The Adaptive Company
A column on navigating your new climate future
The business world turned a historic corner last year. Thousands of companies got the climate-scenarios memo, magnitudes more than anyone could have expected, and are now weighing a change in the way business is done — the dawn of a new climate-future-ready corporation, you might say.
It is without fail one of the megatrends of our time, because we’ve known for quite a while where climate change is in all probability headed, but the corporate world had not followed suit. In 2017, as climate news and disaster events grew in horror, the powerful Financial Stability Board (FSB) stepped up and launched the Task Force on Climate-related Financial Disclosure (TCFD), complete with an easy-to-follow framework and super-compelling business case for companies to dig into and disclose their fast-escalating exposure to disruptive — correction, devastating — climate risks.
Fast forward just two years, and TCFD is now an integral part of the leading ESG and climate-disclosure standards in the world. An astonishing 7,000 global companies surveyed by the influential Climate Disclosure Project report more interest than ever before. A new game has been born. Global disaster-risk platforms like the UN’s Sendai Framework and this one at the EU have been around longer. Heck, an entire global adaptation ecosystem has been ready for years to receive companies and show them the way to resilience and protection.
But there were few takers. Companies had remained so focused on their sustainability agendas trying to implement solutions, they largely missed the fact there is no longer any chance of keeping temperatures from overshooting the dreaded 1.5°-2° Celsius threshold as early as this new decade and ushering in an unending, ever-worsening string of catastrophic consequences.
The science is now elemental. As all those news reports, countless peer-reviewed studies, and this recent New York Times bestselling book have established beyond doubt, the carbon already in the atmosphere, plus the expected emissions volume of 35–40 gigatons per year for the next 10–20 years, guarantee the overshoot, and that in turn will trigger a number of tipping points likely to spike temperatures further in ways and toward outcomes that can no longer be altered.
The only uncertainty left is the precise timing and location of the consequences, precisely the map you get to navigate for your company to make it through.
Guiding you in that process is the singular purpose of this column — two original stories every month with insights you won’t find anywhere else. The column will form the basis for a book by the same name I will publish summer 2021 as the premier guide to help companies the world over merge their sustainability programs with a leading-edge adaptation agenda and create a new class of climate-ready companies, the ones that will then be on hand to help the rest of society sustain whatever the climate throws at us.
It begins here, with three dimensions unique to The Adaptive Company:
Vision
Think of this as holding a cone up to your eye and looking through it at the future, or looking at a cone graph that starts at today’s 1.2°C temperature rise above the pre-industrial-revolution historical average and curves up, pushed by tipping points, to somewhere between 3°C and 6°C by 2100.
That is the high scientific probability before you, the one for which you must now develop plans, the one climate models don’t tell you, because modeling can’t factor in tipping points. But you can.
Business always operates in probabilities. Likelihoods. Odds. You plan for and operate in the probable, not in the miracle. Staying below 3°C is now a miracle, and you do not want to be that guy, the one who misreads the clear consensus tipping-point science, misplays the odds, and destines your company to a losing proposition. Far better to dive into the cone and adapt as thoroughly as you possibly can, given the consequences of not doing so, but more so given the promise that lies within for companies that get the science right.
That is, the promise of brand relevance and leadership. We don’t know which companies in your industry will do this, but we do know that those that don’t will probably suffer, lose significant value, and may not even survive. Those that adapt — you, perhaps?— position yourselves to emerge as market leaders.
Biases
As you get the tipping-point science right, you must also be spot-on with the behavior science of human biases and fears. As with climate science, behavior science is now so advanced we can finally understand, far more clearly and painfully than ever before, why we’re in the climate bind we’re in, after 50 years of environmental movements that tried fruitlessly to change people to sustainable behaviors.
Why is this so mission-critical? Because unless you break through these biases and fears, your executive team, middle management, rank-and-file personnel, partners, suppliers, consultants, collaborators, bankers, investors, insurers, and other stakeholders will be neither able to envision what’s coming nor emotionally suited for the adaptation task ahead. Your very survival depends on them all overcoming their worst instincts.
First is the Ambiguity Bias, which keeps people from seeing the future clearly and instead throws them back to their comfort zones. So you must clarify what’s coming. The Optimism Bias defaults them to an expectation of a better future, so you must redirect that optimism to the hope of an adapted future, a vital distinction. The Status Quo Bias, a natural enemy of any change-management initiative, ties them to what they know, when in fact you’ll be making significant changes. The list goes on.
You need your people to innovate, be agile, nimble, awake, ready to move at a moment’s notice. This is the new way forward.
Coherence
Risk and opportunity coherence, that is. Most treatments of adaptation would have you focus disproportionately on, well, what TCFD informs: physical and transition risks against climate shocks and stresses. And don’t get me wrong; these are crucial risks to hedge, with such resilience measures as fortifying facilities, switching suppliers, securing cash, safeguarding data, managing greater economic volatility, and more. We’ll certainly be exploring them all here in The Adaptive Company.
But resilience is but one aspect, one of the Four Rs developed by Prof. Jem Bendell of the UK’s University of Cumbria in his Deep Adaptation Framework. This column will bring you all four, not just the resilience advice you may be getting elsewhere —because it behooves you to contemplate resilience measures against tipping-point science and human biases. Another level beckons.
To be fully coherent and complete in your adaptation, consider Reinvention, as well, where your bias-free staff weighs the future and is able to suggest and execute new directions — restoration solutions you can sell to add value, for example, or enterprise-wide processes to respond more swiftly and collaboratively to the unexpected.
Then there’s Relinquishment, where you lighten the load, divest, let go of all that makes you less adaptable. And Reconciliation, a purely human-scale approach, where you and your people make peace with the planetary limits now driving the future, and where your company becomes a community marked by mutual help in times of distress.
So, welcome to The Adaptive Company. Better yet, why not become one! We want this to be interactive. Feel free to send me any suggestions, refer case studies you know of companies or leaders we should highlight and celebrate — whatever comes to mind.
The time has come to create a wave of climate-ready companies. Everywhere. On Earth. No place will be spared, so no company should be caught unprepared, no solution left behind. And that’s a whole lot of companies and a bunch of solutions. We want to discover them all and let the whole world know.
Alex Díaz, a leading thinker and analyst in the fast-emerging field of corporate climate adaptation, has a long career spanning business journalism, strategic communications, sustainability management, and stakeholder initiatives. He lives in Puerto Rico, at the entrance of the Caribbean hurricane alley, and runs adaptation studio COMMON Future, an affiliate of global social-enterprise collaborative COMMON.
