Climate Web Advisory
There are a lot of ways you can take advantage of the Climate Web on your own. But if you’re not so inclined, that’s OK! The Climatographers can serve as your conduit to its climate knowledge. Business advisors can use the Climate Web in the same way on behalf of their clients.
A few ways you can leverage the Climate Web indirectly include:
Ready-Made Briefings and Webinars
The Climate Web can be used to deliver topical briefings and webinars across many climate topics virtually on demand. Some of those topics are listed here, but it is by no means a complete list.
- Does Low-Carbon Investing Reduce Risk and Mitigate Climate Change?
- Are We at a Climate Response Tipping point?
- Bounding the Future With Climate Scenarios
- Conventional vs. TCFD Scenario Planning - What Are the Implications?
- Could Climate Litigation Follow in Tobacco's Footsteps?
- How Can the Social Cost of Carbon Translate Into Business Risk?
- How Fast Could Business Risk Go South, and How Bad Could It Be?
- How Fast Could the Climate Change, and How Bad Could It Be?
- How Long Will Carbon Offsets Survive?
- How Will Carbon Pricing Evolve?
- Is It Time to Adopt Policy Advocacy as a Climate Risk Management Strategy?
- Is #Greenwishing a Risk to Your Corporate Strategy?
- What Would Achieving a 2o C or 1.5o C Target Mean for Business?
Customized Briefings and Brainstormings
The Climatographers can assemble specialized briefings on almost any topic relevant to business climate risk assessment and risk management. Here’s a recent example, and there's a video if you’d like to take advantage of it! The Climatographers were approached by one of the major firms in the low carbon investing space and asked to put together a briefing covering questions with which the firm was grappling, including:
- Are carbon emissions (absolute or intensity based) correlated to business risk?
- Do lower emissions correlate with company financial performance?
- Does setting GHG targets contribute to emissions reductions?
- How did carbon footprinting get integrated into investing?
- How does carbon-based screening impact investing?
- How indicative of risk are Scope 1 and 2 emissions, as compared to Scopes 1-3?
- What are the advantages/disadvantages of location vs. market-based Scope 2 reporting?
- What are the advantages/disadvantages of reporting intensity vs absolute emissions?
- What do we know about the accuracy of Scope 1, 2, and 3 emissions data?
- What is the relationship of BODs to GHG emissions reporting?
- Why are investors so focused on carbon footprinting as an investment screening tool?
Those are among the questions shown in the screenshot below that formed the starting point for the briefing. Note that once assembled, the client’s staff could review the information at their leisure through a private URL, given that the scope of the information organized from the Climate Web was far more than could be covered in a 2-hour briefing.
For purposes of the briefing, the Climatographers pulled together materials from all over the Climate Web, organizing the materials according to the questions we had been asked to explore. Drilling down into the briefing, here's how the briefing was structured. For each question we pulled together key arguments relating to that specific question, based on our review of the relevant literatures.
Note that the "Arguments" you see here in brown should not be assumed to represent the thinking of the Climatographers. Arguments generally represent issues brought up in the topical literature. In many cases, you'll encounter pros and cons when it comes to a particular question. In fact, as you can see below, each Argument then links to specific “answers” representing source materials, ideas, and graphics in the Climate Web. Independent of a briefing, users can click through the entire collection of questions, arguments, and "answers,” and the whole process is remarkably cost-effective since so much of the needed work is already present in the Climate Web.
Decision Support Products and Services
The Climatographers, or consulting and law firms, can utilize the Climate Web to help deliver climate-related products and services that include:
--Rapid Materiality Assessments
Decision makers of all kinds and at all levels are constantly balancing the priority they assign to competing problems and opportunities. Any addition to the corporate “priority list” has to be considered sufficiently important to the organization’s mission or values by management. When it comes to climate change, the critical question is: “Does climate change pose material risks or opportunities that as an organization we can’t afford to ignore, or that as an organization we want to pro-actively engage upon?”
In many cases, the answer to this question will vary depending on an organization’s vulnerability to the potential physical, policy, market, and other impacts of climate change, as well as the organization’s sensitivity to risk. The Climate Web makes it a lot easier to answer these questions regarding the materiality of climate change.
A Climate Risk Rapid Materiality Assessment (RMA) is a resource-effective way using the Climate Web to assess the “materiality” of climate change to an organization’s goals and risk management objectives. The result is a quick but comprehensive assessment of climate risks and actionable conclusions for decision-makers. The RMA is carried out using the expertise of company staff.
A Rapid Materiality Assessment Case Study: Working with an equipment manufacturer in the oil and gas industry, the Climatographers initially encountered an RMA situation in which a sizable fraction of the company’s participants in the project didn’t accept climate change science. (The company had recently been acquired by a European company, which mandated the RMA.) The company team involved in the RMA project was understandably skeptical of the whole idea of a Climate Risk RMA. But after just three one-day workshops spread over three months, the team's participants concluded that the “materiality” of climate risks was real and strongly advised management to adopt a strategic response.
--Climate Assumptions Audits
Management gurus have long advised business leaders to frequently reevaluate their core business assumptions. Business books are full of case studies of the bad things that happen when companies fail to heed that advice. As noted by scenario planning expert Kees van der Heijden, for example:
“ . . . in times of rapid change the large well-run companies are in particular danger of suffering from strategic failure, caused by a crisis of perception….[because of] the inability to see an emergent reality by being locked inside obsolete assumptions.”
Today, business leaders are being told to incorporate climate change risks and opportunities in their planning and decision-making. But these are relatively new topics for many business decision-makers, and all kinds of underlying assumptions are in play when it comes to:
- Climate change itself
- The business materiality of climate risks and opportunities
- The economics of climate change and climate change mitigation
- The changing probabilities of extreme events and business disruptions
- The timing of potential climate change and climate policy tipping points
- The likely evolution of climate policies and measures
- How climate risks will play out at the sectoral level
These are complicated and rapidly changing topics. It should not surprise anyone that many decision-making assumptions about climate risks and opportunities don’t reflect the best available information. An Assumptions Audit can help company decision-makers make sure they are taking advantage of the best available information when it comes to climate risk assessment, climate strategy development, or climate scenario planning.
An Assumptions Audit Case Study: A Japanese electric utility had done an internal analysis of climate risk. It had arrived at a "worst case" estimate of risk to the company’s financial bottom line. The Assumption Audit suggested different ways to look at several of the key assumptions they were making. The company ended up revising several key assumptions and increasing estimated bottom-line risk 7-fold.
Climate change scenario planning was not a common business response to climate change until recently. Some sectors routinely deploy scenario planning as pioneered by Shell Oil in the 1970s, but it wasn’t until companies felt growing pressure from the Task Force on Climate-Related Financial Disclosures (TCFD) that climate scenario planning has become mainstream. But there are plenty of outstanding questions for organizations looking to carry out climate scenario planning:
- Are there different approaches to climate change scenario planning?
- Why pursue scenario planning, and with what objectives?
- How far out do you have to look, using which scenarios?
- Is the primary audience internal (e.g., management) or external (e.g., investors)?
- How much will scenario planning cost?
- How much staff and management time will it consume?
There are no one-size-fits-all answers to any of these questions. A narrow and constrained scenario planning process may be more valuable to one company's decision-makers than a comprehensive and more costly scenario planning exercise; another company may benefit from just the opposite. A lot depends on the organization, its goals and needs, how it makes strategic decisions, and its decision-making environment.
The Climate Web contains thousands of hours of knowledge curation relevant to these and other questions. It can support scenario planning in a wide variety of contexts. Smaller companies may be able to carry out their entire scenario planning process using the Climate Web alone!
--Getting Positioned for Radical Uncertainty
Scenario planning is a great tool for bounding future climate risks and opportunities. What scenario planning can't do is reduce the large uncertainties companies face when it comes to climate change, particularly in the near to medium terms.
- Will climate change accelerate?
- Will climate change tipping points be triggered?
- Will public opinion on climate change shift and polarization be moderated?
- Will governments implement the 2oC target (or some other target?)
- Will carbon be priced (how much and by when?)
These are just a few of the many uncertainties surrounding how climate futures will manifest. These uncertainties make it challenging for companies to commit to a specific business course that might include:
- Shifting to an entirely new business model
- Divesting business units or assets
- Acquiring business units or assets
- Relocating facilities and assets
- Selecting a carbon price to apply to internal capital decisions
To inform the timing of decisions like these a company can benefit by tracking the evolution of its climate change decision-making environment. The company can then be prepared to act when the time is right. A pre-planned "rapid response" capability for situations that you can't "go all in" on today can place the company in a much better position to move quickly when the time is right.
To discuss how you can take advantage of the Climate Web using the Climatographers’ support, or how your law firm or consulting firm can take advantage of the Climate Web to deliver your own products and services, contact the Climatographers.