Business Planning for Climate Change: Identifying Vulnerabilities and Planning for Changes in Water, Temperature, Sea Level, Natural Resources, Health Effects, and Extreme Events

Abstract

The ability to predict the timing and magnitude of future climate and temperature changes at a regional level has become increasingly important for corporate decision making and enterprise risk management. In the short term, companies could face decisions about acquisitions of water-dependent companies and natural resources or might be planning facilities or operations in communities vulnerable to erosion and flooding, changes in water supplies, and increasing health-care costs. In the intermediate term, companies need to assess these vulnerabilities to determine appropriate insurance coverage, plan for new infrastructure, implement preventative health-care programs, or protect natural resources. A technical approach needs to involve predictive tools that can provide bounding estimates at regional scales. The implications of those changes need to be translated to consequences that can affect specific businesses. Corporations must be cognizant of the uncertainties in this forecasting process and for that reason it is essential to link the likelihood of outcomes with the magnitudes of consequences. This article outlines an approach that is gaining traction as a way to address this complex matter.