Four questions for tourism businesses about climate change risk
This blog takes a different approach to normal, because when it is 20 degrees on a February morning in London, apparently the hottest February day ever in the UK, things are different. This week, my blog is simply four questions about climate risk (and some context) that I urge every company in our industry to seek answers to as a matter of survival. Next time you have a chance to ask your boss, your staff, or your suppliers a question, please ask them these.
Q1: How great are the risks from climate change to the viability of the destinations where you operate?
Last year, the Professor of Sustainable Tourism at Griffith University, Susanne Becken, wrote an article exploring this issue. In it she observed: “At present, people are choosing holiday destinations based on broad climatic parameters — for example, what temperature to expect in Fiji in January — but increasingly tourists will learn to check for risk-related items, such as the likelihood of a cyclone, how far their bungalow is from the beach, is their hotel in a flood zone, and so forth.”
Becken was writing this article for ABC News in Australia. A few months earlier, the same website had published an article titled: “Sydney, Melbourne urged to prepare for 50C days by end of century.” That felt pretty shocking in 2017.
Last month, in January 2019, Australia almost got there. Temperatures in Port Augusta reached 49.5C. In Cloncurry, the temperature rose above 40C for 43 days in a row. Forget the end of the century. End of the decade looks a better bet.
As I said at the beginning of this article, it’s 20 degrees here in London today. In February. But this same spell of unseasonably warm weather means that a few hundred miles further north: “Scotland’s ski resorts are facing one of their most difficult seasons in years, with a lack of snow forcing them to close many of their slopes, raising questions about the impact of climate change.”
What about the places where you operate? Can they adapt? Are you helping them prepare? Is your activity lessening the risks, or making them worse?
Q2: How severe are the risks climate change creates for your suppliers?
When the travel industry is promoting its economic importance, it will often highlight how extensive the supply chain is, and how spending money on tourism impacts on industries as diverse as agriculture, clothing, cosmetics, transport, insurance, banking, construction, security etc. Fair enough, but this also means that tourism is affected by the impact of climate change on all of these too. If the price of food rises or cotton production becomes more expensive, runways become too hot to take off from, or buildings need redesigning to cope with the heat etc… this all affects tourism too.
This month, the website GreenBiz shared the findings of the largest ever study of its kind, which “looked at 1,600 companies’ disclosures to CDP [Carbon Disclosure Project] on physical climate change impacts, the financial implications of these impacts and what companies were doing to manage them.” It featured examples such as how the Canadian National Railway is concerned about train tracks buckling in extreme heat; how Hertz worries about restrictions on car-washing during droughts; and how Nestlé fears floods will destroy crops. All have an impact on tourism.
It warned that while companies are aware that there are risks from climate change, few have done much work to quantify them, so “although 83 percent of companies surveyed disclosed that they faced physical risks from climate change, only 21 percent quantified these risks in financial terms.” GreenBiz said that: “companies are collectively reporting climate risks to investors in the tens of billions whereas most global estimates of climate risks to manageable assets run into the trillions — at least two orders of magnitude greater.”
What about the companies you work with? Have you priced the impacts to your supply chain? How would changes to them affect your business? Could you afford to carry on working with your suppliers if carbon cost $50 a tonne? What if it cost $300 or more, as a 2017 briefing for the Canadian government claimed would be necessary by 2050. What if the hidden social costs were included along with the economic, and a tonne of carbon cost $417, as measured in a 2018 study for Nature Climate Change?
Q3: How much of your future planning (time / budget) do you intend to spend on addressing the risks to your business from climate change?
Last week Reuters reported a speech by European Commission President Jean-Claude Juncker, in which he announced that: “In the next financial period from 2021 to 2027, every fourth euro spent within the EU budget will go towards action to mitigate climate change.” According to Reuters, the figure represents 1 trillion euros ($1.13 trillion) over seven years. It seems a huge amount, except that the EU budget is typically 1 percent of the bloc’s economic output.
When was your last meeting dedicated to discussing climate risks? When is your next one? Considering the various risks to tourism’s ability to do business in the years to come, what amount of time and resources should you allocate towards protecting your company’s future from the impacts of climate change?
Q4: Considering all the above risks and costs, when is the best time to start a programme of dramatically decarbonising your business?
When Junker made his announcement about the EU budget, he was sharing the platform with the remarkable 16-year old climate activist Greta Thunberg, who started a solitary climate strike last August, and has missed school every Friday since. In the ensuing months she has been joined each week around the world by thousands of other children. Interviewed for the Financial Times last weekend, Greta was clear on the urgency of the situation. “’People say, “Oh the children are going to save us”. But no, we aren’t…” she told the paper. “We don’t have time to wait for us to grow up and fix this in the future. The people who are in power now need to do this now.’
She’s right. According to the CICERO Centre for International Climate Research, we need to drastically decarbonise the absolute carbon impact of our businesses and economies now. Simply continuing to grow, but doing it relatively more efficiently, won’t work. You can grow if you want, but your absolute (total) impact has to become much less than it is today.
How much less? If we start now, says CICERO, then we will need to reduce our impacts at 5% a year. But if we wait another 10 years, it will be 9% each year. Had we started in 2000, on the other hand, it would have been just 2% a year.
In other words, the longer we put off asking these questions, the more expensive the answers are going to become. If not now, when?
