Building the business case for climate change adaptation: Lessons from Coastal Australia

This study was conducted by Griffith Centre for Sustainable Enterprise at Griffith Business School to explore how coastal organisations used a business case approach to adapt to climate change. Specifically, the study sought to understand the elements and process of mounting a business case in local government and a range of private organisations that resided on the coastline of Australia. The study was commissioned by the National Climate Change Adaptation Research Facility (NCCARF) and the result and findings are expected to be used in the CoastAdapt tool used to inform the actions of public and private sector stakeholders. Ten in-depth case studies were used to explore the lessons learnt from the business case in each organisation, which included cases from local government (3), property sector (2), financial services (2) and tourism (3).Cases were identified through web-based searches, the Green Cross Australia’s Business Adaptation Network and consultation with industry bodies (particularly in an effort to identify cases in the tourism sector). Cases were selected based on a set of criteria developed specifically for this study and finalised in consultation with NCCARF. The criteria for case selection were the product of a synthesis of international best practice of building the business case for adaptation and incorporating sustainability in the private sector. The literature review identified that whilst a business case for sustainability has become increasingly recognized and applied, the elements that comprise a business case for climate change adaptation is not systematically understood. This is despite a small but growing number of organisations currently mounting such a case. The research provided a grounded understanding of key elements of a business case for climate change adaptation in coastal areas and the lessons learnt from organisations on how to mount a successful business case for climate change adaptation were synthesised. The key elements and lessons learnt can be considered as critical success factors that can inform future practice of coastal climate change adaptation. The seven key elements include: 1.Mounting a business case for climate change was primarily motivated by risks (and associated economic costs) that have been identified in the present governance systems of the organisation. 2.Integration of the business case for climate change adaptation into overall business decision-frameworks was an important element in mounting a business case. For example, a strong business case for climate change adaptation was associated with the presence of sustainability systems and practices in an organisation. 3.Developing shared value for adaptation with stakeholders and the wider community was an important element for both public and private enterprise. 4. Business cases involved the identification and consideration of adaptation pathways –where future options for action to respond the climate risks are identified and met through in manageable stages triggered by a change in environmental and social conditions (see Barnett el al.2014). 5.Use of collaborative approaches, often with external experts and organisations to formulate tools that can assist with obtaining organisational buy-in for the business case. For example visual tools were developed to help communicate the impacts of climate change and make it more relevant and tangible for decision-makers. 6.Planned monitoring of adaptation outcomes will be vital in successfully adapting to future conditions as adjustments may be need in the future (see no. 4 above). 7.Planning for infrastructure for the short-and long-term helps ensure that adaptation can be supported and implemented now and in the future. In this sense, use of a number of scenarios (mostly current, 2030 and 2070 projections) was widespread among the cases that were examined. The lessons learnt by coastal organisations in the process of implementing a business case for climate change adaptation include: 1.The use of extreme events as a critical moment to propose the business case. 2.Leadership from within the organisation and external to the organisation is important to progress the business case through the organisation’s decision making process. 3.The use of visuals and local context was important to demonstrate the need for adaptation measures. 4.It was important to ensure long term commitment for key positions responsible for climate change adaptation in order to seize opportunities and initiate a proposal. Long term commitment was also important to implement the business case because of the inherent long term nature of climate change. 5.The staged implementation of projects aligned to the business case appeared to lead to greater success. 6. Providing only relevant climate impacts on the business is important and thus, any irrelevant information outside the organisations scope of operation should not be included. 7.Identifying key climate and weather risks as opportunities for the organisation and demonstrating business relevance will increase the justification of the business case. 8. The linkage of climate change adaptation measures with climate change mitigation appeared to be important for justifying of the business case. 9. Engagement with other organisational commitments (e.g. voluntary environmental or carbon initiatives) and the stakeholders involved with these commitments is important. This report found important trends in the way business cases for adaptation are prepared in Australia. One of the key findings was that organisations developed their business casein isolation and have little or no knowledge as to how other organisations have approached this issue. Most of the cases were delivered by large-scale organisations that have the capacity (resources in particular) to develop a business case and to plan and implement longer term adaptation strategies. This study will be beneficial to organisations through learning from the experiences of other organisations. Recommendations from this study include more research focused specifically on the prerequisites and capacity of small and medium-sized businesses to mount a business case for climate change adaptation and the development of a knowledge-sharing platform for Australian businesses and government to coordinate efforts and provide support. Such a platform could be similar to the British UK Climate Impacts Programme (UKCIP) initiative, a multi-disciplinary organisation dedicated to building the capacity of public and private sector organisations for adaptation through knowledge sharing, consultancy and policy-support. Implementing an Australian-style UKCIP would provide materials and tools to help organisations to build the time and resource intensive business case. Thus, enabling organisations to respond and adapt