The question is no longer why the sustainability agenda holds strategic relevance or what action must be taken in order to achieve it, but rather where to begin.
One of the key recommendations for businesses—as they strive for resilience and relevance in an increasingly uncertain landscape of climate change—is to understand the evolution of risks impacting their full value chain. Only then can the way forward be devised.
Executives must take these climate considerations into account when reviewing location, capital allocation, raw materials sourcing, and supply-chain management. This includes integrating on-the-ground knowledge and information from local communities in affected geographies as well as from industry leaders and climate scientists. Gaining insight into these perspectives will help shape mitigation strategies and project associated adaptation costs.
Key innovation areas involve developing tactics to adequately protect people and assets, build resilience, reduce exposure, and ensure that appropriate emergency budgets and securities are in place. These innovation initiatives, as well as investments and operational projects, must be evaluated in terms of their vulnerability to climate hazards, potential risk of exposed assets, and adaptive capabilities.
What is clear is that physical climate risks—from CO2 emissions and natural disasters to water stress and deforestation—are increasing in magnitude and reach. Past events have demonstrated the extensiveness of damage and disparate vulnerabilities impacting geographies and industries across the globe.
Mitigating the immediate global challenges ahead requires a systems-level approach encompassing smart tools and analytics, enhanced internal processes, and good corporate governance.
The infographic below provides a snapshot of the climate vulnerabilities and mitigation measures that businesses must understand in order to proactively adapt and innovate for the future.