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Contents
Introduction Section 1: Assessing the impacts of a changing climate Section 2: The business case for adapting to a changing climate Section 3: Climate change projections for the 21st Century Section 4: BACLIAT Workshop Section 5: Threats and opportunities for all sectors arising from a changing climate
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Examples of Sectoral Impacts 19 Building design and construction 22 Business, e.g. Motor manufacturing 25 Section 6: Further support 28
Introduction
The weather already significantly affects economic activity. As the climate changes, all sectors of UK business will be faced with preparing for a range of new threats and opportunities.
This report presents an overview of climate change impacts and shows how the BACLIAT tool can be used in a workshop setting to help businesses and organisations adapt to the changing climate. BACLIAT is aimed at business managers as well as those in business-facing organisations and is based on practical experience of working with businesses. The BACLIAT process can also be tailored to suit the needs of non-business organisations. Originally developed by UKCIP, BACLIAT has been updated and incorporated into the Environment Agencys Climate Ready Support Service.
BACLIAT can be used at the level of a single organisation or an entire business sector. It recognises that a changing climate affects all business areas, and not just the more obvious ones of product design or service delivery. BACLIAT invites consideration of the opportunities as well as the threats from a changing climate, under the following headings:
logistics: vulnerability of supply chain, utilities and transport infrastructure finance: implications for investment, insurance and stakeholder reputation markets: changing demand for goods and services process: impacts on production processes and service delivery people: implications for workforce, customers and changing lifestyles premises: impacts on building design, construction, maintenance and facilities management management implications: identification of key areas of action and activities required
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The basis of all climate change impacts assessment is to consider the expected changes to the climate and ask the question: What will this do to my sector or business?. Using your own knowledge or that of other specialists, you can then suggest what will be the likely threats and opportunities of different climatic conditions. In speculating about future impacts it is useful to start by considering how weather currently affects your operations, and those of your competitors and sector. These initial assessments of impacts can form part of the first tier of the risk-based approach to decision making. It is important to keep a record of the assessment process so that it can be revisited and reviewed as part of a robust risk assessment process. Example assessments for generic impacts on sectors can be found in Section 5. Before you can begin your BACLIAT assessment you will need to define the context for your enquiry.
The context is defined under these seven headings. time: over what time period are you interested in the climate impacts? location: where are you interested in finding out about climate change impacts? greenhouse gas emissions: how should you take account of different projections for greenhouse gas emissions? sector: which sector(s) are you considering? socio-economic outlook: what will the UK and your sector look like in the time period you are considering? business areas: which business areas within your organisation are at greatest risk? climate variables: which are the important climate variables when considering climate impacts? Business organisations are encouraged to make use of a risk-based approach to decision making, particularly where long-term planning or investment is involved.
An understanding of the likely business risks and opportunities, and why a planned approach should be taken is also required (see Figure 1). Some companies will also be driven to adapt by regulatory and other requirements.
Other requirements that could drive business adaptation include: planning policy thresholds within contracts or service level agreements (for example, a facilities management company being required to guarantee they will not close the building for more than 3 days in a year) requirements for contractors to local authorities that have adaptation as a local priority Potential future requirements include: updating of industry codes and standards to take account of the changing climate legal upper temperature limit for workplaces requirements of insurers or insurance products that take account of the climate risk
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3. Retrofitting is often more expensive. Maintenance programmes, new buildings or the replacement of old equipment represent an opportunity to take account of the future climate even if no impacts are currently being felt. Although there may be costs associated with this, in many cases it is likely to be cheaper in the long run. 4. Planning ahead is still possible in the face of uncertainty. It is true that there is considerable uncertainty surrounding future climate impacts. A risk-based approach allows you to make decisions in the face of uncertainty and is more likely to lead to efficient adaptation.
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Environmental risk Operational risk Financial risk Health & safety risk
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Figure 1: Building the business case for adaptation. Image adapted from UKCIP Changing climate for business, 2010.
In the UK climate change is expected to mean the following: Changes to the long-term/seasonal averages: generally warmer, drier summers milder, wetter winters rising sea levels Changes in extremes: more very hot days more intense downpours of rain fewer days with frost
UK Climate Projections (UKCP09) http://ukclimateprojections.defra.gov.uk give projections for a range of climate variables at a resolution of 25 km across the UK. Projections are made for three emissions scenarios (High, Medium and Low), which make different assumptions about future technologies and economic growth, and therefore the levels of greenhouse gas emissions we can expect.
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Winter
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Summer
Figure 2: Change in winter and summer precipitation for the 2050s (20402069) under the High emissions scenario. Image UK Climate Projections 2009
Summer
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Change in summer mean temperature (C) for the 2050s, High emissions scenario
Figure 3: Change in summer mean temperature for the 2050s (20402069) under the High emissions scenario. Image UK Climate Projections 2009
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Table 1: Estimated annual number of warm days (temperature greater than 25C) (High emissions scenario, central estimate)
Baseline (19611990) 15 1 3
2040s 50 3 21
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High emissions
Low emissions
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0 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Year
Figure 4: Temperature change associated with High and Low emissions scenarios over the 21st century. Image UK Climate Projections 2009
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140 120 100 80 60 40 20 0 1990 1920 1940 1960 1980 2000 2020 2040 2060 2080 2100
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Figure 5: Projected number of hot days (>30C) and heavy rainfall days (>100 mm/day) in Asia Source: Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, 2007. M.L. Parry, O.F. Canziani, J.P. Palutikof, P.J. van der Linden and C.E. Hanson (eds), Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. http://www.ipcc.ch/publications_and_data/ar4/wg2/en/figure-10-2.html
The objective of this workshop is to draw upon employee knowledge to brainstorm potential future impacts of climate change on a business, organisation or sector. You can run BACLIAT workshops: at an individual company within departments/divisions of larger organisations for a sector group to raise awareness of a group of business managers from several companies You can expect the following outcomes: increased awareness of the range of threats and opportunities that climate change could bring, many of which will not have been experienced in the past a good idea of how climate risks are spread across different business areas You will be in a better position to: carry out a climate change risk assessment
The workshop process has four steps: 1 Underpinning knowledge Before the workshop, make sure you understand how the climate is likely to change and the difference between climate and weather 2 Preparing for the workshop Make sure you have everything you need to deliver a successful workshop 3 Running the workshop Step by step guide to how to deliver the workshop 4 After the workshop Thoughts and ideas about how to use the meeting outputs to contribute towards developing strategy and policy
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BACLIAT Business Areas BACLIAT uses a set of six generic business areas, developed in partnership with a range of UK trade associations and professional bodies. These six areas are designed to be applicable to any type of business or sector. Under each there will be several potential threats and benefits for your business arising from climate change. The six areas are:
more very hot days and heatwaves Markets more intense downpours of rain Process a possible increase in storms in the winter Logistics Before you start assessing the potential impacts of future climate change, it is important to be clear on the difference between weather and climate. Climate describes the average and variability of weather over an extended period (usually 30 years). The weather describes what is happening at any point in time including events such as heatwaves, rain, snow, sleet and high winds. In most cases it is extreme weather events that affect businesses rather than climate trends. People Premises Finance The six headings and some generic impacts are given in Table 2. Running the workshop will uncover impacts specific to your business.
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Section 4: continued
Generic impacts Increasing or decreasing demand for some products and services New requirements of existing products and services Emerging markets for new products and services Changing customer behaviour Marketing opportunities Unable to satisfy increased demand or segments of the market Competitors position enhanced or reduced by climate change Advantages for early movers in response to changed markets and lifestyles Impacts on climate-sensitive processes or equipment Impacts on climate-sensitive activities Exceedence of limits set out in policies, procedures or contracts Disruption of supply chain due to transport disruption Disruption of supply chain due to impact on suppliers Disruption of supply chain due to raw material price or availability Disruption to utilities supply Changing packaging or distribution process requirements Impacts on thermal comfort of employees Impacts on thermal comfort of customers, suppliers or others Impacts of inclement weather on outdoor staff Recruitment-related issues Business implications of climate-driven social trends Damage or degradation of building fabric Impacts on the internal environment Impacts on the outdoor environment Insurance related issues Investment related issues Potential new liabilities
Process
Logistics
People
Premises
Finance
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Section 4: continued
The Workshop Explain the purpose of the workshop. If you are planning to use it as a starting point for a climate risk assessment, explain where it fits into the bigger picture. Provide participants with the headline climate change messages. Explain that you are going to look at how to live with the changing climate (adaptation) and how it is different from reducing greenhouse gas emissions (mitigation). Ask participants to think about the first business area, e.g. Markets. What are the opportunities and challenges the organisation will face in the future as a result of the changing climate? Encourage participants to think of things that have happened in the past and could become more frequent with climate change as well as more imaginative suggestions of impacts that have not yet happened. On post-it notes, ask participants to write their thoughts and stick them on to the sheet in the appropriate column. As the number of post-its builds, think about grouping similar thoughts together. Repeat the process for each of the theme headings. Once the group has grasped the idea, you could try completing 2 sheets at a time. Dont worry about ideas being captured under the wrong headings. Similarly it does not matter about duplication, as this can be tidied up before the information is used as part of a climate risk assessment or other study. Once all the sheets are completed, give participants a limited number of sticky dots. Ask them to vote with the dots for the ideas that are the most urgent to tackle for the business / organisation, or some other criteria that suits your requirements. Use the results of this dotmocracy to form the basis of a management response, which could include the adoption of climate risk in policies and process such as marketing, facilities management, process efficiency, business resilience planning, insurance, investment, risk registers etc.
Who to invite The wider the range of participants involved (for example representatives from different business area, functions, locations, responsibilities etc.) the richer the output will be. Give yourself about an hour though larger companies or those with a wide variety of location or activities may need longer.
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Section 4: continued
You may also find value in developing a list of climate risks that include past events and events that will continue to happen as climate changes (at a decreased on increased frequency) as well as potential impacts that have not yet been experienced. Now that you have some idea of how climate change could affect you, you may wish implement a risk assessment to identify a set of priority climate risks or you may wish to use the workshop outputs as part of a more rigorous approach to developing an adaptation plan or strategy, for example by using the Adaptation Wizard.
Management Actions
Threats
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Section 5: Threats and opportunities for all sectors arising from a changing climate
The table below shows just a few examples of typical impacts that the BACLIAT workshop can reveal. They can be applied to virtually all business sectors, but should not be treated as definitive nor comprehensive assessments of the climate risks for business.
Logistics: vulnerability of supply chain, utilities and transport infrastructure
Threats Vulnerability of supplies of goods and services (e.g. raw materials, components) Disruption to utilities, especially electricity supply, water supply and sewerage Vulnerability of transport and delivery systems for goods and services in and out Examples of potential impacts Agriculture: increased demand for water in summer but supply vulnerable in hotter, drier summers Retail: transport systems vulnerable (e.g. floods, landslips) for delivery of products to retail outlets Manufacturing: disruption to production through failure of electricity supply from storm damaged power lines. Manufacturing: vulnerability of just in time delivery systems to disruption in transport (see retail above) Opportunities Maintaining supply and transport of goods and services through awareness and adaptation planning Create secure systems of water storage and electricity generation on site
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UK Climate Projections (UKCP09) UK Climate Projections (UKCP09) provide probabilistic information on expected changes in the UKs climate at a regional level throughout the 21st century. http://ukclimateprojections.defra.gov.uk The UKCP09 package also includes a Weather Generator, which enables users to estimate the increasing (or decreasing) frequency of specific weather types such as heatwaves or heavy downpours of rain. The Weather Generator is available through an online facility enabling users to access the information at different levels of detail and to customise it for their purposes.
GOV.UK All government services and information will be transferred to a single website by March 2014. Search or navigate through topics, departments, policies, news and publications. Please note that this is a work in progress, and will change over time. www.gov.uk Business in the Community (BitC) Business in the Community is a membership organisation that aims to mobilise business for good. www.bitc.org.uk/environment/issues.html Confederation of British Industry (CBI) The CBI is the premier lobbying organisation for UK business on national and international issues. It works with the UK government, international legislators and policymakers to help UK businesses compete effectively. It has a programme of work on climate change led by its group of energy and climate change experts. www.cbi.org. uk/business-issues/energy-and-climate-change Federation of Small Business (FSB) FSB is a campaigning pressure group promoting and protecting the interests of the self-employed and owners of small companies. In addition to its lobbying role, it offers a wide range of services to business. www.fsb.org.uk
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Section 6: continued
Department for Environment, Food and Rural Affairs Climate change partnerships in the UK (Defra) Defra takes the lead on adaptation to climate The English regions and the devolved administrations change in the UK. Its website provides a useful all now have climate change impacts partnerships overview of climate change adaptation and outlines the that bring together local stakeholders who share an governments approach for developing policy in this interest in climate change issues. The partnerships area. www.defra.gov.uk/environment/climate/adapting. share information and provide a focal point for action Content from Defra will be moving to GOV.UK in 2013, on climate change in their communities. Some focus only please see www.gov.uk/government/organisations on climate change impacts and adaptation, while others /department-for-environment-food-rural-affairs also incorporate work on climate change mitigation. Links to these partnerships can be found on the Climate Adaptation is a devolved issue and the devolved UK website. www.climateuk.net administrations are developing their own programmes. Climate UK is the national network of climate change http://wales.gov.uk/topics/environmentcountryside partnerships which seeks to maximise the benefit of the /climatechange/?lang=en work of each partnership. www.scotland.gov.uk/Topics/Environment Intergovernmental Panel on Climate Change (IPCC) /climatechange The Intergovernmental Panel on Climate Change (IPCC) is the leading international body for the assessment www.doeni.gov.uk/index/protect_the_environment of climate change. It was established by the United /climate_change.htm Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO) to provide Department for Energy and Climate Change (DECC) the world with a clear scientific view on the current DECC was created in 2008 to bring together the state of knowledge in climate change and its potential governments climate change and energy policy areas. environmental and socio-economic impacts. It leads on work to reduce greenhouse gas emissions and www.ipcc.ch on international adaptation initiatives. www.decc.gov.uk and www.gov.uk/government/topics/climate-change
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