Gareth Johnston

Future Ready

1. Briefly tell us about you’re the climate change adaptation in the board project – what is the rationale behind it?

Having grown up in a large family owned business and worked most of my career in the corporate sector, I'm a big believer in the power of business to shape society, generate wealth and support the economy. Business is often at the heart of government policy setting too and while many companies can be fairly criticised for being unsustainable, business builds many of our schools, hospitals, airports, creates wealth, lends and borrows capital and enables our economy to grow. Since climate change first popped up in the early 90's in my career, I've been astounded at the differences between those companies with foresight and preparedness versus those who don't think beyond the next quarter. Building on our extensive corporate consulting and adaptation work we designed this research to engage corporates on adaptation then enquire and communicate across sectors so we could draw lessons and learning for others to adapt. Without business, governments will never deliver on adaptation- they lack the capital, implementation capabilities, agency, delivery skills and leadership to succeed. Business is selfishly but necessarily narrowly focused on profit - it needs government to set some ground adaptation ground rules and help shaping responses and to secure the nationally critical interests.

2. What process did you use to engage with the private sector and why?

We are using a range of social learning frameworks within trusted information networks. This recognises that the traditional informational dissemination model preferred by academics doesn't always suit business culture, environment or audience. We've held closed door business roundtables like board meetings where executives from different and non competing sectors feel they can share experiences, ideas and challenges. We've then used surveys and face-to-face interviews to a structured questionnaire to draw learnings and then tested those learnings on different groups. All responses are non-attributable which supports disclosure. Climate change science has lost ground with a lot of society in the last few years due to polar politicisation and many executives also question the motives of climate change agencies.

3. What findings are emerging?

While many companies have started considering mitigation responses, the vast majority of companies have yet to begin adaptation. Sophistication is low except in a few exceptional cases where companies have had weather and variability exposure. Climate science is misunderstood, not downscaled to a meaningful level and therefore seen as irrelevant or not used. Many executives see mitigation as competing for a limited "sustainability" budget and therefore where many or all resources are focused on mitigation there is little room for introducing adaptation. With adaptation being much more complex with different spatial, temporal and ambiguity scales many companies currently lack the capacity to do much.  Many corporate advisory firms providing services are also stuck in mitigation or use a very basic technical risk frame - this might be a good starter point but its also leading to stationarity, mal-adaptation or "tick and flick" reports that aren't implemented and therefore opportunities are missed. It's clear that government, business and other stakeholders need to work more closely and that all levels of government need to lead. Some sectors have a path dependency towards failure. We are also seeing big differences between foreign owned and Australian companies. There is a risk that Asian or international firms out adapt Australian firms. Many autonomous adaptations are not sustainable as social and environmental costs are often transferred to the public domain.

4. What do you see as current or potential barriers to adaptation in the private sector?

Board culture and risk treatment lies at the heart of many barriers to response. Post GFC short term fear based thinking has narrowed many planning horizons and executive tenure to monthly or quarterly terms which avoids consideration of climate change adaptation. Many corporate executives have suggested that perceived inaction or winding back of policy by Commonwealth, State and local governments signals that the issue isn't a priority and therefore too risky for them to consider. Politicisation of climate debate and polar opinions creates reputation risk for Australian executives who are considering leading from even discussing climate at an executive level.  

Contact NCCARF for more information on businesses adapting to climate change.

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