On the heels of the entry into force of the historic Paris agreement on climate change, a legal opinion declares that directors who don’t properly consider the material impacts of climate change on their business risk personal liability for breach of duty. With this, business leaders are inexorably confronted with the need to consider climate change and sustainability risks for their companies, and to price, mitigate, and manage them accordingly. Is your business ready to bring climate change and sustainability to the board?
This past month the world celebrated the ratification of the historic Paris climate change agreement, years sooner than expected, particularly given that is the single largest piece of climate change legislation ever enacted. The agreement, signed by 196 attending parties, achieves a legally binding and universal agreement on climate, with the aim of keeping global warming below 2°C compared to pre-industrial levels. It was the outcome of the 21st meeting of the Conference of Parties (COP) to the United Nations Framework Convention on Climate Change, held in Paris from 30 November to 12 December 2015.
Millions in revenue lost for delays, cancellations and rerouting of sports events
It was the first day medals were to be awarded for the Olympic rowing regatta, and yet no racing was taking place. Rain and persistent strong winds lashed the Rodrigo de Freitas lagoon in Rio de Janeiro leading to the postponing, and eventually, the cancellation, of racing, with organizers and team managers scrambling to prepare a revised schedule for the following day. Similarly, tennis competitions were delayed on outside courts.
In fact, the weather has been a hot topic for a number of sports this year. In June, it sparked outrage among players in the French Open, with the first complete cancellation of matches at the French Open since the year 2000 and other damp days resulting in delays and frustrations from players and organizers alike. Guy Forget, the Director of the Roland Garros Tournament, took the brunt of criticism for the controversial decision to play as long as possible, even in conditions considered difficult if not dangerous, by the competitors.
When it comes to weather affecting consumer behaviour and purchase decisions, it has long been known that weather has an impact on consumer demand. The food we eat, clothes we wear, and how, where and how much we buy has all been scientifically proven to be influenced by the weather, it being second only to the economy in being the biggest single influencer on consumer behaviour.
Indeed, every day people make purchasing decisions based on the weather, from buying ice cream, sandals and swimsuits in the summer, hot soups and snow tyres in the winter, and less of beer and bottled water as autumn approaches. In turn, the seasonal cycle of weather purchases are accounted for by supply chain managers in stocking store rooms and giving discounts to clear out product before the seasonal event- or the season itself- leaves stockpiles of unsellable wares in their hands.
But what if everything we have known to be true about how the weather affects consumer behaviour and our ability to control this relationship was wrong? What if the seemingly uni-directional, unmanipulatable relationship between the weather and consumer behaviour was now being found to be being turned on its head? Specifically, what if a business could influence the relationship between the weather and consumers to its advantage?
DOI: 10.15200/winn.146521.13799 provided by The Winnower, a DIY scholarly publishing platform
It’s being called the “great flood of 2015”, as Britain has been pummelled by seven storms this winter, including Abigail, Barney, Clodagh, Desmond, Eva and Frank. Further, emergency services and volunteers have been working around the clock to deal with the immense damage caused by the opening of a barrier on the River Foss on Boxing Day for a four-day period, flooding a large swath of York, in a controversial attempt to stop the flood spread caused by the downpour. In total, more than 180 flood warning and flood alerts are now in place across the UK and 27 “danger to live” warnings are in effect across central and norther England and Wales.
Along with the floodgates, many questions have been raised as a result of the catastrophic financial consequences of the storms of this winter regarding the state of preparedness of the UK’s public and private sector in responding to climate change today. They concern not just how the flood defences are inadequate to handle the “new normal” of more severe and frequent extreme weather events facing the UK, but how risk management solutions such as flood insurance are failing the public as the full extent of the total uninsurable losses, and the slowness in getting EU and national grants and insurance payments to those in imminent need, is revealed. They both point to the need to explore what financial solutions are available to enable the UK to mitigate climate risk and buy time in the short term while investing in the environmental solutions that scientists have already identified as necessary to reduce climate change in the long-term (eg. replacing the use of fossil fuels with renewables and restocking carbon sinks).
DOI: 10.15200/winn.145190.04852 provided by The Winnower, a DIY scholarly publishing platform