Helping businesses thrive through the climate change transformation

Australian businesses must adapt to the economic transformation caused by climate change if they want to remain successful, according to new research.

The Business Council for Sustainable Development Australia’s (BCSD Australia) latest report said companies needed to prepare for both the physical risks associated with climate change, as well as the transitional risks on the path towards a net-zero economy.

This report said Australia’s response to climate change will inevitably reprioitise economic activities, because of changing policy, different consumer habits and business action.

“Successful businesses will be the ones that are able to adapt and thrive through the transformation,” the report said.

BCSD Australia CEO, Andrew Petersen, said businesses had an important role to play in the transformation.

“The delivery of the Paris Agreement objectives and the Sustainable Development Goals depends on the ability of businesses to connect climate, nature and people to assure a resilient future for business and society,” Petersen said.

“In response [to the economic transformation] Australian companies will need to adopt resilience strategies that include ambitious mitigation measures to adapt to climate change impacts, as well as steps to strategically transform so that they can benefit from new opportunities and address unprecedented risks.”

The report highlights several steps businesses can take to enhance their climate resilience.

This includes developing mitigation strategies to become less vulnerable to disruptive risks posed by climate change, such as policy and legal measures, resource scarcity or fluctuating markets.

The report also said businesses should assess climate-related physical risks throughout their operations, supply chains and the communities they operate in.

Overall, the report said businesses must factor climate action into all their decision-making processes.

“This report’s focus is therefore on helping business to understand, assess and act, based on physical and transition climate-related risks,” Peterson said.

“Measures such as enterprise risk management and transformation to resilient business models are key elements in building business climate resilience.”