From identifying climate risks to concrete preparedness measures: a new tool for businesses to adapt to climate change

Climate change affects business operations and value chains in many ways

A warming climate poses a wide range of challenges for businesses. For example, increased rainfall and flooding can cause damage and incur costs for properties, equipment, and infrastructure. A lengthening growing season and shortening winter can also shift product demand and the timing of services. Furthermore, weather events elsewhere in the world can delay deliveries and weaken the availability of raw materials and components.

The tool we designed for Kouvola Innovation Ltd offers support for SMEs in assessing climate risks and creating preparedness measures. In addition to the tool, we conducted climate risk assessments for the priority sectors of Kouvola’s regional development company: transport and logistics; the built environment; the food industry (including agriculture and forestry); and renewable energy solutions, production, and distribution.

Risk assessments highlighted direct, indirect, and transition risks of climate change

In the climate risk assessment, we outlined the climate risks facing the four sectors in the Kouvola region and provided examples of measures to prepare and adapt to these risks. These measures offer a practical starting point for the further development of adaptation work. The analysis is based on a comprehensive risk assessment that considers the physical (direct) impacts of climate change, spillover effects (indirect risks), and the regulatory, technological, and market-based changes resulting from the transition to a low-carbon society (transition risks). We compiled the assessment results into a concise and clear format to best serve the needs of SMEs.

Turning climate change threats into opportunities with the tool

The actual tool includes a simple process for identifying and assessing climate risks across a company’s entire value chain, as well as for drafting a concrete action plan. The tool aims to turn threats into opportunities by anticipating damages and building new business. We designed the tool so that companies can use it to map their value chain, assess the risks and changes brought by climate change to different parts of that chain, and identify measures to mitigate risks and seize opportunities. The result is a concrete action plan for the company’s use.

“On a tight schedule, Tyrsky created a clear climate risk management tool for SMEs. In addition, we received clear sector-specific reviews that condense complex climate data, along with concrete measures that directly support the development of Kouvola’s preparedness and adaptation work.” — Tero Hasu, Project Manager, Kouvola Innovation Ltd

The project was carried out as part of Kouvola Innovation Ltd’s initiative: Uhkista mahdollisuuksiin – Ilmastonmuutoksen sopeutumisen työkaluja Kymenlaakson yrityskentälle (From Threats to Opportunities – Climate Change Adaptation Tools for the Kymenlaakso Business Sector). The goal of the project was to support SMEs in Kouvola and the Kymenlaakso region in preparing and adapting to the risks and extreme weather events brought on by climate change. The project was implemented by Kouvola Innovation Ltd and LUT University, and it is funded by the Regional Council of Kymenlaakso and the European Union.