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and Minimising Risk
A Changing Climate for Business
Climate change exposes businesses to an array of risks
Many risks and opportunities are already present:
the opening up of new markets and services
the emergence of new legislation
the occurrence of climate-related impacts
However, the future evolution of risks and opportunities
related to climate change is hard to quantify, making
them difficult to include in formal business and strategy
Furthermore, the emergence of "new" risks and
opportunities makes it problematic to make judgements
based on past experience.
Climate Change and Adaptation
Climate change is often presented (in the mainstream media) as a serious
threat to humanity. It also involves substantial uncertainty, and is perceived as
an environmental or “green” issue, and as a “global” problem, with negative
impacts that will occur many years in the future, often in distant locations
rather than locally.
There is a widespread lack of understanding of climate science and climate
change projections, and there are extensive misconceptions in the
community about the nature, causes and consequences of climate change.
Further, there is substantial scepticism about climate change, with beliefs that
climate change is not real or not extensive, that it is not the result of human
activity, and that the proposed responses to climate change are a more
substantial risk to society than the potential impacts of climate change.
Adaptation to the potential impacts of climate change requires a strong
focus on long-term, “strategic” thinking, and many people, groups and
businesses tend to use much shorter planning horizons and more “tactical”
Climate Change and Engagement
• Information about Climate Change
• Assessment of local capacity and potential impacts
• Conducive group values, culture and social
• Capacity for strategic planning
• Clear understanding of climate change
• Understanding of own climate change vulnerability
• Sense of responsibility for developing a solution
• Willingness to engage in adaptation planning
• Misinformation, uncertainty and scepticism
• Negative emotional reactions
• Expectations that a solution will be provided
• Lack of Resources
The link between adaptation issues
and stakeholder engagement
Adaptation to climate change is highly contextualised.
Eg. Adaptation required by a metropolitan coastal community (where
increases in sea levels and storm surges will have implications for
building codes, infrastructure planning and emergency management)
is quite different to the adaptation to climate change required by
dairy farmers (where changes in temperature and rainfall will have
implications for feed and water supply).
No single adaptation approach can work in all different contexts
– rather, the adaptation required will vary markedly between
different groups of stakeholders, whether these stakeholders
represent communities, industries or regional areas.
Relatedly, all adaptation efforts will provide useful local benefit to
those undertaking them, by improving capacity to avoid
negative impacts, to minimise their effects, or to recover from
them more swiftly.
The link between adaptation issues
and stakeholder engagement
Adaptation will require substantial changes in local
Such changes have a much better chance of being
appropriately planned, broadly accepted, and
consistently maintained if they originate in a
process that involves engagement rather than a
“top-down” process where adaptation is imposed
from outside without consultation or interaction
given the highly contextualised nature of
Why Engage and Communicate?
Communicating how a company is managing climate
change - how risks are minimised, opportunities
exploited and solutions developed - is a crucial
element of value creation.
Communicating its approach to climate change can
help distinguish a company from the competition and
offers opportunities to gain competitive advantage.
Clear communication of businesses' views, strategies
and actions on climate change, and evidence that
they have engaged with and understand the concerns
and priorities of their stakeholders, can be the most
important factor in determining the future sustainability
of a company.
Carbon Disclosure Project
A company's Disclosure Index score "reflects the
comprehensiveness of a company's response in terms of the
depth and breadth of its answers."
Given the blend of certainty (that there are risks and
opportunities associated with climate change) and
uncertainty (about their nature, timing and scope), engaging
relevant stakeholders, is often considered key to success.
Stakeholders bring different perspectives, values and
expectations that can help a business build a better
understanding of the nature and scope of the climate risks
and opportunities, and how best to approach them. Ensuring
a broad range of perspectives is considered increases the
likely acceptability, as well as the effectiveness, of any
Engagement in Practice
In practice, there are many ways in which businesses may
choose, or are in some cases required, to engage with
stakeholders and communicate progress on climate change.
This could include awareness and communication to all
stakeholders of what climate change means, how it impacts on the
business, what measures have already been taken, which staff are
responsible and what future initiatives are planned.
2. Good practice examples.
Most businesses will have particular activities and actions
associated with climate change that they are proud of, but not all
of them necessarily communicate this effectively to their
stakeholders. Reporting best practice is particularly powerful for
businesses that are project-based, as it allows successful aspects of
different projects to be showcased.
Engagement in Practice
3. Risks and opportunities.
Anticipating the risks and opportunities presented by
climate change has become an important part of
business planning. Which risks and opportunities are
considered significant or important varies considerably
from business to business, making it crucial to engage
staff, management and external stakeholders.
4. Behavioural change.
Perhaps the ultimate goal for any company who wants
to take a real lead on climate change issues is to
become established as thought leader that can effect
wider behaviour change.
Definitions in the stakeholder
Any manner of information sharing with stakeholders, generally
through one-way, non-iterative processes
The process of gathering information or advice from stakeholders
and taking those views into consideration to amend plans, make
decisions or set directions
An exchange of views and opinion to explore different
perspectives, needs and alternatives, with a view to fostering mutual
understanding, trust and cooperation on a strategy or initiative
An organisation‟s efforts to understand and involve stakeholders
and their concerns in its activities and decision-making processes
Increasing sophistication in
approaches to engagement
Communications via one-way channels
designed to spread information
• TRUST US
Consultation and dialogue via
• SHOW US
Partnerships that create value and are
focused on finding solutions
• INVOLVE US, HEAR US
What are the challenges when
engaging with stakeholders?
To communicate science to multiple audiences in a
To gain the financial resources to engage with a variety
To balance the respective interests of the different
stakeholders involved in a process
To not influence or shape the responses of the
stakeholders and undermine the credibility of the
To recognise knowledge disparities between
stakeholders when assessing their inputs – so as not to
favour one stakeholder‟s arguments over another
Stakeholder Issues to consider
Stakeholders engage because they do not want to
They want themselves or their organisations to be
They feel valued by being asked
They feel that by „having a voice‟ they may be
able to exert more control
They can find out more about the topic under
They can promote their organisation
They can make new contacts and network
Better engagement on climate
Address gaps in knowledge:
Recognise that lack of understanding and misconceptions about climate
change will result in the fact that some engagements will simply involve
Be honest about the uncertainty involved in climate predictions, but try to
simplify this by identifying what is common to the different scenarios and
projections, and by drawing comparisons to uncertainties in other areas
Engage intensively with influential members of the community to combat
scepticism regarding climate change. It is important to provide messages that
directly address the claims and arguments of sceptical individuals
Address emotional reactions:
In discussing climate change issues, especially in the process of promoting
notions of personal vulnerability, individuals may feel helpless and/or fearful.
These feelings can be overcome by identifying positive and tangible actions
and by encouraging stakeholders to focus on being part of a collective
Sustainability managers, who understand the issues and
the need for stakeholder engagement, would not be
expected to have extensive communications
experience or know what tools are available
Dedicated communications and PR staff might typically
have relatively little experience of stakeholder
engagement and no in-depth understanding of climate
What results is a „knowledge gap‟ between those who
know about climate change and those who know
about communications. For some organisations, this gap
might hinder their future progress on climate change.
What is important?
Transparency - there will be a growing requirement
for solid information and data to support corporate
Product knowledge - particularly with regard to the
origins of raw materials and their processing and
Traceability - stronger link between sustainability
performance and the physical reality of processes
and location, e.g. extraction, production
Collaboration - using multi-stakeholder participation
is crucial to build trusted, fact-based evaluative
criteria and systems.
Maintain contact and feedback:
People become cynical about engagement if decision makers do not communicate
how participants‟ input and suggestions were taken into account. Try to ensure that all
parties receive something from participation in the engagement process.
Plan evaluation from the outset:
Set priorities for outcomes, establish performance metrics, and be mindful of the scale
of the targeted change. Collect baseline data so that change can be measured.
Ideally, all adaptation projects undertaken should draw on a single evaluation
Evaluate both process and outcomes:
When evaluating engagement, measure both process (the way in which engagement
was done) and outcomes (what was achieved from the engagement process).
Acknowledge other impacts:
Accept that any measured changes in the engaged group might have many sources
apart from the engagement process. Ideally, invest in a specific methodology for
evaluation, to establish an agreed and consistent set of measures for all engagement
related to climate adaptation.
Next Generation Consultants
Specialists in Sustainable Development and
Reporting, Stakeholder Management and Human
Tel: (011) 2750315