Adapting to Climate Change: a Business Approach
AdApting to climAte chAnge: A Business ApproAch TRATEGY S By Frances G. Sussman senior economist, icF internAtionAl, And J. Randall Freed senior Vice president, icF internAtionAl MARKETS AND BUSINESS AdApting to ClimAte ChAnge: A Business Approach Prepared for the Pew Center on Global Climate Change by Frances G. Sussman Senior economiSt, ICF international, and J. Randall Freed Senior Vice PreSident, ICF international April 2008 The authors would like to thank Kathryn Maher, of ICF International, who provided valuable research assistance for this paper, and Anne Choate and Susan Asam, also of ICF International, who provided helpful comments. We would also like to thank Andre de Fontaine and Vicki Arroyo of the Pew Center on Global Climate Change, and Truman Semans, formerly of the Pew Center, as well as several anonymous peer reviewers and members of the Pew Center’s Business Environment Leadership Council (BELC), for helpful comments and suggestions. Contents Introduction 1 I. Climate Change: A Range of Risks and Opportunities 3 II. The Case for Business Adaptation: What is at Risk? 7 III. The Risk Disk and The Adaptation Challenge 11 IV. Meeting the Challenge: Screening for Climate Impacts and Adaptation 15 Question 1. Is climate important to business risk? 16 Question 2. Is there an immediate threat? Or are long-term assets, investments, or decisions being locked into place? 17 Question 3. Is a high value at stake if a wrong decision is made? 18 V. Case Studies: Three Business Responses to Climate Risks 19 Entergy Corporation: A Climate Wakeup Call— The First Step Was Admitting There Was a Problem 20 The Travelers Companies, Inc.: An Ounce of Prevention— Linking the Interests of Homeowners, Business, and Insurance Providers 23 Rio Tinto: Reappraising “Normal”— Designing to Weather, Climate, and Climate Change 26 VI.
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