been experienced?
- Is there a critical threshold?
- Does the business area affected involve making decisions with long term consequences?
- How would your business objectives and priorities be affected by the impact? (breach permit or legislation, fail delivery, cost increase, health & wellbeing impacts)
- Are there any business or industry trends that could make you more or less vulnerable in the future?
Priority can then be established by multiplying the ‘likelihood’ rating with the ‘magnitude’ rating. Risks with the highest scores have the highest priority and will be addressed first in the climate change action plan. A priority with a score 1-3 is considered low, 4-6 medium and 7-9 high.
3. Prepare an action plan outlining opportunities to build business resilience now and in the future.
Once you’ve established the areas of the business at the greatest risk, you can start to put together an action plan that will detail practical actions that can be taken to build business resilience. It’s advisable to have an ideas session with members from all areas of the business to help generate actions and to consider the following resilience options:
Resistance – consider physical measure that will prevent damage.
Reliability – consider changes to processes (physical or administrative) that will allow them to operate under a range of conditions.
Recovery – provisions or systems that will enable a fast response to and recovery from disruptive events.
Be prepared! Review the risks to your business and start to build resilience – don’t be caught out!
- Keeping the Country Running: Natural Hazards and Infrastructure. A Guide to improving the resilience of critical infrastructure and essential services. Available from: https://www.gov.uk/government/publications/keeping-the-country-running-natural-hazards-and-infrastructure
- The Committee on Climate Change http://www.theccc.org.uk/
- UK Climate Projections http://ukclimateprojections.metoffice.gov.uk/
- Met Office – Climate: observation, projections and impacts http://www.metoffice.gov.uk/climate-guide/science/uk/obs-projections-impacts