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Climate Change Will Alter How and Where Business Is Done

A large wave crashes into a building on the beach.

​Climate change and sea-level rise are expected to force millions of Americans from their homes in the coming decades, but businesses have done little to prepare for how it might affect their workforces, according to experts.

"Very few companies have actually undergone a climate impact assessment," says Stephanie Balaouras, vice president and group director of security and risk, infrastructure, and operations for Forrester, a Cambridge, Mass.-based research and advisory firm. Some boutique consultancies are already offering such assessments, but the Big Four consultancies "are just starting to get into the game," she says.

Dan Kreeger, executive director of the Association of Climate Change Officers in Washington, D.C., believes "we have to figure out how to build capacity and leadership" to address the workplace issue posed by climate change.

Certain locations are already feeling the impacts. Some businesses in the Florida Panhandle face worker shortages after Hurricane Michael, one of the most powerful hurricanes to ever hit the U.S., devastated the area last year. Meanwhile, Feather River Hospital in Paradise, Calif., has shut its doors after sustaining extensive damage in last year's Camp Fire, the deadliest and most destructive wildfire in state history.

Climate change is predicted to make natural disasters more common and more severe. At the same time, sea-level rise is expected to increasingly endanger coastal areas.

Balaouras, who co-authored the October 2018 report Adapt to Climate Change or Face Extinction, says rising seas could "impact the location of current operations. [Businesses] could have to move." Rising sea levels also could influence where organizations locate operations in the future.

According to the report, as seas rise, "extensive flooding will inundate businesses and could shut down entire cities." Of the world's largest cities, two-thirds are in low-lying coastal areas.

Danger Rising

Some areas are already feeling such effects. Parts of South Florida regularly see flooding on sunny days during high tide.

"Miami is doomed" in 30 or 40 years, predicts Orrin Pilkey Jr., professor emeritus of earth sciences at Duke University and co-author of Sea Level Rise: A Slow Tsunami on America's Shores (Duke University Press, 2019). "Businesses will be gone, just like homes," he says.

Annapolis, Md., used to see high-tide flooding three or four times a year. Now it's occurring 50 to 60 days a year. The historic downtown is filled with mom-and-pop businesses and they're "the main driver of the retail economy," says Mitchelle Stephenson, the city's public information officer. "We can't shut it down every time it floods."

A Stanford University study found that businesses in Annapolis in 2017 lost about 2 percent of their clients due to flooding. A one-foot increase in the sea level would result in a 25 percent loss of business. The city is now undertaking flood mitigation plans.

A new United Nations report found that hundred-year floods will occur annually beginning in 2050, impacting cities such as Los Angeles, Miami and Savannah, Ga.

Unless major changes are made, such as building sea walls and raising roads, an estimated 13 million Americans will need to move to higher ground by the end of the century due to sea-level rise, predicts Mathew Hauer, an assistant professor of sociology at Florida State University. The Outer Banks of North Carolina and Norfolk, Va., are the areas he sees as being most at risk.

A study last year by the Union of Concerned Scientists found that, in 30 years, more than 300,000 homes in coastal areas, as well as 14,000 commercial properties, will be at risk of chronic flooding.

In some places, such as New Orleans, Houston and Staten Island, N.Y., the federal government is already buying out homeowners in flood-prone areas.

After Hurricane Katrina devastated New Orleans in 2005, the population there fell by more than half, from almost 485,000 in 2000 to 230,000 in 2006. By 2018, it had rebounded to more than 390,000, according to the U.S. Census Bureau.

As people are displaced, the local workforce will shrink and the impact on business can be profound, Hauer says.

In Panama City, Fla., even businesses such as McDonald's are having a hard time finding workers. Many housing units were destroyed or damaged by Hurricane Michael, and rents have soared.

"The workforce issue is a real problem, in terms of the amount of work that there is to do and how hard it is to find people," Florida Sen. Marco Rubio, a Republican, said at a recent hearing to discuss the problem. "Part of that is due to housing, labor costs and availability. So that's probably a broader challenge that will involve state and local action."

On the opposite side of the country, California's utility company, PG&E Corp., shut off power to millions of customers this fall as it tried to avoid a repeat of last year's disastrous Camp Fire. The company's equipment has been implicated in starting numerous wildfires.

This year's fires were estimated to have caused more than $25 billion in damages to homes and businesses by early November. 

Climate Change Preparedness

As climate change continues to affect organizations, "businesses will wake up to this," predicts Natalie Ambrosio, editor with the California-based climate change risk measurement company Four Twenty Seven. While companies need to assess their assets and their climate change preparedness, "resilience at the headquarters isn't going to be sufficient to maintain operations" if a natural disaster or climate change affects the surrounding area, she says. A disaster might, for example, impact a company's ability to transport goods and its employees' ability to get to work.

Kreeger says HR departments "haven't really gotten their arms around this," and he suggests knowledge about climate change and its potential impact be included in job descriptions and performance goals.

The Association of Climate Change Officers and the state of Maryland already run the Maryland Climate Leadership Academy, which trains government and business leaders on preparing for climate change.

Climate change preparedness is particularly complex because it impacts every company, every industry and every region of the country differently, Kreeger says. Companies "don't want to get caught blindsided by this."    

Susan Ladika is a freelance writer based in Tampa, Fla.


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