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Establishing a Climate Sensitivity Framework in the Context of Business Operations

This case study explores how a Rio Tinto Alcan assessed the exposure of its operations and infrastructure to climate change risks.

Summary

Climate change is expected to influence business operations in many ways. For instance, supply chain disruptions caused by climate-related impacts can raise costs, affect inventory management and reduce business market share. Rio Tinto Alcan elaborated a sensitivity framework aiming to help the company assess the exposure of operations and infrastructure to climate change risks.  The approach allowed Rio Tinto Alcan to make improvements to their asset- and business-level risk assessments and their risk management systems by incorporating information on climate change impacts.

Key take-aways

  • Adaptation to a changing climate requires a strategic and integrated approach which takes account of dynamic environmental, social and economic systems.
  • Identification of new risk dimensions through an analysis of climate change impacts might reveal compound, cross-sectoral, and knock-on issues.

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