Deloitte climate expert says business must wake up to extreme weather threats
By Ed King
Businesses that are not planning for the long-term effects of climate change are risking their future viability, according to a leading climate change consultant.
Speaking to RTCC, Nick Main, Chief Sustainability officer at Deloitte says companies who fail to take into account climate risk now could run into trouble in a matter of decades.
He called for business leaders to break out of a short-term planning mould and develop a vision that will see their companies prosper in 5-10,000 years.
Main said: “How long do you want your company to exist for – do you have a five year horizon or a twenty year horizon? If your business was around since the end of the last century, do you want it to be around until the end of the next century?”
“If that is the case, you need to have some element of your planning, particularly when you’re buying assets that may last 10-20 years – that at least thinks as long as that. Because just take it down to a basic accounting level – how do you know you are depreciating them appropriately?
“You need to have a longer-term vision of an organisation…and the whole sustainability debate is about the long term. What’s your view of the long-term? If it’s 5-10 years…I think that’s pretty miserable really – I think you should have 5,000 years or 10,000 years.”
An IPCC Extreme Weather report published in 2011 predicted heavier rainfall, stronger storms and intensifying droughts in the 21st Century as climate change impacted across the world.
Both developed and developing countries are expected to be affected, with the potential for billions to be wiped off national economies.
A week before the IPCC released that report, the International Energy Agency (IEA) said the world had just five years to implement the emissions-cutting policies needed to prevent catastrophic climate change.
How can business prepare?
A survey published by the UK’s Department of Environment, Food and Rural Affairs (DEFRA) earlier this week found that only 15 of the FTSE 100 89 companies who responded have specific climate adaptation plans.
The study did reveal that 71 of the 89 were aware of risks they could face as a result of climate change, but said few businesses had quantified the financial implications of extreme weather conditions, and appeared more focused on mitigation rather than adaptation.
Main argues that even companies that may think they won’t be affected by climate change will have to reconsider if they conduct a full review of the risks.
“You might think – what would I have to think about in terms of climate change running an office in London….? Well – we’re probably a bit above the Thames here – but not much. We probably rely on the tube system, which is below the Thames,” he said.
“So if you started to get more and significant flooding – the Thames flood barrier can only deal I think with 60 tidal surges a year, and it operates significantly above its original design expectations – so maybe we have to think about what would happen in a flood in London? How would we deal with it from a business perspective?
“When you start doing business resilience, which might be a 10-20 year plan, you need to start thinking about those things now.”
Are recessions good for sustainability?
The Deloitte climate specialist also suggests that despite the economic downturn there is a good news story to be told when it comes to business and sustainability.
While many companies have scaled back their CSR projects and concentrated on their core product – often at the expense of ‘greener’ initiatives – the recession has also forced business to streamline supply lines, reduce energy consumption and improve the efficiency of their transport fleets – thus cutting carbon emissions.
“This is a story about how you do more for less. How do you reduce costs in the system – that’s a good business story. There are new solutions for new markets and there is an innovations story, and that’s a good story in terms of competitive advantage – and there’s also a risk-avoidance story,” he said.
“If you look at it – sure – the economic crisis took a lot of spend out of a lot of organisations, but if you look at this as a percentage I don’t think the sustainability spend has gone down, and I don’t think the focus has gone down.
“What in some ways has been impressive is that it has continued on, and has continued on as one of the themes that I think in itself is sustaining.”
RELATED AUDIO: How sustainability agenda has survived recession