The Resilient Business: Surviving and thriving in the face of climate change.
CEOs are overwhelmed by the sheer number of challenges they are required to address, coupled with the uncertainty of the future. Case in point, 91% of CEOs say that too many competing priorities hinder progress in building resilience, according to Accenture’s recent Global Compact-Accenture CEO Study, produced in collaboration with the UN.
The pandemic, extended disorder across global supply chains, and the war in Ukraine have disrupted lives and disrupted global business. On top of this, there have been an increasing number of environmental events, from wildfires and flooding to droughts and hurricanes, which have increased in both frequency and intensity.
These events have challenged many organisations’ ability to operate effectively, but also their understanding of what it means to be a resilient business. Climate change will continue to challenge this view further.
What is Resilience?
Resilience has typically been defined as the ability of an organization to quickly adapt to interruptions while limiting interruption to operations. As such, a resilient business is viewed as one that can recover from challenging times.
However, a resilient business in a world challenged by climate change needs to be one that:
- Considers the potential for disruption both inside and outside of its own operations.
- Can anticipate unsettling events.
- Position the business to minimise impacts.
- Continue to identify opportunities for business growth and longevity to benefit the business.
What is Climate Resilience
At Carbon Intelligence, part of Accenture, we define climate resilience as the ability of an organization to assess the implications of climate change on their business, to plan proactively, to adapt to disruptions and to improve in response. A resilient organisation can maintain business operations while minimising the impacts of disruptive events throughout its value chain.
The elements of a climate-resilient business
The characteristics of a resilient business will vary depending on the specific industry and market conditions. However, businesses that are most resilient to the impacts of climate change consider the five pillars of resilience:
- Strategic – The ability to respond to changes in the economic, social, regulatory, and political environment.
- Operational – The resilience of a company’s operations in the event of a disruption, and its ability to continue to operate in the aftermath of a shock.
- Financial – The financial health in relation to its ability to withstand a crisis, adapt, innovate, and invest to capture opportunities.
- Ecosystem – A company’s resilience is dependent on the resilience on the community and natural environment in which it operates, and of the people and ecosystem that it relies on to operate, including its supply chain and distribution networks, its customers, contractors, and clients.
- Culture and Wellbeing – The ability of a workforce, key stakeholders, culture, and structure to deal effectively with disruption and transformation.
Being resilient should be the goal of any organisation, but it is a journey rather than a destination – a resilient company is constantly striving to identify potential risks and opportunities, innovate, and improve in order to thrive in the changing environment. A resilient company understands that vulnerability in any of the 5 pillars of climate resilience has the potential to disrupt the business.
5 key actions your business can take to improve its climate resilience.
- Value-chain mapping. Mapping the entire organisation against the 5 pillars of climate resilience allows businesses to understand the risks across the entire organisation and identify vulnerabilities and critical nodes which is essential to building resilience.
- Disclose to TCFD. Our TCFD (Taskforce on Climate Related Financial Disclosure) programme allows organisations to understand their unique climate risks and opportunities. A mature TCFD report impacts the confidence stakeholders have in an organisation’s approach to climate resilience.
- Horizon scanning to understand future changes and assess trends. An Accenture Study on resilience identified that companies that demonstrated long-term profitable growth constantly “adapt their ability to adapt.” Horizon scanning helps businesses become adequately prepared for potential opportunities and threats, assisting with ensuring that the corporate strategy is resilient to future environments.
- Conduct climate strategic evaluation workshops. You have developed your company’s roadmap for the future, but how could external factors impact your ability to achieve those plans? Strategic evaluation workshops assess the impact of external climate influences on your ability to achieve your goals.
- Digitise your risk analysis. Accenture research found that 62% of CEOs are strengthening their scenario planning and analysis capabilities while 17% are implementing artificial intelligence for real-time risk analysis within their businesses.
Is your organisation resilient to the impacts of climate change?
How we can help
Our team of climate resilience strategists have decades of experience supporting large, complex organisations to map their risks and actively build climate resilience into business planning. Get in touch with our team today to find out more [email protected]