INTHEBLACK April 2025 - Magazine - Page 39
“Typhoons are not new for Hong Kong, but the intensity
is getting stronger, and they are becoming more frequent
and more difficult to predict. In 2024, we had three
typhoons close to Hong Kong, two to three days apart.”
FELIX LEUNG, THE CHINESE UNIVERSITY OF HONG KONG
PREPARE FOR CLIMATE RISKS
Adrian King, partner, ESG advisory and assurance at KPMG Australia,
says a first step in preparing for the impact of climate change is understanding
a business’s exposure.
“Whenever we do a Scope 3
analysis, which covers emissions
up and down the supply chain,
90 per cent of all climate risks are
in that category,” says King.
He notes that once the business
understands the risks, the team can
take steps to manage them.
“Do you diversify your supply chain?
Do you change it? Do you find
alternative suppliers? Do you lock
in low-cost and low-carbon supplies?”
The next step, says King, is to
examine the business’s exposure.
“You can then do what most
organisations are very good at,
which is using common techniques,
such as the 80-20 rule, to make sure
that you understand the lion’s share
of your emissions, where they’re
coming from or what the exposures
are, and then focus on those areas.”
Alan Dayeh, partner, sustainability
strategy and financial services
at sustainability and climate change
consultancy ERM, says quantifying
risks can present challenges
to organisations.
“There are toolkits that risk
management professionals have for
looking at past loss events,
and these are quite useful, but
every organisation will have their
own vulnerabilities and exposures
that they’ll need to work through.”
Dayeh adds that organisations
that have invested in climate
mitigation ahead of the curve are
reaping financial benefits today.
“I’d encourage CFOs and
accountants to think more
strategically about working with
chief sustainability officers or
those who are driving climate
change risk and opportunity
management internally,” he says.
“Then, rather than looking at cost
line items that need to be struck out,
start asking questions.
“‘What’s the strategic advantage
of us making that capital investment
or incurring that operating expense?
What do we have to gain by
maintaining this kind of cost of
delivery?’ Then, connect the dots
and understand that part of the
role of the team that’s managing
climate change within your
organisation is also contributing
to its strategic growth.”
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