Adapting to a changing climate on the business agenda
hace 11 month
Pia Zevallos - Libélula General Manager
It has been several years since climate change went from being a threat to a reality. Forest fires, droughts and floods are some of the climate emergencies that Peru and the rest of the world are facing more frequently. According to the National Center for Strategic Planning (CEPLAN, 2023), emergencies due to climatic and oceanographic phenomena have increased by 132% between 2012 and 2022. Globally, climate-related disasters increased 2.5 times between 2013 and 2022, according to the World Trade Organization.
Despite this context, most companies globally are still not prioritizing their adaptation to climate change. According to the Global Corporate Sustainability Assessment (Standard & Poor's, 2023) - an annual analysis of sustainability practices in 13,000 companies globally - one in five companies has a plan to adapt to the risks of climate change. That is why, from 2021, international reporting and accounting standards such as the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) require companies to know and disclose their dual climate materiality, i.e. to report on the emissions they generate in their operations and how they are affected by climate change.
Knowing and managing business adaptation can also generate opportunities such as the development of products and services. Innovation in smart irrigation systems, the construction of buildings to regulate heat are examples of new opportunities; in addition to the possibility of accessing climate regulated markets such as the European Union. For example, the Border Carbon Adjustment Mechanism requires climate management throughout the value chain of regulated companies, regardless of the country where the supplier is located. Companies that do not manage their emissions can thus be excluded from foreign markets.
The first step that companies should take to manage their adaptation is to conduct a climate risk analysis and publish this information to their stakeholders (in integrated financial reports, sustainability reports and platforms such as CDP, formerly called the Climate Disclosure Project). In this way, companies can be prepared to anticipate, manage and report on how climate change will affect their financial performance, thereby contributing to the long-term sustainability of the planet and their business.
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