Adapting to climate risks: a crucial challenge for businesses

The Association of Climate, Energy and Environment Consulting Professionals

Since 2016, APCC’s Webconferences have provided an opportunity to engage companies and local authorities on climate-related topics. We have contributed our expertise to this community of stakeholders on numerous occasions, and this time, we have chosen to address a wider audience—companies, industries, and local authorities that are wondering how to anticipate and prepare for the impacts that climate change will have on their activities and ecosystems.

Watch the replay of the APCC Webconf - Adaptation to climate risks, or how to manage the inevitable with Juliette JANNES and Maxime KATGELY

Climate risks and adaptation

On April 25, 2024, we were able to share our methods and perspectives on climate risk and adaptation. Climate adaptation means making an activity more resilient to the risks brought about by climate change. For a long time, adaptation has taken a back seat to mitigation, which focuses on reducing GHG emissions. The SNBC (National Low-Carbon Strategy) is better known than its counterpart, the PNACC (National Plan for Adaptation to Climate Change). Indeed, climate risk management tends to be more aligned with a company’s long-term strategic horizon—its survival by 2030, 2040, or 2050—while in 2023, decarbonization has become a tactical tool, actively being implemented in many organizations.

However, the urgency is increasing for local authorities, companies, and individuals for various and complementary reasons:

• Recent heatwaves and droughts have highlighted the severity of some scenarios that were once only hypothetical. All sectors (agri-food, water networks, and even energy production) are affected.
• Stakeholders (banks, insurers, governments) are increasingly questioning the exposure of activities and projects to climate hazards. Many subsidy applications or operating permits now reference climate risk analysis. Moreover, cases of non-insurable risks are on the rise.
• Public authorities are taking action, as shown by the announcement of a +4°C scenario plan and support for financing business adaptation. The issue of adaptation is becoming more prominent in public discourse.
• Regulatory frameworks (both mandatory and voluntary) are multiplying: CSRD, TCFD, Banque de France, and B-Corp. Some requirements are becoming widespread, while others are tightening due to dependencies between contractors and suppliers.

Engaging in climate adaptation can be daunting, given the vast scope of the subject and the often-distant horizon of its consequences. 

The aim of this web conference is to provide guidance on how to embark on this journey by drawing from risk analysis practices in industrial settings and related continuous improvement processes, while also outlining the data organizations need to acquire or structure.

Using examples, we demonstrated during this session how an organization can leverage its existing knowledge, skills, and processes, extending them to encompass climate risk. Operational risk studies, supply chain security plans, emission reduction curves, risk matrices, and global indicators are all building blocks that can be used to construct an evolving adaptation strategy integrated into overall business management.

But how can organizations develop scenarios and understand the direct and indirect physical impacts on value chains without relying on quantified climate scenarios?

Our partner, ASES-CDS, shared its expertise on the available data in this area and how data science and modeling can help identify, quantify, and manage risks. The goal is to show how data—such as rising temperatures, increased flood frequency, and soil moisture levels—can be used to pinpoint and assess climate risks through concrete case studies (factories, forest and biomass impacts, urban heat islands, etc.). ASES presented a practical case involving the application of data to reforestation and greening plans.

These measures are critical throughout the evaluation/response process, as data modeling and engineering also enable the development of resilience plans and strategies for adapting to both current and future climates. Utilizing these approaches also aims to foster a true risk management culture, focusing on both the risks and opportunities linked to the influence of climate change on territories and activities.