Are businesses in the United States successfully translating climate change data into action to reduce risk? During today's OnPoint, Janet Peace, senior vice president at the Center for Climate and Energy Solutions, discusses a new report examining businesses' resilience to the impacts of climate change. She talks about the public infrastructure challenges facing businesses and explains how public-private partnerships could help facilitate the planning process.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Janet Peace, senior vice president at the Center for Climate and Energy Solutions. Janet, thank you for coming back on the show.
Janet Peace: Oh, it's really my pleasure.
Monica Trauzzi: Janet, C2ES recently released a report examining the resilience of businesses to the impacts of climate change. What's happening on the ground that led you to dig into this question about resilience?
Janet Peace: Well, you know, the climate's changing, obviously. 2014 was the globally warmest year on record, and that has implications. You know, we're seeing drought in California, we're seeing, you know, increased fires. You can't attribute any of those particular events to climate change, but these events are happening, and they're happening more frequently. You know, climate change, we -- I remember when I first started in this area, it was kind of a far in the future, we need to prepare, but it's really now. It's really here now.
Monica Trauzzi: So how are the S&P 100, then, handling the risks posed by climate change, and is there sort of a common trend that you noticed among the companies that you spoke to?
Janet Peace: Absolutely. I think the good news story is that these big companies, they don't have their head in the sand. You know, over 90 percent of the S&P Global 100 acknowledge and report on climate risk. And they're taking more steps today than when we did our first report on corporate resilience a few years ago. There's more vulnerability assessments, for example, that are actually happening now.
Monica Trauzzi: But what's still missing? Kind of what are the missing links?
Janet Peace: Well, you know -- you know, companies still are struggling. They're still struggling with connecting the dots between global climate and long-term data to local, more near-term business decisions. So there's a lot more data out there today than there used to be, but taking that global data and making it relevant. One company called it "we need actionable science that we can plan on and use in our everyday decisionmaking."
Monica Trauzzi: What does that mean, actionable science?
Janet Peace: To be able to figure out, well, if I'm going to build a facility in Cincinnati, what are the impacts that I might be wanting to consider? What are the scenarios? So taking that data and putting it into, you know, scenarios that they can plan and that they can share with their regions on.
Monica Trauzzi: Some companies expressed concerns about public infrastructure, so what's the policy tie-in?
Janet Peace: Oh, they're absolutely concerned about outside-the-fence risks, whether it's their supply chains -- a lot of companies talked about their supply chains -- and a lot of companies talked about infrastructure, so the energy inputs that they need, the roads, the bridges to be able to get their employees and their customers to and from work and to and from their markets.
Monica Trauzzi: Are companies at all sort of underestimating the potential risks that they face?
Janet Peace: You know, it's a pretty wide tent at this point. Most of the companies are addressing climate within their -- the climate risk within their enterprise risk management or business continuity processes. A lot of companies, though, are looking at historical data and they're not looking forward. That's a key thing. The changes in these risk profiles are changing over time, so companies need to bring that into their decisionmaking, but it's a challenge because they don't know exactly how to take this global data and make it a part of -- not all of them -- they don't know how to make it part of their decisionmaking.
Monica Trauzzi: So you make a set of recommendations for companies to start taking a look at. What's the No. 1 thing that companies need to do to understand if they are assessing the risk that they face properly?
Janet Peace: Well, I think you started with if they're assessing the risk properly. I mean, the No. 1 thing they should do is do a vulnerability assessment, and there's not one best way of doing that. You know, some companies are starting a little bit smaller, some companies -- we call that a bottoms-up way to assess those vulnerabilities -- and then there's a top-down, where you look at across your enterprise and say, OK, well where are my business units, what are the raw material and risks that I should be facing. And really, they're looking at climate, not as a stand-alone risk, but really as a threat multiplier. And we hear that over and over again. So the No. 1 thing they should do is assess those vulnerabilities, and if they haven't -- you know, if they haven't really done this, if it's just new for them now, they might want to start at a smaller scale. You know, you look at a particular risk, a particular region, a certain set of operations, and examine that, communicate the results, bring in the relevant folks from across the organization, whether it's, you know, you've got your sustainability people, you have the people from the risk management group, operations, the real estate group if you've got a large footprint, and your finance folks.
Monica Trauzzi: What types of public-private partnerships, what does the government need to do to help these industries move along and facilitate the planning process?
Janet Peace: I think there's a huge opportunity for companies to work with cities and regions in this planning process. You know, cities have a lot of data. Companies have a lot of resources. So partnering between the two can only result in better planning for resilience.
Monica Trauzzi: All right, very interesting. Thank you for coming on the show. I appreciate your time.
Janet Peace: Oh, it's really my pleasure.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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