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Release of Arctic methane (the circular hydrates) is among the tipping points forcing high irreversible global temperatures.

Climate risk management: a tipping point to celebrate

Adaptation ESG: a corporate movement to launch

It is only a matter of time, not long at all, before other countries, certainly the world’s largest economies and trade blocs, do the same. The regulatory shoe has dropped. TCFD is about to become a requirement, scaling climate risk management to levels we in the corporate-adaptation community have been dreaming about for years.

So that’s two game-changing trends we’re celebrating: pressure from ESG investors and mandates from government. At least two others are driving the market:

  • The huge opportunities it’s all creating for a wave of new adaptation innovations and solutions to help the world manage this historic transformation — what Judith Rodin, former Rockefeller Foundation president, called the Resilience Dividend in her book by that name. So dramatically different will the future be from the past we know and the present we master, that it must be invented practically from scratch, leading Forbes to call adaptation “the greatest entrepreneurial challenge of our time.” Bill Gates’ Global Commission on Adaptation, for its part, published this late 2019 report pointing to $7.1 trillion in savings and other gains this decade alone from resilience measures, and that only covered a few functional areas.

Whatever you do, don’t fall short

But as swiftly as this policy point is tipping, the response will surely not go far enough, given how rapidly climate tipping points are escalating the crisis and the raw number of people, places and organizations that must adapt fully, on time, in every corner of the planet.

1. Private companies, not just public

The investment firms powering TCFD are, naturally, focused on publicly traded companies. Adaptation ESG will, as well, but not at the exclusion of the privately held. Every company everywhere must adapt. Indeed, communities depend greatly on local private players for their resilience.

2. Small and middle market, not just large cap

Those local, regional players, whether public or private, are more often than not small- and mid-size. Our pledge is to leave no company behind — all sizes, industries and locations. The ESG focus is simply a strategic start, not an exclusionary screen, because ESG leaders are ready, today, to jump into adaptation, make a big fast difference and trigger greater scale. So we aim to work first with them — with you! — to get the ball rolling. And as all companies wake up and use the movement’s tools, perhaps they, too, will embrace ESG practices and transform, not just adapt.

3. Adaptation, not just mitigation

The point cannot be repeated enough, given the still widespread and damaging confusion. Far too many media stories equate adaptation with mitigation, saying the way to adapt is to solve the crisis, and the way to do that is to step up commitment ambition toward reduced carbon and long-term systemic transitions toward a “better, sustainable world.” Or they give you the Big If—temperatures will rise undeterred “if we don’t decarbonize more.”

Yes, temperatures will rise inescapably, and that challenges hope. Except this kind.

4. Execution, not just disclosure

By all means, get into TCFD — and SASB and PRI and CSA and the other standards — and disclose. But remember this is ultimately about actually adapting to worst-case climate change. Stopping at disclosure and preparing for anything less than worst case falls dangerously short and keeps you frighteningly exposed.

5. Go deep, don’t stay in the shallow

Going deep, essentially, means two things. First, go long — as deep into the century as models, imagination and analysis can take you, and figure out what the coming climate devastation and societal collapse will mean to your business, and how to ride it to keep your company open and your value high.

The world’s new corporate leadership opportunity

For all companies, resilience is about to emerge as a brand’s premier path to victory. It is the way to win…big. Call it the new wellspring of corporate value. The logic is as stunningly simple as it is powerful:

As climate impacts compound and economies collapse, the companies best positioned to survive and thrive, to gain the bulk of market share, to attract the customers, employees, investors and insurers, are those that adapt thoroughly for the long haul. Competitors that fail to do so will inevitably fall victim to the consequences and wither.

The principal focus of adaptation professionals thus far has been the public sector — understandably, given the imperative of securing a resilient infrastructure, the most accurate weather forecasts, the best possible emergency management, and equitable services for the most vulnerable.

City living = dependence on business. What happens if stores are not stocked?



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Alexander Díaz

Pioneering Deep Climate Adaptability as a business value driver and Adaptation Ambition for faster mainstreaming. Because societies adapt only if companies do.