Insights in Resilience: International Adaptation

We asked our Director of Advisory Services Yoon Kim, about her work on international adaptation and for insights from her recent trip to the 2016 Adaptation Futures Conference in Rotterdam Netherlands.

1. Tell us about your work supporting the US Agency for International Development’s (USAID’s) national adaptation planning efforts and your recent publication on this topic.

In the international arena, we’re currently seeing a shift from a focus on immediate adaptation needs to a more strategic, longer-term approach to adaptation planning. Working closely with USAID’s Adaptation Team, I facilitated the mainstreaming of adaptation into planning and decision-making in developing countries through the implementation of high-level, cross-sectoral stakeholder workshops. These workshops sought to catalyze the development of national adaptation plans (NAPs) as described under the United Nations Framework Convention on Climate Change by demonstrating USAID’s approach to climate-resilient development, building broad buy-in and support for the NAP process, and identifying opportunities for cross-sectoral coordination and collaboration. To capture and share lessons learned from USAID’s experience implementing NAP stakeholder processes in Jamaica, Tanzania, and 11 coastal countries in West Africa, I led the development of a paper on USAID’s experience facilitating NAP processes, which was published in Climate and Development earlier this year.

2. What are some of the lessons learned from early NAP processes in developing countries?

Climate change does not respect sectoral or geographic boundaries. So, it is critical to engage key sectors as well as ministries, departments and agencies, including more powerful entities, such as the finance ministry, from the outset. Early and continuous engagement helps to promote ownership and buy-in for the adaptation process and facilitates coordination. The support of a powerful entity such as the Prime Minister’s or Vice President’s Office can also help to build support and motivate action.

Mainstreaming also tends to be more effective when one starts with an existing planning process and considers how climate change may affect it. For instance, in Jamaica, linking adaptation efforts to the country’s long-term development plan, Vision 2030 Jamaica, helped to make adaptation relevant to sectoral stakeholders and to demonstrate how adaptation planning could complement existing planning efforts.

3. You were just at the 2015 Adaptation Futures conference in Rotterdam, Netherlands. What was your key takeaway?

I was heartened by the range of adaptation efforts taking place in key sectors such as health, urban resilience, and disaster risk reduction. However, I also saw a couple of key gaps regarding financing and the private sector. As more jurisdictions move from vulnerability assessments to adaptation planning, it becomes increasingly urgent for them to identify a set of appropriate funding sources and mechanisms and to understand how best to apply them. While there is important work being done by a number of donors, research institutes, and non-governmental organizations on these issues, there is still a need to map financing options, both in terms of sources and potential mechanisms (e.g., bonds, taxes), and to link them to demonstrate sectoral and location-specific applications. Doing this successfully will require dialogue across international, national, and subnational levels and consideration from the outset of how funding will be accessed and utilized.

Regarding the private sector, we often refer to them as an undifferentiated block. However, to engage them effectively, we need to unpack this term and develop a more nuanced understanding of who we mean by the “private sector” in a given context. Four Twenty Seven has found in its work with different private sector entities that the needs and concerns of financial institutions differ significantly from those of manufacturing companies which in turn differ from healthcare providers. This differentiated understanding is critical for being able to identify entry points for engagement that not only speak to what these entities care about but also opportunities to leverage competitive advantage to develop solutions.

Policy Brief: The Evolving Regulatory Landscape of Financial Climate Risk Disclosure

This Four Twenty Seven Policy Brief provides a summary of key findings from the Task Force of Climate-Related Financial Disclosures Phase I Report and highlights issues of interest to reporters and users of financial disclosures within corporations from the financial and non-financial sector.

What is the Task Force on Climate-Related Financial Disclosures?

In December 2015, the Financial Stability Board created a Task Force on Climate-Related Financial Disclosures (TCFD). The industry-led Task Force, chaired by Michael Bloomberg, is mandated to make recommendations for improving voluntary financial disclosure of climate-related risks. This coordinated international effort comes after investor advocacy organizations, like Ceres, have called attention to the poor quality of climate risk disclosures in financial filings (10-K management disclosures) and the lack of enthusiasm from the Securities and Exchange Commission in enforcing its 2010 guidance on climate change disclosure.

The Task Force released its Phase I report on April 1st. The report provides a high-level review of the existing landscape of climate-related disclosures, establishes fundamental principles for effective disclosures, and defines the scope and objective of the Task Force’s work through 2016. The report comes on the heels of an SEC ruling that ExxonMobil must include a climate change resolution on its annual shareholder proxy at the request of shareholders including the NY State Pension Fund.

Why is this Important?

The ultimate goal of the TCFD is to enable financial market participants to incorporate considerations on climate risks and opportunities into investment, credit and insurance-underwriting decisions, as well as to increase investor engagement with boards and management with respect to corporate climate risk management. This portends momentous change for the most exposed sectors. Over time we believe that the impact of the report has the potential to mainstream climate risk analysis and disclosure reporting requirements across all financial asset classes – equity, commodities, real estate, bonds – and will force a focus on climate resilience for all underlying assets – corporations, energy, agriculture, real estate, cities, and more.

Improved financial disclosures on climate-related risk will enable more informed decision-making within the financial markets and yield positive impacts for the economy. A higher standard on financial disclosures will also enable “appropriate pricing and distribution of risks throughout markets” and reduce financial instability by lowering the risk of an abrupt change in asset values (“transition” risk).

Just as the ultimate goal of the FSB and the G20 is to avoid another major financial crisis, In our view, the Task Force embodies the best climate change financial policy architecture that will promote market efficiency in a context of scientific uncertainty and information asymmetry. While the Task Force recommendations will not be binding, they come at a time when market authorities and financial regulators are looking to gain a greater understanding of climate change impacts on financial markets, and the Task Force recommendations will constitute a critical reference point for consensus on climate risk disclosures, and facilitate international standardization of requirements.

The Current Landscape of Climate Risk Financial Disclosure

The Task Force report finds that current climate risk financial disclosures are fragmented and incomplete, with a lack of agreement on what constitutes materiality. Most disclosures consist of boilerplate language that does not provide decision support or even useful information to investors. They also fail to acknowledge an organization’s specific risk profile and exposure to climate risk. Finally, most disclosures pertain to climate information in general and not to climate-related financial information.

The TCFD report highlights in particular the lack of comparability across disclosures due to ad hoc reporting practices, which prevents analysis of possible systemic risk in financial institutions’ portfolios and in financial markets at large. These findings are consistent with previous reports from Ceres and from the Sustainability Accounting Standard Board (SASB), as noted in their Technical Bulletin on Climate Risk from January 2016.

Proposed Principles for Effective Disclosures

The Task Force lays out seven fundamental principles for effective disclosures:

  1. Present relevant information.
  2. Be specific and complete.
  3. Be clear, balanced, and understandable.
  4. Be consistent over time.
  5. Be comparable among companies within a sector, industry, or portfolio.
  6. Be reliable, verifiable, and objective.
  7. Be provided on a timely basis.

While these principles are fully aligned with general principles of financial disclosures and with previously established climate disclosure framework, notably from the Climate Disclosure Standard Board, they raise a number of practical challenges when applied to climate risk disclosure. Climate science continues to evolve, as does global climate policy, making it difficult to be “consistent” over time. Climate impacts touch businesses and the economy well beyond the walls of any given corporation, but accounting for these indirect risks in a “specific and complete” manner is extremely challenging. An accepted methodology to measure and quantify climate risk will go a long way towards ensuring that disclosures meet these principles, and that the information is “comparable among companies.”

Looking Ahead: Phase II Scope of Work

The Task Force will seek to establish guidance as to what needs to be reported, in what format, and for what purpose.

Climate-Related Risks and Opportunities

The first challenge the TCFD will take on is defining what qualifies as climate-related risks and opportunities. In the framework outlined in the Phase I report, the TCFD echoes the common dichotomy between “physical risks” (e.g. extreme weather events) and carbon-related “non-physical” risks (e.g. carbon regulations, cost of low-carbon technology, asset liability, etc.). In our view, this framework is bound to evolve to better account for the breadth of regulatory, technological, market/economy, and reputational impacts directly related to climate risks and opportunities, including for example: changes in zoning laws, cost of adaptive technologies, changes in commodity pricing, etc.

Governance

Second, the Task Force will ensure climate-related risks and opportunities are considered in the broader context of the reporting entity’s strategic management. The Task Force will encourage disclosures pertaining to the governance process, specifically how boards and executive leadership consider and approach climate risks and opportunities.

Entities: Preparers and Users

Third, the Task Force will develop recommendations for reporting by non-financial companies – mainly publicly-traded corporations – as well as by financial intermediaries, investors, and asset managers that may be exposed to climate change in their portfolio. While recommendations will likely focus on companies above a certain size, they may also apply to privately-held corporations. In the financial sector, the Task Force intends to emphasize risks associated with underlying loans and investments in companies, and possibly into real estate investments as well.

The Task Force is also interested in better understanding how the climate-related disclosures will be used and by whom. The objective is that disclosures be provided in a format such that users across the entire financial value chain can integrate climate risk metrics into existing risk assessment, portfolio analysis, asset allocation, and other financial decision-making processes.

Information to be disclosed

Finally, the Task Force will give particular attention to the information being disclosed. This information may include both quantitative and qualitative disclosures, providing “consistent and comparable data and metrics” to be aggregated across portfolio.Screen Shot 2016-04-04 at 12.01.32 PM

For quantitative metrics, an established accounting system exists for carbon accounting, but no such common methodology is available for physical and indirect impacts of climate change, especially not across a broad range of sectors and asset classes. The Task Force will need to balance the conflicting needs between finding a lowest common denominator metric that can be used across sectors, and disclosing data and metrics that provide relevant insights into sector-specific risks. The Task Force may encourage greater use of scenario and sensitivity analysis to support forward-looking assessments of risks and opportunities.

For qualitative disclosure, the Task Force will consider governance, transition strategies, priorities, and processes. This indicates that companies with a vision and plan for greater climate resilience, together with well-supported Key Performance Indicators showing progress towards established resilience milestones, will be better positioned to protect shareholder value.

Next Steps

The Task Force will be working on Phase II elements through the end of 2016 and will deliver its recommendations to the FSB in December 2016, with a finalized report expected in February 2017. The Task Force intends to integrate and leverage stakeholder input throughout the process and is currently inviting feedback through May 1st in the form of a detailed questionnaire on its website. The questionnaire solicits structured feedback on reporters’ and users’ needs, scope and definition of climate risks and best practices.

The regulatory landscape of climate risk disclosure is evolving rapidly. Corporations and investors will be well advised to stay current on legal and policy changes related to climate change risks, and to deepen their understanding of climate change science and its impacts on their business. While climate change presents a wide array of direct and indirect impacts, many of these impacts can be forecasted and managed. Businesses able to take in new knowledge on climate change will be able to stay ahead of the curve, manage regulator and investor expectations, protect their value, and capitalize on opportunities.

Learn more about how we are helping corporations adapt to their climate risk.

Reference Documents

TCFD Phase I Report

SEC Commission Guidance Regarding Disclosure Related to Climate Change

Ceres Cool Response Report

SASB Technical Bulleting 2016-01

Resilient Hospitals: Using Climate Data for Better Healthcare Planning

A busy medical ward is the last place you want the lights to go out in the event of a hurricane, flood or extreme weather event. These are also the conditions that can drive surges of patients to emergency rooms for treatment at a rate that can quickly outpace the hospitals capacity to react. Climate change increases the frequency and magnitude of extreme weather events and conditions – from asthma to vector diseases — likely to increase demand for healthcare. However, most hospitals have yet to integrate local climate change projections into their risk management and planning processes.

Photo Credit: GetyImages
Photo Credit: GetyImages

Working with a coalition of healthcare networks and non-profit Healthcare Without Harm, we developed an award-winning user-friendly dashboard for hospitals to better understand how climate change effects their operations and the patient population that they serve. This innovative application enables participating healthcare networks to integrate climate risk analytics into their hazard and vulnerability assessments, strategic communications and long-range planning.

The Resilient Hospital Dashboard is an interactive platform that enables healthcare networks to identify hotspots, key drivers of risk, and the specific local impacts faced by each of their hospitals. By using climate, socio-economic, public health and facility specific data, our dashboards analytics help hospitals understand the impact of climate change on their community and patients.

 

How does it work?

Our Resilient Hospital dashboard integrates local climate projections and applies healthcare indicators unique to each hospital’s situation to account for results specific to their populations. It provides hospitals with a cost-effective way to access and understand climate data relevant to their day-to-day operations and specific to the populations they serve.

dashboardscreen
Climate, socio-economic, public health, and facility data inform the risk assessment in our Resilient Hospital dashboard.

In the same way that doctors and care providers use their expertise and medical knowledge to provide treatment that returns the best long-term health outcomes for their patients, our applications leverage climate and healthcare data to provide beneficial operational outcomes. It enables our clients to consider both the near and long-term impacts of climate change and expertise that can inspire actions that enable healthcare professionals and hospitals to operate when the need for their services is greatest.

From Data to Patients

Through the Resilient Hospital Dashboard we aim to tell a story about how hospitals can improve the bottom line, and do so by capturing the many individual stories of climate change. Behind every data point we use to identify risk and impact is a living, breathing patient admitted for treatment of heat stroke, asthma, or other environmental event.

Our data analytics and research shows that the people getting admitted for care are the most vulnerable among us. They include the young, the old, and the marginalized. While we originally set out to identify opportunities for hospitals to improve their operations — and our dashboard does that too, what we ultimately created is a data-driven, visual representation of the footprint climate change is leaving on society.

The trends we are seeing create a much-needed understanding of how climate change impacts communities. From this understanding we can find opportunities to act, and help doctors and care providers choose what actions can best support their planning process, enabling them to provide more consistent and higher quality of care, resilient to the operational shocks and stress of climate change.

dashboard

The Resilient Hospital Dashboard was developed as part of our commitment to the WhiteHouse Climate Data Initiative and won the CCBJ 2015 business achievement award.

Contact Aleka Seville for a demo or for more information: 415-930-9090

Insights in Resilience: Climate Change and Human Health

The healthcare sector is often the first to witness the impacts of poor air quality, extreme weather patterns and other climate related hazards that impact the health of their community. From heat waves to floods and exposure to rapidly spreading vector borne illnesses like malaria, lyme disease and more recently the Zika virus, the nexus of climate change and human health gets stronger every day.

We asked our director of research, Nik Steinberg, to present his work to inform the healthcare industry about the effects of climate change and the trends he is observing in how healthcare professionals approach climate change.

 

1. Tell us more about your work with the healthcare industry and how you help them build resilience into their operations.

Last year we built a new decision-support tool for hospitals across the United States. The work was fascinating because it combined systems analysis, climate science, and epidemiology. We started by identifying all the projected climate hazards within a hospital’s service area and then we sorted out the characteristics of those hazards – their projected frequency, severity, and timing. From there, we determined if the hazard was likely to impact the hospital itself and/ or the health and safety of the community. Next, we attempted to co-locate the hazards with exposed populations and facility systems to get a better idea of which type of patients are most exposed to heat waves and poor air quality, and where those patients live.

Our work is quite novel because it transforms something that once might have felt uncertain and ambiguous for some healthcare professionals — climate change impacts — and places it in context of their local hospital, community, and the people they interact with everyday.

We have observed that resilience building in the public health sector starts with a willingness and capacity to change – for whatever reason that may be. Our tool facilitates the information gathering and lays the foundation for an impact assessment, giving health professionals a defensible starting point and powerful communication tool on the local impacts of climate change on their patients.

2. What can healthcare professionals gain from learning about the risks of climate change, and your work specifically?

After our detailed research is complete, we step back and look for hotspots and correlations. Do future heat waves and poor air quality pose a considerable health risk to the community? Which patients are most exposed and where do they live? Is there a strong poverty-health connection in the community? How likely is it that heavy rainfall will become more severe over time and affect ambulatory services and hospital access?

These are the questions we try to address in our work so that hospitals can prioritize their resilience efforts and reach out to certain parts of the community or strengthen parts of the facility.

Many healthcare professionals are aware of these climate-related risks and their connection to the communities they serve, but this work helps outline the linkages that connect climate change and health at a local level and assigns real numbers to the expected impacts of that dynamic connection.

3. What trends are you seeing at the nexus of human health and climate change?

Human health has always been influenced by climate and weather, but the growing frequency of extremes like drought and flood and extreme temperatures generates a whole new set of challenges. Take, for example, the recent spread of the Zika virus and the drought-flood cycles that led up to heavy downpours across much of Brazil, leaving pools, puddles, and ponds for mosquito breeding, and allowing the Aedes spp. mosquito to surge across the country and eventually the rest of the Americas.

Unfortunately, changing rainfall patterns, like many climate impacts, tend to have a disproportionate effect on the vulnerable. A similar story can be told about oppressive heat. Global temperature increases also mean more severe extreme temperature, and recent heat waves in India, Russia, and even the U.S. hit the poor and outdoor laborers the hardest. Changing weather patterns and shifting climate zones will also expose new populations to these extremes.

Health effects are not always physical, and there is growing research showing the association between mental health and climate change. For illnesses like Lyme Disease or West Nile Virus, the mental health effects are very direct, but more often, the psychological responses to both disasters and acute ongoing impacts can induce a range of mental health consequences. I think the discussion around mental health and climate change will continue to grow as public health officials work to identify vulnerable populations and decipher the attribution of things like severe heat, poor air, and disasters to well-being.

There are positive trends, however, in the way researchers and public health officials are tracing vulnerability and identifying pathways of exposure. The body of research at the nexus of public health and climate change is growing, and one of the most promising outcomes of this work is the story it tells. From hospital directors to policymakers, decision-makers understand that our community’s health calls for aggressive action on the public health front to minimize and respond to a range of imminent new threats that were once uncertain or distant.

Insights in Resilience: Local Government and Adaptation

We reached out to Aleka Seville, our Director of Community Adaptation, and asked her about what makes a resilient community.
Aleka’s responses speak to the intersections between public planning, hazard response, and the measuring and reporting the effectiveness of adaptation solutions. Learn more about how we are partnering with governments to build resilience and prepare for the impacts of climate change from our partner page.
1) What makes a community resilient?

While our shared definitions of resilience are typically quite broad, one of the factors that I see as a major enabler of resilience is the “mainstreaming” of adaptation planning – accounting for climate change impacts in nearly every public planning process, from hazard mitigation to general and capital planning.

Communities that commit to assessing climate risk within existing planning processes are able to build on existing frameworks and, sometimes, tap existing budgets, to mitigate these risks. Incorporating resilience goals and metrics into current planning processes sets the stage for critical cross-agency coordination when implementing adaptation solutions.

Local Resilience

2) Where should a community start when developing an adaptation plan or resilience strategies?

At Four Twenty Seven, we talk about the “Adaptation Learning Curve” when deciding how we can best assist a community or organization in building resilience. Key to this discussion is an understanding of where the community is starting from and where they’d like to go based on their unique vulnerabilities, climate risk exposure, and adaptation goals. It’s difficult to make progress or prioritize resilience building without first understanding and raising awareness about the problems at hand. Therefore, we often begin by offering customized training and education activities to help communities engage key stakeholders and build support for action from the very start.

3) How can you tell if a community is making progress in building resilience?

Resilience is indeed a journey – one that looks different for every community. Given jurisdictional responsibilities and limitations, cities, counties, regional agencies and states all have a role to play in creating stronger, more resilient communities. The hard part is effectively coordinating those efforts. While a specific community could be making progress towards their unique resilience goals, if these goals are not informed by the efforts of other local agencies, this is a real risk of investing in maladaptive efforts. We challenge the communities we work with to think beyond their own jurisdictions when developing resilience goals. Those goals can then be informed by metrics that reflect not only what is happening within that community, but how those efforts contribute to resilience on a broader scale.

From Data to Action: Climate Adaptation in 2015

I remember 2014 as the year of climate science. The unfolding of the IPCC Fifth Assessment Report, and, in the US, the publication of the National Climate Assessment and the first Risky Business report brought to new levels our collective understanding of how devastating climate change would be for human and natural systems.

2015 saw growing recognition of the economic risk brought about by climate change – coming not just from the community of dedicated climate activists that have been raising the alarm for years, such as C2ES, Ceres’s Investor Network on Climate Risk (INCR), and the CDP, but this time coming from the world’s largest and most influential financial players.

Financial Risks of Climate Change
Mark Carney, describing the financial risks of climate change as “the tragedy of the horizon.”

A few key reports stand out: Mercer’s study on Investing in a Time of Change, Standard and Poor’s warning of climate change impacts on corporate and sovereign risk ratings, and Bank of England Governor Mark Carney’s famous speech on the “tragedy of the horizons.” All these studies, punctuated by a slew of catastrophic extreme weather events across the globe, point to the devastating systemic costs to our economies and our communities if we do not better prepare and adapt to climate change.

This alarm is starting to turn into action and concrete steps. Just in the past weeks, the Financial Stability Board, also headed by Mark Carney, announced an industry-led task force headed by Michael Bloomberg to develop voluntary, consistent climate-related disclosures in financial markets. The United Nations announced a private sector Working Group headed by private equity firm SigulerGuff to mobilize private sector investment in climate adaptation and resilience. The United Nations Global Compact and Caring for Climate launched a report providing concrete guidance and a conceptual framework on how corporations can adapt to climate change while helping reduce social and environmental vulnerability. What these initiatives speak to is the need for standardization in how we measure, quantify and disclose climate change risk.

In the public sector, Governments have a key role to play in supporting private sector-driven initiatives to build social resilience and grow technological and financial solutions. 2015 saw governments treading new waters with regard to climate risk and resilience. In California, Governor Jerry Brown issued Executive Order B 30-15 directing state agencies to identify vulnerabilities by sector and to infrastructure and property. The City of San Francisco established the first-in-the-nation mandate to assess infrastructure risk posed by sea-level rise, promptly echoed by a similar mandate from President Obama for all federal agencies. The White House also worked to empower and challenge the private sector to develop new data-driven tools for climate adaptation through the Climate Data Initiative. And finally, the Paris agreement negotiated during COP21 includes extensive provisions to finance and implement climate adaptation measures.

The challenges ahead of us remain tremendous – deepening our understanding of how to best forecast and quantify social and economic impacts of climate change, measuring progress towards resilience, developing common metrics of success are only the very first steps towards bridging the adaptation gap. I believe 2016 will see critical new developments to help the world prepare and adapt to climate change. We’re ready for the challenge.

Emilie Mazzacurati, December 18, 2015.

COP21: Climate Adaptation in the Paris Agreement

b9f7640e54975ccb-a6ddcAt the 21st session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change in Paris, France, 196 countries reached a landmark climate change agreement, which for the first time puts in place a regular, iterative process for evaluating progress and enhancing actions.

In 2018, Parties to the Convention will reconvene for a global “facilitative dialogue” to assess collective progress on achieving mitigation targets. This will be followed by a periodic global stocktake to gauge collective progress on mitigation and adaptation goals, including the state of overall adaptation efforts, priorities, and the efficacy and adequacy of support. The first global stocktake will be conducted in 2023; it will then take place every five years. (See the World Resources Institute’s blog for more information.)

The Paris Agreement also seeks to strengthen adaptation efforts under the Convention and, together with the accompanying COP decision:

• Establishes the adaptation goal of “enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change.”

• Calls on countries to carry out national adaptation planning processes, which may include assessing climate change vulnerabilities and impacts to inform prioritization of actions, implementing actions to adapt and build resilience, and monitoring, evaluating, and learning from adaptation plans, policies, programs, and actions.

• Requires each country to submit and periodically update an adaptation communication, which summarizes adaptation priorities, efforts, and support needs.

• Encourages international, regional, and financial institutions to report on their efforts to integrate climate resilience considerations into their development assistance and climate finance programs.

• Urges developed countries to increase adaptation support and extends the timeframe for mobilizing $100 billion annually for climate change from 2020 to 2025; a higher funding target will be set after 2025. Developed countries have pledged $19 billion to assist developing countries, and the US has indicated it will double its support for adaptation to $800 million a year by 2020. Vietnam has also pledged $1 million to the Green Climate Fund, and various subnational entities, including Paris and Quebec, have committed funding to mechanisms such as the Least Developed Countries Fund.

• Requests that the Green Climate Fund provide expedited support to developing countries to prepare national adaptation plans and implement the priority actions identified in these plans.

For questions about international climate adaptation and climate finance, contact our expert Yoon Kim.

 

 

Do Federal Agencies Address Climate Risk in the Supply Chain?

The United States Government Accountability Office (GAO) recently released a report on how federal agencies are identifying, evaluating and addressing the impacts of climate change on their supply chains and suppliers.

Current efforts to build resilience in federal agencies

The report set out to identify the key challenges facing 24 surveyed federal agencies who where responsible for 98 percent of procurement budgets in 2013-2014. The agencies included the Department of Defense, the Department of Homeland Security, and NASA. The report was prompted by a question from Congress.

The report surveys how and whether federal agencies have planned for climate change disruptions in their adaptation plans. Indeed, in November 2013, Executive Order 13653 established a directive to these organizations to build adaptation and resilience measures into their organization: “In doing so, agencies should promote:

(1) Engagement and strong partnerships and information sharing at all levels of government;

(2) Risk-informed decision-making and the tools to facilitate it;

(3) Adaptive learning, in which experiences serve as opportunities to inform and adjust future actions; and

(4) Preparedness planning.

Few agencies are planning for climate risk in the supply chain

The report found 25 percent of agencies surveyed did not include climate risk to the agency’s supply chain, and most agencies had only included some information – general or agency-specific risks. Only three agencies had gone as far as identifying potential agency-specific actions, and one had a long term plan and strategy to address those risks.

GAO Analysis of agencies' climate adaptation plans
GAO Analysis of agency climate adaptation plans

Knowledge gaps and lack of tools are the biggest barriers

The report outlined some of the barriers to action on building resilience, citing hurdles such as planning timelines not aligning with federal budget cycles, a lack of institutional knowledge on best practices for assessing risk, and a lack of cross agency coordination to integrate adaptation strategies into shared supply chains.

It also identified information asymmetries about how adaptation success is measured as a hurdle for federal agencies. Of the 24 federal agencies surveyed, only four identified agency specific actions around building supply chain resilience. One in 24 had gone as far as mentioning budget needs to achieve their goals, and seven out of 24 did not attempt to identify the risks of climate change on their supply chains, feeling intimidated by “a lack of defined best practice.”

Getting over the barriers

Supply chains raise complex issues for organizations trying to prepare for climate change. The lack of visibility of supplier location and vulnerability make it difficult to fully assess risks, let alone identify effective measures to address and prevent or mitigate those risks.
At Four Twenty Seven, we have created tools to help large organizations in the government and private sector identify hotspots and quantify climate risk exposure in their supply chain. Learn how we can help your organization map risk across commodities and suppliers and build resilience into your organizational framework.

Capturing the Business Risks of Climate Change

Climate change presents real challenges and costs for business operations. Both large and small organizations are susceptible to liability costs and direct disruption of their operations from extreme weather, rising global temperatures, and the climate change.

Solutions do exist to help monetize and prioritize adaptation and resilience strategies that can protect the bottom line.

Nik spoke at the 2015 Industrial Environmental Association about how Four Twenty Seven is working to help business and industry understand the costs of exposure to a changing climate.