IEMA publishes new guidance on developing the business case for climate change adaptation
IEMA members have contributed to new practitioner guidance on building the business case for climate change adaptation. Working with support from Defra and the climate ready team at the Environment Agency (see below), the Institute has developed and launched the advice with environment and sustainability professionals in mind.
Here, Nick Blyth, policy and practice lead at IEMA, gives an overview of the project and the content of the new guide.
The business case
Corporate approaches to the environment are changing, with a growing appreciation of business critical “dependencies”.
The UK climate change risk assessment, which was published by the government in January 2012, states: “The climate is fundamental to almost all aspects of our daily lives: it directly affects our economy, ecosystems, food, water, health, homes, infrastructure, trade and leisure.”
Further to this, the CBI acknowledges: “Tackling climate change means using energy more efficiently, future-proofing businesses against climate threats and moving business operations towards carbon neutrality.”
This is the backdrop underpinning the development of the new IEMA guide.
The project started in January, starting with two member workshops to understand and capture crucial points from practitioners. A webinar followed, presenting and discussing early findings.
Finally, a series of telephone interviews explored the emerging issues in more detail. Nearly 300 IEMA members contributed via the workshops, webinar, interviews or as peer reviewers.
Thanks to their involvement a more complete understanding was developed of the key challenges facing environment practitioners, the importance of their role and the necessary ingredients for progressing an effective business case for climate change adaptation.
Informed by IEMA members’ experience, the guide aims to help practitioners to understand, scope out and build support for effective business cases. In many instances, the business case will be challenging to develop, especially in determining longer-term impacts and in considering uncertainties. However, progress is being achieved and common learning points have been identified. These learning points include:
- Understand your business – an essential starting point.
- Engage widely across your business – build awareness, seek interest and share the challenge and use business-relevant language.
- Don’t reinvent the wheel – use any existing internal decision-making opportunities that are in place.
- “Piggy back” – use opportunities presented by other projects and developments in the organisation to build the business case.
- Use recent and future weather impacts as an early opportunity for business response – this can also help to build awareness for longer-term climate change adaptation.
- Alongside risks consider opportunities and dependencies – these may include any competitive advantage from increased resilience to extreme weather and climate change.
- Look for “early mover” opportunities and do not underestimate the value of making an early start – for example, through trial schemes or adaptation linked to wider initiatives.
The new guidance works through these main phases. It also provides information on business relevant climate risks and dependencies; practitioner roles and profiles; business-case principles and learning points; and references to further and forthcoming guidance.
Members taking part in the development of the guide also indicated that climate change adaptation is starting to feature across multiple business processes – from risk registers and organisational management systems, supply chains and procurement, through to sales, service delivery and product design.
Landmark business cases are relatively rare, but incremental progress is being made. This “building” approach is achieving progress, raising awareness and starting to bring adaptation into mainstream business considerations, including the more challenging area of long-term business decisions.
Members are instrumental in helping organisations to address climate change adaptation through existing processes.
Jonathan Foot, chief environment officer at EDF Energy, agrees that environment and sustainability officers can make a critical contribution through corporate risk registers.
He says: “In many situations a corporate approach to risk management is well established and provides the opportunity for commencing business case considerations at a strategic level, and especially when further supported by a corporate sustainability vision.
“Not all businesses will have an established risk process. However, where these exist they provide a logical opportunity for feeding in new thinking around short-term vulnerabilities to variable weather and longer-term business concerns relative to official climate projections.”
The business case can also be directly advanced through an environment management system. Carol Wakelin, environment coordinator for the Queensgate shopping centre Peterborough, said: “We have addressed weather and climate impacts, such as flood risk, through our ISO 14001 certified management system.”
In some cases the environment team can achieve progress through trial schemes or strategic reviews. Noble Foods, a supplier of eggs and egg-based products to UK supermarkets, is working to ensure its business is addressing climate change.
Company environment officer Deborah Carlin said: “Climate change impacts are being reviewed across farm sites and operations, and a number of practical measures are being tested, from simple water-efficiency measures through to onsite renewable energy generation.”
Another important consideration concerns comparative advantage to competitors – that is, viewing action against climate risks as an opportunity for increased resilience and business advantage.
One medium-sized company, for example, decided to operate and manage its own delivery logistics to better ensure continuity of service to customers. The company now holds sufficient stock at all times for its valued clients to ensure better continuity of supply. It sees this approach as providing resilience and as an advantage over its competitors, many of which have adopted outsourced just-in-time logistical systems.
An alternative approach to addressing supply-chain concerns is to secure continuity by diversifying suppliers. A further example revealed during the project, addressed such risks by building a localised supply chain – where suppliers held stock and guaranteed delivery.
These real-life examples help clarify how resilience and adaptive action might lead to a business advantage. Dr Paul Pritchard, partner at Sandwalk, agrees: “The idea of recognising adaptation as a sensible business response to an environmental dependency is one that could have considerable potential.
“Such an approach aligns with recent developments in corporate risk management where an organisation’s dependency on its supply chain or its IT service provider, for example, is much more prominent. It also allows clustering of concerns around a theme in a way that can be consistent with the many potential impacts of climate change.”
Similarly, Toby Robins, sustainable development director at Wiles Greenworld, says: “The threat posed by the increasing frequency of extreme weather events is one of the most significant drivers to build resilience. Effective supply chains and secure logistics are integral to our approach to business sustainability.”
IEMA’s new guidance is available on the policy hub at iema.net/climate-change-energy. Further information and links on climate change adaptation will be added to the hub during 2013, including information on Defra’s forthcoming national adaptation programme.
Climate ready support service
The Environment Agency has a new role in providing advice and support to other organisations on adapting to a changing climate. The service is based on customer needs and feedback, and aims to help organisations build their own capacity to adapt, incorporating climate risk management into their business decision making.
The climate ready support service provides direct support and online information. Through the service, the agency is working with partners to provide tailored tools and guidance, and training to enable organisations to understand and respond to the climate change challenges facing them.
The service has developed guidance to help UK business understand and manage domestic and international climate change risks to their supply chains. The agency is now looking for partners to test its guidance. In addition, the regulator is undertaking work to identify the costs and benefits of adaptation to further assist businesses in building a business case for change.