The Courier-Mail
By: Andrew Griffiths
Last month, two disasters were looming on the US horizon. One was the global credit crisis, the other was the potential loss of lives and infrastructure (not to mention huge oil production capacity) as Hurricane Ike threatened to devastate Houston, Texas.
Fortunately, given how all-consuming the economic crisis is proving to be, only one of those events occurred.
The problem is that while the credit crisis might take six months, a few years or even longer to resolve, it will inevitably be resolved.
Climate change, while it might not have the immediate impact of mortgage foreclosures and huge share losses, is not going to go away.
We cannot underestimate the fact that a significant recession in the US will most probably hinder the advancement and acceptance of the need to engage with climate issues and carbon reduction strategies.
Business and industry now face an enormous challenge to stay on their path to becoming more sustainable.
This will be particularly difficult in voluntary markets like the US where they don't have any legislative push to engage with climate change, emissions trading or carbon management.
However many managers, by focusing on the issues associated with the credit markets, run the risk of missing opportunities the crisis offers to restructure for sustainable outcomes.
In Australia, we are fortunate to have both a robust set of financial conditions and a government that is committed to implementing an emissions trading scheme and other climate change initiatives.
Naturally firms will focus on survival first -- the credit crisis might slow things down. But those affected by legislation and the introduction of emissions trading will have to deal with these issues regardless of what's happening with the economy.
Of course there are plenty of companies out there who have long ago figured out that they can make real cost savings, differentiate themselves in the market and even attract quality staff by having a commitment to sustainability.
For the unconverted though, now is not the time to back away from looking at the way they do things and asking if they are sustainable. And this isn't just about surviving financially and making profits.
It's time for companies to ask: Can we afford not to plan for climate change? How do we build long-term, sustainable companies?
If we go back to that scenario facing the US a month ago and imagine Hurricane Ike had destroyed a significant population centre or the oil production capacity in the Gulf of Mexico, we might well find climate change is just as high a priority on the US Government's agenda as the financial bailout.
Just like the credit crisis, an adverse weather event like Ike can have a significant impact on organisations, industries or entire economies.
Business and industry have to understand their exposure. It is no longer simply about the impact a company has on the environment. As we move into a climate-changing world, the real issue is the impact the environment can have on companies.
The real threat of extreme weather is to companies and industries that have heavily embedded infrastructure they can't move or be easily relocated.
The Government has talked about fast-tracking infrastructure projects in a bid to better protect Australia against the oncoming recession.
Hopefully, their foresight will also include requirements to build infrastructure that can withstand weather extremes such as heatwaves, hurricanes or floods. Cyclone Larry, which devastated northern Australia in 2006, is estimated to have cost Australia losses equal to about 0.17 per cent of our GDP.
We need to start looking at how we are building our roads, ports, airports, bridges and power plants, and ask if they are well suited for a climate-changing world, are they built to withstand extreme weather events?
Companies are going to have to start weighing these issues up when making decisions and engaging with climate change.
With a financial crisis, these things will be very costly to deal with, but nowhere near as costly as not dealing with them.
Professor Andrew Griffiths is Chair in Business Sustainability and Strategy at the University of Queensland Business School. This is an edited extract of a speech he delivered to The Brisbane Institute.