Climate change adaptation in the boardroom
Despite action by many transnational and international firms, it seems evident that most Australian companies appear to be struggling to move forward in responding to climate change impacts, apparently paralysed by short-term profit-first thinking, uncertain political risks and a corporate culture unused to volatility and disruption. Information gathered through engagement with executives and senior management from over 100 companies shows that, on a whole, the Australian private sector gives little consideration to the impacts of climate change. Individual corporations and private sector peak bodies urgently need to explore the risks and opportunities that climate change and associated responses bring. This is especially so for the ICT, aviation, energy, insurance and finance sectors. This study yielded a number of findings from boardroom engagement: The Australian Government expects the private sector to adapt, yet little or no incentives exist to promote this behaviour. Autonomous adaptation as practiced may only benefit the lead actor while creating dis-benefit for others (including other corporations, society and the environment). Market practices on current paradigms cannot be expected to meet greater societal adaptation needs. Further adaptation research is required in some areas to help guide shape and monitor adaptation for the private sector. A multiplicity of policy reform may be necessary, but crafting and implementing it is likely to remain beyond the capability of the Australian Public Service or individual Governments. Highly sophisticated mining, gas and some Asian owned technology companies are leading the way with many opportunities missed by Australian companies. Adaptation for the corporate sector is a key strategic issue, unlike mitigation and corporate social responsibility, as it benefits the corporate primarily. Insurance dependency may only be a short-term risk transfer mechanism as, in its current paradigm, it can mask risk, creating a false sense of security that may impede adaptation.
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