• Navigate
    • About
    • Water-Related Climate Risks
    • Failure to Act
    • Barriers
    • Existing Approaches
    • Conclusions
  • Download Full Report (PDF)
UN Global Compact | Pacific Institute
Mailing List
Publications
  • Corporate Water Disclosure Guidelines (2014)
  • Exploring the Business Case for Sanitation
  • Shared Water Challenges and Interests
  • Understanding "Sufficiency" in Water-Related Collective Action
  • Corporate Water Accounting
  • Guide to Managing Integrity in Water Stewardship Initiatives (2015)
  • Respecting the Human Rights to Water & Sanitation (2015)
  • Guide to Setting Site Water Targets Informed by Catchment Context
  • Guide to Responsible Business Engagement with Water Policy (2010)
  • Understanding Key Water Stewardship Terms
  • Guide to Water-Related Collective Action (2013)
  • Water Resilience Coalition
Tools & Websites
  • Water Action Hub
  • WASH4Work
  • Natural Resources Risk & Action Framework
  • Water Resilience Assessment Framework
  • Benefit Accounting of Nature-Based Solutions for Watersheds
Corporate Water Resilience in an Uncertain Future (2020)Corporate Water Resilience in an Uncertain Future (2020)
  • Navigate
    • About
    • Water-Related Climate Risks
    • Failure to Act
    • Barriers
    • Existing Approaches
    • Conclusions
  • Download Full Report (PDF)

Failure to Act

  • Home
  • Failure to Act

Companies that Fail to Act Will Struggle to Endure, Let Alone Thrive

There is a need for significant action by all parts of society, including the private sector, to curtail greenhouse gas emissions. At the same time, there is the recognition that climate impacts are inevitable, meaning adaptation actions are also required. For companies to adapt and build resilience in a changing climate, they will need to adequately manage the impacts of a changing climate, including the availability of good quality water resources.

Climate adaptation: specific actions undertaken to respond to or prepare for particular climate impacts. Adaptation can lead to climate resilience.
Climate resilience: the ability to recover from and/or resist a deviation, shock, or stressor by bouncing back with transformation.
Water resilience: the ability of freshwater systems to persist, adapt and transform to sustain coherent function under change.1

Climate change adaptation seeks to lower companies’ risks, and also presents opportunities. There are three broad types of opportunities related to physical climate change impacts: managing existing physical climate risks; responding to emerging physical climate risks; and adapting to market shifts driven by physical impacts and catering to any resulting new market needs.2 To illustrate this, 225 of the 500 biggest companies reported climate-related opportunities totalling over US$2.1 trillion dollars.3

Publication of the Financial Stability Board Taskforce’s guidance on climate-related financial disclosure in 2017 has had a positive impact on the private sectors’ approach to climate risk assessment and disclosure.4 Nonetheless, several “blind spots” around corporate climate adaptation exist, including:

  • Risks relating to the transition to a lower carbon economy (referred to as transition risks) receive greater scrutiny than the physical risks of climate change.5 In recognition of the advance disclosure practice, the European Bank for Reconstruction and Development released further guidance for companies to improve their approach to assessing and disclosing information related to the physical risks of climate change.6
  • Of the physical risks of climate change disclosed in the 2018 CDP data, around 70% were considered direct, just over 20% were expected to occur in the company’s supply chains, and less than 10% could affect their customers, suggesting that companies may be less familiar with the ways in which their supply chains may be affected.7
  • Adaptation actions adopted by companies to manage physical climate risks are predominantly soft in nature, with a focus on planning and de-risking processes. Hard adaptation approaches (i.e., capital investments in technology or engineered infrastructure) are the next most common, with ecosystem-based approaches (the sustainable management, conservation and restoration of ecosystems) rarely used.8

Adaptation to water-related climate risks will require dramatic improvements in the efficiency of water use, the elimination of pollution in order to ensure the water remaining in the catchment is safe to use, investments in healthy catchments and water infrastructure, support for adaptive water governance, and the strengthening of the adaptive capacity of local communities. Potential business benefits of strengthening the capacity of local communities include avoidance of company-community conflict over access to water and other natural resources, and ensuring the health and safety of their workforce.9

Continue on with this Guide

  1. Adapted from Boltz et al., “Water is a master variable,” 1-7.
  2. European Bank for Reconstruction and Development, Advancing TCFD guidance on physical climate risks and opportunities, 2018. www.physicalclimaterisk.com.
  3. CDP, Major risk or rosy opportunity. Are companies ready for climate change, 2019. https://www.cdp.net/en/research/global-reports/global-climate-change-report-2018/climate-report-risks-and-opportunities.
  4. TCFD, TCFD: Status Report, June 2019.
  5. Goldstein et al., “The private sector’s climate change risk,” 18-25.
  6. CDP, Major risk or rosy opportunity. Are companies ready for climate change, 2019. https://www.cdp.net/en/research/global-reports/global-climate-change-report-2018/climate-report-risks-and-opportunities.
  7. CDP, Major risk or rosy opportunity.
  8. Goldstein et al., “The private sector’s climate change risk,” 18-25.
  9. Red Cross Red Crescent Climate Centre, Companies and Climate Resilience: Mobilizing the power of the private sector to address climate risks, 2019.

Published

March

2020

Developed in partnership with

Table of Contents

  • About
  • Overview
  • Water-Related Climate Risks
  • Failure to Act
  • Barriers
  • Existing Approaches
  • Conclusions
  • Download Full Report (PDF)
  Newsletter

CEO Water Mandate

UN Global Compact | Pacific Institute

ceowatermandate@unglobalcompact.org

About the Mandate

  • Mission & Governance
  • Endorsing Companies
  • Strategic Partners
  • Focus Areas & Working Groups
  • FAQs
  • News

Mandate Resources

  • Water Stewardship Academy
  • Water Stewardship Toolbox
  • Water Action Hub
  • Newsletter
Tweets by H2O_stewards

United Nations | Privacy Policy | Cookies Policy | Copyright

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT