Even if we stopped emitting carbon today, the changes we’re already experiencing are irreversible for the next 100 years. This includes biodiversity loss, new weather patterns, more extreme weather, wildfires, sea-level rise, flooding, and climate migration as people move away from coastal regions and parts of the earth that are just no longer inhabitable. Adapting to this new reality will mean massive investment in forest management and wildfire resistance, drought mitigation, and new public works projects. The US and the EU will be spending approximately $60 billion on climate adaptation collectively. It’s a good start but not enough, and developing nations will need even more — at least $300 billion, according to UN Deputy Secretary-General Amina Mohammed.

Businesses will also need to adapt. It’s not just assessing climate risk and reporting the financial implications to the SEC; it’s about adapting your organization’s market and business strategy, as well as the specifics of its operational strategy. Here are just some of the considerations and places for investment:

  • Facilities. Given changing and extreme weather, does your organization need to rethink its physical locations? Can facilities be moved, or can they be redesigned and/or fortified to deal with flooding, extreme weather, higher temperatures, and energy outages? Can investment be made in backup generators, air conditioning/insulation, local and renewable energy and storage, elevated buildings, and nature-based solutions?
  • Critical assets. To what extent are our physical assets (e.g., cars, fleets, planes, etc.) and infrastructure (telco lines, data centers, inventory, parts, supplies, manufacturing equipment, etc.) more at risk to environmental threats but also likely to have a significant reduction in the useful life of assets? Can we move the assets, eliminate concentration risk, plan for more frequent replacement, or invest in new products designed/adapted for the current environment?
  • Supply chain. How dependent are we on the ability to source animal and agriculture products (e.g., grapes, coffee beans, cocoa beans, other key crops, etc., that are affected by climate change)? How can we mitigate these risks with vertical farming, precision farming, genetically modified crops, moving crops to other regions, or using alternative ingredients?
  • Third-party risk. Of our strategic partners and suppliers, what is their risk exposure to climate change? Do we need more redundancy and diversification of our critical partners?
  • Customers. How are our customers affected by climate change? Do we expect significant climate migration? What are our customers’ changing preferences, attitudes, behaviors, and changes to their financial status? Do we need to move our operations to adapt climate migrations? Offer new products and services to customers that help them adapt?
  • Employees. Will climate migration affect your ability to recruit and retain employees in key geographies? Will you have to prepare for a reduction in working hours and even the ability to work outside? How will employees be able to commute to work? Does this mean moving operations, offering more medical and mental health services, evacuation services, committing to anywhere work, and increasing automation and robotics?
  • Critical infrastructure and utilities. Could more extreme weather lead to more frequent energy blackouts, lack of clean water, lack of healthcare services, lack of communication, etc.? Does your organization need to develop capabilities to deliver essential services to employees and customers normally delivered by local government?
  • Transportation. In the future, can we expect roads to be frequently impassable from flooding and other extreme weather? How does this impact operations, and what are the alternatives? Do we reevaluate locations most at risk?
  • Business continuity maturity and crisis management. How prepared are we to respond to frequent disruption and crises? Do we have redundant communications via satellite in case terrestrial communication is unavailable? Are we in position to feel confident that we can locate and ensure the safety of employees, partners, and customers? How confident are we that the business can continue to operate?

Adaptation will require significant investment on the parts of governments and businesses, but there is also the opportunity to be the provider of the services and products that make businesses, cities, and towns more resilient — don’t miss out on this opportunity by just focusing on the opportunities related to sustainability.

Clients can read more about the green market revolution here. If you aren’t yet a client, you can get complementary resources on the sustainability solutions hub.