PwC: Climate Change Breaks Supply Chains

PricewaterhouseCoopers (PwC) is the world’s largest professional services firm. It’s not known for scare tactics or liberal crazymaking. Yet PwC’s new report on climate change says that investors in long-term assets or infrastructure, particularly in coastal or low-lying regions, need to consider pessimistic scenarios. climate-change-risk

In other words, risk assessors must plan for flooding, shutdowns and delays in the supply chain. If Hurricane Sandy didn’t make that obvious, this report will.

“The International Energy Agency, for example, now considers 4C (Celsius) and 6C scenarios as well as 2C in their latest analysis,” says the report. Under those conditions, the broken supply chain is a major business problem.

Specific sectors of concern Sectors dependent on food, water, energy or ecosystem services need to scrutinize the resilience and viability of their supply chains, while carbon-intensive sectors need to plan for more invasive regulation and the possibility of stranded assets, PwC said.

Drought, poor quality, flooding and other water-related challenges negatively affected 53% of the world’s largest listed companies in the past five years, up from 38% last year, yet there’s been no increase in the number of corporations providing water-related risk assessments to investors, according to an October report by the Carbon Disclosure Project.

In September, CDP’s Global 500 Climate Change report found 81% of reporting companies have identified physical risks from climate change, compared to 71% in 2011, with 37% perceiving these risks as a “real and present danger,” up from 30% in 2011 and 10% in 2010. —Environmental Leader

PwC suggests that many companies now view preparation for climate change as not only an indicator of resilience, but also as a competitive advantage.

Action your company can take:

  • Consider getting involved in a program like the Corporate Leaders Network for Climate Action.
    Consider investing in risk mitigation technology, such as a software module that tracks emissions and waste from your manufacturing processes.
  • Consider a web-based (subscription) module for VOC and HAP management, such as Actio Regulator.

Review the PwC reports:

  • PwC Report 1
  • PwC Report 2