Weather resilience, climate preparedness
Introductory presentation for SMEs
Twin responses to climate change
Mitigation:
To reduce your impact ON the climate
The
Business
emissions
impacts
Climate
Change
Adaptation:
To prepare for the impacts OF the climate
Adaptation and Mitigation
Building the business case
• There are three components to
the business case for adaptation.
• Understanding that the climate
is changing and that there will
be consequences for business is
not enough.
(page numbers refer to UKCIP publication ‘A
Changing Climate for Business)
Expected changes in the UK
Changes in annual / seasonal averages
• warmer, drier summers (spring and autumn too)
• milder, wetter winters
• rising sea levels
Changes in extremes
• more very hot days
• more intense downpours of rain
• uncertain changes in storms – possible increase in winter
Web site: ukclimateprojections.defra.gov.uk
Changes: summer mean max temperature
2050s – High emissions
2050s – High emissions
10% probability level:
50% probability level:
very unlikely to be less than
central estimate
2050s – High emissions
90% probability level:
very unlikely to be greater than
Change in summer mean maximum temperature (ºC)
The 2003 heatwave in Europe
Europe:
30,000 deaths
attributed to the heat
wave
Forest fires and crop
damage seriously
impacted economy
Economic losses in
excess of £7.5bn
England (3-14/8/03):
Excess mortality
All ages: 2091(17%)
Hadley Centre
>75:
1781(23%)
Emergency hospital
admissions (>75)
1490 (6%)
Summer 2003 likely to be normal by 2040s,
cool by 2080s
European
summer
temperatures
observations
Medium-High emissions (modelled)
Source: Peter Stott, Hadley Centre
The need for adaptation
Current vulnerability
Models of future climate
m
o
d
e
l
l
e
d
based on UKCP09
58% of UK businesses experienced
some kind of disruption as a result of
extreme weather in 2009
Unavoidable change to 2050
Depends on future emissions beyond
2050
BACLIAT - Business Areas CLimate Impacts Assessment Tool
A generic framework for considering climate impacts on business areas
1.
markets
2.
logistics
3.
process
4.
finance
5.
people
6.
premises
climate change provides both ‘challenge’ and ‘opportunity’
Markets
Changing demand for goods and services
•
tourism: Med. is too hot so visit UK instead
•
food & drink: summer preferences, al fresco
pavement cafes 24/7
•
leisure: demand for parks, gardens, heritage
•
building design: passive cooling, sustainable
construction
•
technology: monitoring, flood protection,
cooling equipment, health products etc
•
global impacts on markets??
Logistics
•
disruption of supply chains arising from:
– transport disruption
– impacts on suppliers
•
just in time systems increase vulnerability
•
disruption to power or water supply
•
for smaller companies, supply chains and
power supply represent a large proportion of
their exposure to the climate risk
Summer 2005: BMW lost hours of production equating to 50 cars as a result
of delays to deliveries following riverine flooding
Process
Impacts on production processes and service
delivery
•
some business processes, equipment, assets
and activities are climate or temp. sensitive
- food preparation and storage
- some industrial processes, such as
waterless printing
- agriculture
- server room
•
weather events can cause damage or disruption
•
climate change could reduce/ increase production efficiencies
•
extreme events will set new performance standards
People
Implications for employees and customers
• poor (better?) working environment:
- external: construction, agriculture
- internal: offices in summer
- more complaints generally
• reputation as employer
- attract and retain high quality staff
Premises
•
impacts of wind, rain, storm, fire and
subsidence on building fabric and structure or
grounds
•
internal environment: less winter heating/
more summer cooling
•
design decisions based on historical climate
data likely to be inadequate
•
retrofitting existing buildings represents a
major challenge
•
sustainable construction needs to link climate
change adaptation and mitigation agendas
Finance
•
insurance issues: increased premiums;
variable premiums; vulnerable locations;
uncertainty
•
investment issues: tests for future proofing
of investment, global impacts on
international investment
•
costs: impact on raw material prices;
retrofitting existing buildings and
equipment could be expensive
Adapt to manage risks / exploit opps
Climate Change
production opportunity
market opportunity
Environmental risk
Operational risk
Potential impacts on:
Potential impacts on:
Markets
Markets
Logistics
Process
Process
Premises
Finance
Logistics
People
Finance
Premises
People
Management response
Financial risk
Reputational risk
Health & safety risk
Strategic risk
Why take a planned approach?
Much adaptation will be possible without long lead times but:
•
the current climate may already present
threats and opportunities
•
difficulties in recognising the climate
change signal
•
lag times between making and
implementing a decision
Max temp,
Summer av. 19611990
Climate vs weather
•
retrofitting often more costly
Therefore, a planned approach that deals with climate change like any
other business risk is more likely to lead to efficient adaptation
How vulnerable is your business?
Factors that increase vulnerability:
•
business requires taking decisions with long-term consequences (decades
or longer) for land-use, built assets or people
•
specific environmental requirements for processes or equipment
•
health and safety issues/ requirements that could be affected by rising
temperatures
•
heavy reliance on utility supply and transport infrastructure
•
maintaining business continuity is of critical strategic importance
•
premises in a high risk location, poorly designed, constructed or
maintained
Mole mapping
•
service developed by Medical Photographic Services
•
aims to help medical professionals and patients to
produce a visual record of skin changes to aid
diagnosis
•
climate change and behaviour change driving
increasing market
Key messages
•
changes in climate intersect with changes in lifestyle and other factors, presenting
opportunities for entrepreneurs to identify and develop new products and services
for health and social needs
•
these types of niche markets can often be a development from an established
service rather than a totally new departure
Baby Warehouse UK Ltd
•
an SME start up selling baby clothes and equipment
•
flooded in 2007
•
installed some simple measures to improve resilience:
online stock management system, raised storage of
stock and equipment and BCM
•
unfortunately could not recover and went out of
business
Key messages
• the effectiveness of their response to this flood event was highly
dependent on several external organisations (insurers, contractors, local
authority, neighbours)
Baby Warehouse UK Ltd experience
Impacts
Consequences
Nine months
without retail
premises
Portacabin and
container costs
Knock-on effects
Loss of trading
Lost till system,
customer records
and paperwork
Difficulties in
meeting
outstanding orders
Damage to stock
and equipment
Repair/
replacement/
container costs
E coli found in
the water
Health and safety
risk
Loss of word of mouth
recommendations
Significant staff time
required to calculate
cost of damage
Massive increase in
buildings insurance,
which landlord may
pass down
Hampshire Cosmetics
•
an sme that manufactures, packages and supplies
toiletries and personal case products to supermarkets
and high street stores
•
‘supplier days’ to build open conversations about
issues, including resilience to climate impacts
•
prioritising BCP – incl. staff section on the company
website to highlight weather events and so minimise
disruption to factory operations
Key messages
•
resilience to climate impacts involves building on relationships beyond the
factory gates, to suppliers around the world and staff facing possible travel
disruption
•
external expertise can provide reassurance on actions to date and a source of
advice on future developments.
Mole mapping
•
service developed by Medical Photographic Services
•
aims to help medical professionals and patients to
produce a visual record of skin changes to aid
diagnosis
•
climate change and behaviour change driving
increasing market
Key messages
•
•
changes in climate intersect with changes in lifestyle and other factors, presenting
opportunities for entrepreneurs to identify and develop new products and services
for health and social needs
these types of niche markets can often be a development from an established
service rather than a totally new departure
Key messages
• we are already committed to some further climate change
• The business case for adaptation can be made in terms of avoiding
unexpected costs, reducing risk and making the most of opportunities
• past weather events can provide insight into vulnerability to weather
and climate
• climate change is a business risk like any other, with adaptation
implemented through existing business processes and taking
advantage of existing decision points
Thank you for listening
www.ukcip.org.uk
Kay Johnstone
Project Officer (Business)
UKCIP
UK Climate Impacts Programme