23 April 2013 — Few Australian businesses are considering climate change impacts, research has found according to joint research by Future Ready, Climate Planning and DLA Piper for the National Climate Change Adaptation Research Facility.
The research found that although climate adaptation should be considered a key strategic issue for the business community very few were giving much weight to the issue.
Project leader and co-lead author Gareth Johnston from Future Ready said Australian governments expected the private sector to adapt, “yet little or no incentives exist to promote this behaviour”.
“Some foreign owned transnationals with good supply chain risk management are already acting, but current market practices cannot be expected to meet greater societal adaptation needs let alone address companies’ climate change risks,” he said.
“We’ve found that the best corporate response to climate change impacts and adaptation is to not see it through a CSR or sustainability lens but it is best treated as a key strategic issue.
“Climate adaptation is therefore not a green issue as many believe but about the bottom line.”
The project’s findings, from a review of key sectors, showed that very little was publicly known about climate change risks or opportunities. Further adaptation research is required in some areas to help guide, shape and monitor adaptation for the private sector.
Climate Planning climate adaptation specialist Donovan Burton said without understanding the risks for each sector, companies may be exposed to the indirect impacts from another organisation’s adaptation action.
For example what happens if insurers pull out of high risk locations? I imagine the ‘hot potato’ of residential climate property risk will rest with the lenders, and the mum and dad investors.”
The study also highlighted the legal imperative for adaptation.
DLA Piper special counsel Mark Baker-Jones said one of the key legal findings from the research was that corporations needed to identify their climate-related legal risk.
Once that was quantified, they needed to ensure “that such risk forms an integral part of their environmental risk management process – and that process is developed and adopted as part of the corporation’s overall risk-management strategy”.