Cluster Trade and industry

The picture shows two puddles on a gravel surface in which an industrial building is reflected.Click to enlarge
Trade and industry
Source: Photograph: © Martin Debus / stock.adobe.com

2019 Monitoring Report on the German Strategy for Adaptation to Climate Change

Table of Contents

 

Trade and industry

Climate change is indeed capable of opening up new opportunities for trade and industry, albeit associated with unprecedented or quite different risks. Nevertheless the heterogeneity of the ways in which companies will have to adapt to changing climatic conditions, or the demand for their products or services, will vary as widely as the vast range of companies in this sector. Depending on a company’s size. offerings, location and the extent to which it is integrated in regional, national or even international production and/or delivery chains, it will face very disparate challenges.

It would be in a forward-thinking company’s own interest to analyse the potential of opportunities in order to gain a competitive advantage. Such opportunities present themselves for instance in cases where products encounter changes in demand due to climate change or where early on products or processes might be optimised or enhanced in an innovative way. When attending to climate risks, most companies are primarily concerned with regulatory risks associated with changing legal and fiscal frameworks resulting from concerns relating to climate change adaptation. Any physical risks associated with extreme weather events and gradual climate change (such as sea-level rise) enter more slowly into the perception of companies and investors even though such risks might affect the functionality of their own premises or infrastructures, the smooth operation of their production and delivery chains or the efficiency of their employees.62 In any case, adaptation in the sense of the DAS strategy begins with the consideration of physical risks. In addition to construction or technology, the basic approaches to strategy and organisation also play an essential role. By incorporating for instance the issue of climate change in their own risk management or by embracing continuity management to address any disruptions in their operations, companies ensure their capacity to deal with climate risks in a systematic manner.

62 See e.g. the work of the Task Force on Climate-related Financial Disclosures: www.fsb-tcfd.org/

 

Effects of climate change

Reduced efficiency in summer heat (IG-I-1)

 

Adaptations

Intensity of water consumption in the manufacturing sector (IG-R-1)