Strengthening business resilience to CAD

Climate change is becoming one of the most critical elements in corporate strategy. Failure to act in advance of the growing threats to commercial success is increasingly seen by shareholders and others as highly irresponsible. The consequences are likely to be serious not only for the environment as a whole but also for profits, shareholder value, competitiveness, indeed for most areas of corporate performance. We call them CAD - 'Climate Accelerated Depreciation'.

Take the case of a highly respected global construction company. Adhering to backward-looking good practice standards, it failed to take account of the shift in rainfall patterns until on just one project on just one day two million pounds sterling came straight off the bottom line. Drains on a new theatre were too small and it flooded shortly after opening.

Investors and shareholders need to know whether companies have the capacity to identify and manage climate risk effectively and to recognize where innovation will give them competitive advantage.

55% of FTSE senior executives already expect climate change to impact on their strategic development plans. As many as 86% are interested in discussing the implications in the boardroom. (YouGov Survey 2007).

A leading food and drink manufacturer recognised the importance of spotting CAD (Climate Accelerated Depreciation) when we helped them (among other issues) to identify the vulnerability of just one of its major product ingredients to extreme weather. We were able to help the company see the relevance of research carried out by food security experts to their value chain - and to help managers find suitable actions to take in response.

Lehman Brothers' 2007 report on business and climate change has this to say on the issue: "The firms that will prosper are most likely to be those that are early to recognise the importance and inexorability of climate change, foresee at least some of the implications for their industry, and take appropriate steps, well in advance."

Using our ground-breaking new methodology, PACT (Performance Acceleration for Climate Tool), we can offer you much needed and high quality feedback. We help you assess your strategic exposure to climate change, analyse how resilient or how vulnerable your company is on the issue, identify possible breakthrough projects which offer win : win outcomes and accelerated strategic learning so as to build a routemap towards sharp strategies for change.

The PACT process typically takes a couple of days on site plus an analysis of documents and communications. We carry out quality interviews with key personnel to identify the material business issues, gathering evidence on where you stand. Using our proprietary methodologies we then analyse where you stand and present an action focussed report for discussion at board level.

A clear winner, one of the first companies to use this approach, is now heading off the competition to win contracts with a leading sustainability edge.


Contact: david@alexanderballard.co.uk or call on +44 (0)1488 686286 or on +44 (0)7840 544226