SIGNALS OF CHANGE
Catching social and environmental trends early
Newsletter October 2013 Vol. 1 Issue 2
CLIMATE AND FOSSIL FUEL RISK SPECIAL EDITION
About this newsletter:
We monitor the news flow from a wide variety of sources from the last 30 – 60 days for developments that could inform your organization’s social and environmental strategy which in turn could affect your overall business strategy. Signals of Change Newsletter is produced in a cooperation between the Open World Foundation, the Institute of Swedish Safety and Security and Stephen Hinton Consulting.
CLIMATE CHANGE AND CLIMATE CHANGE RESPONSE MUST BE INTEGRATED IN CORPORATE RISK MANAGEMENT
SIGNALS. Weather patterns are changing, where extreme weather and unexpected changes in weather patterns undermine investments and productivity. At the same time, the scientific community is speaking with stronger voice on the likelihood that climate change is man-made. Governments are listening. The UK was the first with ”The Climate Change Act 2008”.The value of the fossil fuel in the ground may become stranded if regulations forbid its extraction for burning,
COMMENT: Now is the time, if organizations have not done it earlier, to develop a combined fossil fuel and climate risk strategy. It is also time to look for opportunities to develop the operations of the organization in step with the inevitable changes to come.
We remind readers of the financial risks associated with reduced demand for fossil fuel: extraction requires ever increasing capital and without the case of a strong future demand, extraction could fall faster than predicted due to lack of investment.
Comments from the Guardian newspaper on the business reaction to the recent IPCC report.
Talk of creating a restrictive carbon budget
The Swedish organization Global Utmaning invited Swedish municipalities to discuss the opportunities associated with the changing attitudes to climate
Permafrost melting means buildings are collapsing in the arctic as the ground gives way (in Danish)
Physical conditions could be making some countries like Iran uninhabitable
ENERGY AND ECONOMY RAPID DECLINE RISKS MUST BE MANAGED
SIGNALS: More talk of falling over the energy cliff. Just because energy intensity ramped up as a steady increase since the beginning of the oil age in the late 1800s does not mean that energy intensity decline will mirror that development as we transition to a sustainable economy paradigm
Several research articles are warning that, as mentioned above, mounting costs of extraction along with falling demand could mean that energy intensity plummets fast causing a global economic meltdown.
COMMENT: This must be factored into all risk management plans, and the need generally to take care of people will become a much higher priority as challenges mount.
SUPPORTING LINKS: Actuary Gail Tiverberg explains her views that the risks of energy and economy working together are under-estimated.
JOINING THE DIALOGUE: Stephen Hinton Consulting, together with the Swedish risk management organization, ISSS and the Open World Foundation offers strategists and business leaders support in framing strategies for the new, resource constrained but connected world. Building awareness is one of the first steps we recommend. Contact us through our websites for more information.
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