Page 24 - Food & Drink Magazine March 2021

ENVIRONMENT MATTERS
From risky to responsible
A global pandemic forced business to re-evaluate how it defines risk. Cress Consulting director Julia Seddon writes a similar rethink is needed for climate and water risks to be assessed like any other business risk.
BY now most companies have updated their risk registers to include global pandemic. While quite rightly called out, the pandemic isn’t the only non-traditional risk businesses face today.
The risk of climate change is often incorrectly presented in the context of a potential change in government policy that might impact operating conditions or increase costs but not as a material threat to assets, people, or supply chains.
Climate change and associated water scarcity are imminent and grave business risks and should be assessed like any other. Let’s explore why.
CLIMATE AND WATER RISK
Climate change includes climate variability as well as changing weather patterns. Australia’s weather is becoming hotter, dryer and less
predictable. We are facing increased temperatures, more frequent and longer heat waves, drought, rising sea levels, coastal erosion and severe weather events including flash flooding, catastrophic bushfires and increased cyclone activity.
Following current trends, this will continue to worsen into the future.
A hotter, drier, and less predictable climate will pose a physical risk to people, assets, economies and ecosystems.
It impacts the availability of water, the reliability of supply chains, working practices and even the demand for certain goods and services.
Infrastructure is also threatened, impacting drainage and sewerage systems, energy blackouts, transport disruption, and damage to buildings.
Changes in weather patterns can have knock-on effects,
which can significantly impact your business including workplace health and safety, supply chain disruption and raw material supply risk.
Together with impacts on food production and human health, adaptation and building resilience are especially important for economic,
social, and environmental sustainability.
Climate change is increasing water stresses and impacting water availability. Long-term reductions in average rainfall have led to declining stream flows across many parts of southern Australia.
Water supply reliability is expected to decline as a result of reduced rainfall and increased evaporation reducing water availability for irrigation, domestic and industrial use.
The Productivity Commission’s National Water
Reform 2020 draft report found average inflows to Perth dams over the past decade were
75 per cent below the level of much of the 1900s. Records of inflows to the Murray River over 125 years show median annual inflows over the past 20 years have been about half the level
of the preceding century, with drier years much more frequent. This will likely mean material reductions in water availability for most of the country.
While this might seem overwhelming or too difficult to deal with, assessing the risks of climate change and water scarcity is essentially the same as analysing any other risk that might impact your business.
A PRACTICAL STEP
There is no one-size-fits-all approach to climate change. Practical approaches and solutions are required.
24 | Food&Drink business | March 2021 | www.foodanddrinkbusiness.com.au