Establishing a Climate Sensitivity Framework in the Context of Business Operations

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.