Organisations should invest in assessing climate vulnerability

28 Apr 2010
Organisations that apply a "wait and see" approach to thinking about the impacts of climate change on their business might reach a point where it is too late to adapt, according to a University of Queensland (UQ) Business School expert. PhD researcher Martina Linnenluecke examined the relationship between business activities and expected changes in climate and weather conditions due to climate change in her thesis. Ms Linnenluecke said those organisations and sectors that had large-scale infrastructure in disaster-prone regions or were reliant on stable climatic conditions should invest resources in assessing their own vulnerability to climate change and extreme weather events, and looking at what flow-on effects might exist. "There's a general awareness that climate change has emerged as a strategic issue but overall, organisations haven't yet built up the capability to systematically consider the organisational implications of climate change and changes in trends of weather extremes," she said. "What organisations can do initially is to use the expertise and information that is already out there to try to identify hot spots and regions likely to be affected by climate change and to see if these regions in any way coincide with any organisational activity." Ms Linnenluecke said an organisation's vulnerabilities might also extend to vulnerabilities in the organisation's supplier base or value chain. She said business needed to start thinking beyond climate change adaptation towards building up resilience. "The issue with adaptation is it usually takes place in response to something that is known or expected — we adapt when we know it makes sense to adapt," the UQ Business School researcher said. "Climate change has the potential to affect organisations in ways that are unseen." Ms Linnenluecke recommends organisations use a resilience framework to thinking about their exposure and response to climate change and changes in the number and severity of weather extremes. "Organisations should think about their ability to resist certain impacts and to recover from others, but also to ask 'what is the amount of change we are able to withstand?'" she said. "After an event, there's a lot of pressure to quickly restore the status quo, to get the power on again for example, to get things happening, but this is not necessarily the best decision long-term. "For example, what are the implications of an energy company putting power lines back in the exact same location after an event? That might create more vulnerability if a similar event occurs there again, however moving the power lines or putting them underground might be a longer-term solution." Ms Linnenluecke said a major challenge to building organisational resilience was a trade off between slack resources and efficiency. "Slack resources are excess resources and probably not needed on an operational, day-to-day basis, but a certain degree of slack can provide organisations with the flexibility to respond to any changes." Ms Linnenluecke's dissertation research was supervised by Professor Andrew Griffiths, who is one of Australia's leading experts in sustainable business strategy. She and Professor Griffiths will have their paper "Beyond Adaptation: Resilience for Business in Light of Climate Change and Weather Extremes" in a forthcoming edition of international journal Business & Society.