The Resilience Imperative
Resilience, sustainability, and decarbonization: New priorities for corporate strategy.
Why
is climate resilience necessary and urgent?
Climate resilience and sustainability are CEO and board agenda items, now and for the next 30 years. The rigor of climate-related risk disclosure is fast approaching that of a financial statement.
Investors led by sovereign funds are withdrawing from long-term investments at risk from climate change. These funds are governed by fiduciary duty to safeguard portfolios, which influences capital deployment in at-risk industries and "climate laggard" firms.
Preferred by investors.
Awareness of corporate behavior is at an all-time high. Every consumer is experiencing the impact of climate change, biodiversity loss, and the impact of the pandemic. As a result, consumers are increasingly choosing to buy sustainable products and services. Likewise, responsible firms recognize that sustainability is good for business.
Sought by consumers.
Regulators in several countries and economic markets [and counting] have established standards and requirements for sustainability reporting. Firms face increased scrutiny of the data presented, the disclosed impact of climate change on a corporation and its stakeholders and planet [double materiality], and increased reporting frequency. The rigor and accountability of sustainability disclosures are evolving to that of a financial statement.
Required by regulators.
What
challenges are firms facing for the foreseeable future?
Companies face the perfect storm - the demand for sustainability talent, insufficient execution capacity, evolving disclosure requirements, and increasing climate-related risks.
A secure location to manage, analyze and blend climate data with corporate financials.
Climate risk and sustainability data is not explicitly recorded, and it is often derived from other data across business units, systems, and external third parties.
With the upcoming regulatory and capital market demands, the need for verifiable data will strain existing IT budgets and capacity, and data governance capability.
The major challenge faced by companies is the alphabet soup of multiple standards and frameworks, the rapid evolution and amalgamation of standards bodies, and the rework required to collect, analyze and report data as these changes occur.
The Climeverse data model is granular by design, allowing for significant future proofing of standards evolution.
Evolving standards and frameworks.
The demand for sustainability professionals has skyrocketed, the education system cannot keep up with demand, and the reliance on expensive external staff is increasing.
Climeverse has codified climate related knowledge into its platform to insulate clients from labor shortages and help clients scale their climate change programs globally.
Scarcity of qualified sustainability talent.
How
can technology and data enable climate resilience?
Climeverse takes a systems approach to climate resilience by codifying an expanse of corporate business structures, supply chain, financial, risk, audit, etc., into an enterprise platform.
Climate change touches several aspects of an organization, internally and throughout its supply chain and customer ecosystem.
Climeverse empowers companies to collaborate on climate resilience initiatives globally with partners, suppliers, customers, and investors.
Platforms scale at lower cost.
Several decades of corporate experience is embedded in the design, including multi-hierarchy management that provides visibility from the boardroom to boilers and boots on the ground (top to bottom) and a departmental view across front, middle and back offices. Climeverse is corporate climate resilience out of the box.
Software that maps to your business, not the other way around.
Organizational climate resilience maturity is spread over a vast spectrum. Some firms are just beginning the journey, others have put in a modest effort, while a select few have made it integral to their business model.
Climeverse recognizes these different starting points and enables organizations to ramp up quickly regardless of current maturity.
Build climate capability in your firm.
Where do companies start?
Risk Assessment: Corporations should conduct a comprehensive risk assessment to understand the potential impacts of climate change on their operations, supply chains, and stakeholders. This includes identifying physical risks, such as damage to infrastructure and property from extreme weather events, as well as transition risks, such as changes in regulations, market conditions, and consumer preferences. A thorough risk assessment helps identify the areas of highest vulnerability and the most effective adaptation strategies.
Adaptation Planning: Based on the results of the risk assessment, corporations need to develop adaptation plans that prioritize actions to reduce their vulnerability to climate change. Adaptation planning involves identifying and implementing measures to reduce the risks, such as building climate-resilient infrastructure, diversifying supply chains, or developing new products and services that are less vulnerable to climate change impacts. Adaptation plans should be flexible and regularly reviewed and updated to respond to new information and changing conditions.
Implementation and Monitoring: The final step in building climate resilience for corporations is implementing the adaptation plans and monitoring their effectiveness. This involves engaging with stakeholders, allocating resources, and coordinating efforts across different departments and business units. Ongoing monitoring and evaluation help to assess the effectiveness of the measures taken, identify any gaps or weaknesses, and make necessary adjustments to ensure that the corporation remains resilient to the impacts of climate change. As part of this step, corporations should also consider reporting on their climate resilience efforts to stakeholders and investors to demonstrate their commitment to managing climate risks and opportunities.