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Hilda Sanchez-Madrigal • November 10th, 2023.
As the hottest year on record comes to a close, and the United States alone has witnessed 25 confirmed weather and climate disaster events with losses exceeding $1 billion each, it’s clear that climate change is no longer a distant threat on the horizon. It’s an urgent issue that businesses must address today.
Companies are currently confronting a range of climate change-related difficulties. These may mean damage to their facilities, interruptions in their supply chains, shortages of essential raw materials, challenges in finding workers and insurance, as well as regulatory and reputational risks. Quickly, these risks hit businesses’ bottom lines — and they’re present whether leaders take action or not.
The good news is that businesses have a significant opportunity to adapt and build resilience against ongoing and future risks. Climate resilience offers a triple dividend for companies, including avoided losses, new market opportunities, and social and environmental benefits. What’s more, integrating climate resilience technology into your business can accelerate these advantages.
As a climate resilience technology provider, ClimateAi has worked with numerous companies on their climate risk and resilience journeys. We’ve gained insights into what works and what doesn’t. Here, we’ll explore the best approach for companies to get ahead of climate risks and build a customized climate resilience strategy. If you want to learn more about how your organization can build and implement a custom climate resilience strategy, read our new playbook for climate resilience in 2024.
The first step is to monitor your operations closely. Granular climate intelligence on short timeframes, from days to weeks to an entire season ahead, enables companies to plan effectively for relevant events. This near-term focus represents a massive opportunity for immediate value creation, often overlooked but with low effort and high returns.
Climate risk technologies help businesses identify the most climate-sensitive parts of their operations, the acute climate hazards to expect in various locations and their timing, and the potential financial impacts of these hazards (both costs and opportunities).
By providing refined data to back up anecdotal evidence, they offer teams a longer lead time to prepare for hazards. This builds greater confidence and opens wider windows for teams to prepare.
Similar to monitoring near-term climate risks, long-term visibility into climate risks and opportunities is essential for staying ahead of future challenges. Climate resilience technology assesses the exposure of your company’s operations, assets, and supply chains.
It helps identify vulnerable areas within your business and even supports due diligence when considering expansions.
This technology automates data collection and analysis, providing valuable insights at a fraction of the previous time and cost required.
With portfolio-wide climate risk assessment tools, companies can conduct one-click scenario analyses, compare locations, and build-in regulatory disclosures.
Climate resilience technologies track how persistent climate trends will impact long-term operations, supply chain nodes, and future expansion plans. These insights enable companies to prioritize actions based on potential impact size and financial gains or losses. By assessing portfolios for forthcoming climate risks, businesses can develop effective climate resilience action plans.
Decision tools within these technologies help companies understand the impact of specific actions. This guides them in determining not only which adaptation measures to take but even which to prioritize, based on the potential size of the climate impact and financial consequences. These versatile, high-value insights help companies evaluate expected disruptions and bottlenecks. That way, they can optimize their strategies and plan for contingencies
Climate change is a reality that businesses must address now, not down the line. By adopting a three-pronged approach that involves monitoring operations, assessing long-term strategies, and adapting to climate change, companies can not only mitigate risks but also uncover new opportunities and enhance their resilience.
Climate resilience technologies play a pivotal role in this process, offering data-driven insights to inform informed decision-making and strategic planning. Embrace climate resilience today to gain a competitive advantage in a world where climate change is present and pressing.
Interested in finding out more about how specific risks will affect your business, plus the actions to take in response to those risks? Our new e-book provides a deep dive into all things climate risk and how you can identify them and build resilience to the ones material to your business.