'Other businesses who take a ‘wait-and-see’ approach do so at their own peril'

Network for Business Sustainability -  Oct 13, 2009

According to a new study from the Network for Business Sustainability, insurers are the most advanced organizations in adapting to climate change.

The report – a thorough review of over 200 studies since 1997 on how businesses adapt to climate change – includes a sector-by-sector analysis of the risks and opportunities climate change brings and tools to help businesses adapt.

“While climate risks and opportunities are often sector-specific, some sectors are emerging as leaders and have done so through collaboration,” said Tima Bansal, Professor at the Richard Ivey School of Business and Executive Director at the Network. “Lagging sectors can learn from these leaders to innovate new ideas.”

What sets the leading insurers apart are their institutional networks, which promote collaboration. For example, one insurance company in the study assembled insurers, academics, governments and NGOs to find solutions to climate change risks.

While there is a growing consensus that adaptation is a central strategy in dealing with the impacts of climate change, the report found most businesses haven’t yet incorporated substantial measures and many are focused on mitigating instead of adapting.

“Scientists continue to be shocked by how fast the climate is changing, and we know emissions will ultimately be regulated,” said Bansal. “The ‘wait and see’ approach for businesses is no longer an option.”

The study, commissioned by the Network – a collaboration of academics, consultants, NGOs and corporations – was conducted by David Nitkin and a team of two university-based researchers at EthicScan Canada Ltd.

“In the agriculture sector, we found that climate change is part of a much broader risk management framework which takes weather variability into account,” said Nitkin. “In the energy sector, we found all producers will face some risk to infrastructure, in additional to high regulatory, physical and reputational risks.”

Other highlights from the study include identifying the strategic timing of climate change planning, aligning with overall company policies, and assuring an ongoing commitment within the organization.

Click here for the reports and further details