In his study of business scenario planning, The Art of Strategic Conversation (2005), Kees van der Heijden notes that:
[M]ost companies . . . have looming somewhere at the edge of their collective consciousness . . . the ‘big unarticulated issue.’ Everybody feels it, it is there, always present, the imminent threat or the un-seized opportunity . . . [S]o vast, so different from Business-As-Usual, that existing management thinking just can’t cope.
Climate change is probably the biggest “unarticulated issue” of them all. The implications of climate change are so large and so contrary to the “business-as-usual” course of our society since the Industrial Revolution that there is enormous uncertainty about how to think about climate risks. These risks don’t just stem from climate change itself. When it comes to business risks, for example, they also stem from policy measures that we might implement to address climate change, adding to already high levels of uncertainty about the future.
Scenarios and scenario planning are a proven approach for comprehending and preparing for future uncertainty. As van der Heijden also notes:
If properly developed and institutionalised a set of scenarios can be the institutional “memories of the future” to help organisations perceive their environment. They are an efficient vehicle for making sense out of a large amount of data and information. . . . The concept of using multiple storylines to encapsulate learning is powerful.
Using our Climate Web™ knowledge base, the Climatographers can help develop climate risk scenarios customized to the needs of specific organizations or planning objectives. We can also provide training in scenario planning to help set the stage for the development of climate risk scenarios.
Climate Action Tipping Points (CATPs) are transitions between business-as-usual futures and the lower-carbon futures scientists have demanded to avoid dangerous climate change. Most discussions of climate business risk assume that climate policy will lead to such alternative futures — but most corporate planning today implicitly assumes the opposite, or assumes that CATPs will only be tripped so far in the future so as to be irrelevant today. The contradiction between these views of the future is the elephant in the room of today’s corporate climate risk and opportunity management. Business decision-makers will need to choose in order to tell a credible risk management story, particularly in light of many observers’ suggestion that 2012 may turn out to have been the beginning of a Climate Change Tipping Point.
Climate change tipping points usually refer to physical tipping points (e.g., an ice-free Arctic) that scientists suggest will signal a substantial change in the speed, magnitude, or impacts of climate change. Climate Action Tipping Points might follow soon after climate change tipping points, but from the standpoint of business risk they differ significantly. The tripping of CATPs will result from the interplay of many political, policy, economic, technology, and social variables. Like so many other financial and policy tipping points in the past, CATPs will be difficult to anticipate, but will seem obvious in hindsight.
The Climatographers’ Climate Action Tipping Point Services help decision-makers understand and visualize this elephant in the room. Even though CATPs can’t be predicted, recognizing the elephant in the room can help companies better hedge risks and be better positioned for opportunities. The Climatographers’ CATP Score, for example, helps decision-makers track whether the CATPs of most concern to them are receding in probability or drawing nearer and thus require anticipatory action.
Note: The DebateGraph embedded above explores Climate Action Tipping Points. You can contribute to it by creating your own DebateGraph account.