What sets apart the leaders of resilient businesses?
They do at least these two things: Embrace the changing reality and take advantage of a landscape fraught with new risks.
This article is adapted from the book "Adapting to Change: The Business of Climate Resilience."
The question is no longer if business is part of the climate change solution, but how. Even before the U.S. and China officially signed on to the Paris agreements last September, companies across a wide swath of sectors made commitments to cut emissions, move to renewable energy and otherwise work to stem climate change. Such business commitments represent a giant step forward on climate adaptation and resilience and augur well for curtailing climate change.
Over the course of the last decade, climate-related natural disasters have left a lasting impression on companies in the U.S. and around the world. Hurricane Katrina in New Orleans in August 2005, the Sendai earthquake and tsunami in March 2011 in Japan, the 2012 floods in Thailand, Typhoon Haiyan in the Philippines in 2013, and especially Hurricanes Sandy and Irene on the eastern coast of the United States in 2012, have all played critical roles in awakening business in the U.S. to the risks of our changing climate.
Risks exposed by these events include vulnerabilities in emergency preparedness and operational eﬃciency; also exposed were potential rewards of tackling these risks through business adaptation measures.
Nor has business has been detached from eﬀects of ongoing weather conditions, such as droughts, which for multiple reasons — including power outages, transportation delays, supplier disruptions, and more — aﬀect the ability to deliver goods and services. As a result of increased attention to weather and climate-related risks, some companies have pioneered ways to better integrate previously disparate parts of the firm to address this growing challenge, with manifold implications that require the combined eﬀort of people with multiple talents and skills.
Resilience — a willingness and capacity to recover from calamity and create alternative practices to adapt to new realities — is arguably an instinctive response to this multifaceted challenge that also boosts the human spirit and our natural sense of hope.
Companies that embrace this changing reality — often those with a strong, long-standing sense of environmental and social purpose as well as sustainability initiatives — may more readily take advantage of the new, riskier landscape.
What distinguishes the leaders of climate-resilient firms is that, while they’re most certainly responsive to climate crises and trends, they go beyond merely reacting to calamities.
What’s more, those companies, once aware of potential dangers ahead — awareness often gained through painful, first-hand experience of climate-related disaster — are more likely to both adapt (by developing resilience approaches) and mitigate their direct and indirect greenhouse gas emissions. In fact, these two strategies — adaptation and mitigation — rarely are mutually exclusive but instead often go hand in glove toward promoting a climate resilient business.
What climate change oﬀers business is a challenge — in fact, an opportunity — to be met with creativity. Indeed, positive business change in the face of climate change is an inspiring response to what otherwise surely have been some of the most heartbreaking disasters of the past decade. Such business resilience is also a reminder that we do have the wisdom, talent, creativity and urge to persist — not just commercially, but as hopeful and compassionate human beings — to help us tackle the ongoing challenges of climate change.
Two strategies — adaptation and mitigation — rarely are mutually exclusive but instead often go hand in glove toward promoting a climate resilient business.
In their approaches to climate resilience, leading companies in strategic sectors are doing more than just responding to extreme weather events, trends and disasters. Since these are the sort of circumstances that most can’t ignore (because they aﬀect employees, customers, investors, suppliers, communities and finances, among other strategic assets and partners), extreme events often sharpen awareness and ignite a broad climate response.
What distinguishes the leaders of climate-resilient firms is that, while they’re most certainly responsive to climate crises and trends, they go beyond merely reacting to calamities, preparing for more ahead, and trying to prevent the worst outcomes for all concerned. They identify opportunities to create new products, markets and ways of operating their business that can help not just the bottom line but also the world.
Moreover, once companies discover that a resilience approach can attract customers, cut costs, boost revenue and ignite innovation — while reducing the risk of stoking climate change — they’re glad to put new business ideas to work, even spending the money or finding creative ways to finance projects that sometimes entails.
The new priority for those looking to improve climate resilience: finding ways to transfer the helpful principles and practices discovered by leaders in the field to a broader range of companies; that might allow business to take a leading role (and perhaps even serve as a role model) to provide solutions to abate climate change in all sectors.
Just as no company alone, or even the 'private sector' as a whole, can stem the rise of climate change, so too can no company follow rigidly in the path of another.
This can’t be done by business alone. Nor can it be done by government, NGOs, scientists or other experts acting alone. It can best be done by concerted collaboration of all sectors.
Some public-private partnerships (PPPs) are beginning to take hold, oﬀering hope that collaboration on climate can be formed at the community, local, regional, state, federal and international levels. These partnerships suggest that action can be accomplished by multiple interests working together for a common, larger goal: survival of the species and the planet.
Often, public-private partnerships flourish at the local level, with small businesses working with local communities and local government in the interest of all.
For instance, in New York City, the White Roof Project, seeks to cool buildings with dark — often tar — rooftops that trap heat; the organization works with local government (councilmen and others) and companies (especially utility and construction companies) to help neighborhoods save energy and money by painting their roofs white to reflect heat. "It’s a loose, grassroots partnership" from which all sectors benefit, explained Heather James, a board member.
The rise of local partnerships reflects the fact that, just as no company alone, or even the "private sector" as a whole, can stem the rise of climate change, so too can no company follow rigidly in the path of another. Businesses come in all sizes, shapes and forms, and they have diﬀerent interests to protect, diﬀerent customers to serve, diﬀerent leadership and employees, diﬀerent scopes of operation and diﬀerent reasons for being. They have diﬀerent purposes and objectives.
We are not at the end of the resilience story but rather at another beginning point.
This is part of the beauty of the climate change challenge: no company is the same; no one–size-fits-all solution exists. The opportunity for innovation is enormous, as is the appetite for solutions. If anything can spark progress, it is surely the combination of need, urgency, opportunity and creativity — traits that have always motivated people and business alike.
This suggests that companies are likely to find varied ways to approach climate resilience, in the process discovering new resources and models others may find useful — while engendering a low-carbon economy.
We are not at the end of the resilience story but rather at another beginning point along a trajectory unfolding in real time. Almost a year since the Paris COP21, business continues to adapt while mitigating climate change, particularly since the Accord itself highlights adaptation.
An important positive direction has been set, and many companies are taking next steps to embed climate goals into business aspirations and operations. This forward movement on the part of business is likely to continue independently of any ongoing U.S. Supreme Court stay of the Clean Power Plan, as stakeholders demand safer, healthier alternatives and companies look to cut energy costs.