Key Issues
The physical impact of climate change hits home in the Nordic region
When it comes to the physical consequences of climate change, it is probably fair to say that most companies in the Nordic 260 are more concerned about their foreign operations. In CDP 2011, physical risks and opportunities are reported as far afield as Alabama (USA) and Zhuhai (China). Coastal regions in Asia are often cited as being particularly vulnerable to rising sea levels and extreme weather events.
The potential consequences to which firms must adapt include disruption of production and distribution, shortages of water and raw materials, and associated security risks. ‘Cyclone- safe’ building specifications, reduced reliance on local freshwater supplies, and the diversification of risks across many different locations are among the measures cited.
The home market by contrast tends to be seen as a relatively safe haven. Several firms cite the findings of the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (2007): that climate change in Northern Europe is initially projected to have mixed effects, including some benefits.
Nevertheless, a look at the combined responses of Nordic companies suggests that climate change is already having a significant physical impact on the Nordic region itself. Moreover, the responses of some firms suggest that there may be knock-on effects, with associated material risks and opportunities that other firms have perhaps yet to take into account.
Figure 18 shows a selection of observed and expected environmental changes identified by Nordic 260 respondents and linked to business risks and opportunities. The timescale varies. Effects due to a rise in mean temperature, for example, are generally longer-term, while others, such as the increased frequency of heavy rain in Denmark and southern Sweden over the past decade, are already making themselves felt.
Of course, uncertainty remains over the permanence of some of these effects or the extent to which they are due to climate change. For instance, many firms report problems due to the exceptionally cold and snowy winters of the past two years, but views differ on whether this represents a trend or an aberration. Some firms expect a gradual increase in year-round temperatures, though perhaps with wider extremes; others expect warmer summers and colder winters.
‘Heavy rains in the Nordic region, especially in the South of Sweden and Denmark … could directly harm the quality of Peab’s buildings or other construction made by Peab.’
Peab
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