Understanding and Managing Climate Change Risks and Adaptation Opportunities in a Business Context

Climate change poses complex challenges for business not only because of uncertainty associated with the timing and magnitude of projected changes but also because of the interconnectedness between risks and impacts in the modern globalized economy. Drawing on the practical experience with forward-thinking companies in the extractives, chemicals, power, transport, and agriculture sectors, this chapter introduces the concept of systems thinking for managing climate risk and developing adaptation strategies and presents four key steps that businesses can take to (1) understand climate context, (2) assess climate risks and opportunities, (3) develop a business case for managing climate risk and build resilience throughout their value chain, and (4) create a strategy to provide direction and ensure integration within the business. It also presents practical examples of how businesses are addressing these challenges through case studies in a number of business sectors. By providing a means for companies to “see the wood for the trees,” the practical actions required to manage climate risk are demystified, and business leaders are provided with tools to help ensure that their companies are proactive in understanding and managing climate risk and adaptation.