26 Feb 2020
Around the world, businesses are thinking more about how to respond, and adapt to climate change. Simon Wild, Head of Sustainability Transformation at Lendlease, shares some insights into the work that Lendlease is doing to build resilience to climate-related uncertainties.
Resilience is ultimately about being prepared to readily respond and adapt to future uncertainties. With respect to sustainability and the built environment, it is a question of society’s resilience and agility to respond to the impacts of climate change, which is currently one of the greatest uncertainties the world faces.
By what degree will temperatures increase? Will society become more localised to respond to decarbonisation? Will governments become more protectionist, as the cost of climate change impacts economies? Resiliency to climate-related impacts is about both the physical risk (e.g. sea level rise and extreme weather events), and the transitional risks (e.g. a price on carbon and opportunities for decarbonisation).
Lendlease is using scenario planning to build resiliency to climate-related uncertainties. We have established four climate scenarios that consider not just global warming temperatures, but most importantly what factors would lead to each of the scenarios. We have made our scenarios available publicly on our website and engaged over 200 of our senior leaders globally to identify risks and opportunities for our organisation under each scenario. This work has led to our participation in the TCFD Secretariat’s Scenario Planning Advisory Group. We have also participated with several of our peers in a Preparer Forum initiated by the Bloomberg Foundation and World’s Business Council for Sustainable Development, to support implementation of TCFD recommendations in the construction sector.
We have assessed physical climate change risk to our assets and developments for many years. Barangaroo was one of the first developments in Australia to publicly launch a Climate Change Adaptation and Resilience plan – this is still available on the Barangaroo South website. More recently Barangaroo has been announced as Australia’s first carbon neutral precinct.
In 2019 we introduced a shadow price on carbon into our investment committee processes, as part of our broader shift to begin building strategic resiliency into our future projects and investments.
I have been lucky enough to be involved in projects and businesses around the world to experience first-hand how resiliency significantly varies across cities and regions. Solutions that are applicable to one city probably aren’t suitable to others. In turn, local responses are vastly different, such as the Singapore Government’s ambitious S$100 billion climate change protective measures to ensure the safety of the city.
In SE Asia heat waves are a growing risk, particularly humid heat waves. In the UK river flooding and sea level rise are a growing concern. In America, impacts vary across the country – cities to the south are being battered by more powerful hurricanes and sea level rise, while the west coast battles prolonged droughts and wildfires. In Australia we face all of these challenges.
The summer we have just been through in Australia has highlighted the impact of climate change in the most confronting way. These impacts have occurred from just 1 degree of global warming. Imagine what Australia’s summers will be like at more than 2 degrees of warming – a likely scenario if the world doesn’t immediately reduce carbon emissions.
The priorities must still start with reducing carbon emissions as fast as possible, while transitioning the economy and jobs to a decarbonised world. However, there is now also an urgency to adapt and build resiliency to climate change impacts. Australia and the world must reduce emissions AND build resiliency to a climate changed future.
Bipartisan support for an aggressive national climate action plan alongside a national resiliency plan would be ideal, like in Singapore, with a focus aligned to policy, government incentives and market mechanisms to drive innovation and job creation focused on better outcomes.
With a tradition of rising to a challenge, an abundance of natural renewable energy resources and a private sector already committed to making significant changes for a sustainable future, Australia is well-positioned to step-up and lead the world as a resilient, decarbonised nation.
It is important because it is the right thing to do and it is the smart thing to do – especially as a leader in the construction and development space. The built environment sector accounts for over 40% of carbon emissions from energy use and over 40% of raw materials used every year. Buildings are a significant part of the problem but more importantly, they can be a significant part of the solution.
Investors, customers and the broader public are now recognising companies who have chosen to act and be a part of the solution. Equally, there are market signals suggesting those who choose not to act or play their part will be challenged and penalised.
More recently this has been reinforced by the introduction of the Taskforce for Climate-Related Financial Disclosure (TCFD), established in 2015 by the Financial Stability Board of the G20 in response to the economic impacts of climate change. The role of the taskforce is to provide a set of voluntary, consistent disclosure recommendations for companies providing information to investors, lenders and insurance underwriters about their climate-related financial risks.
TCFD is shining a light on those companies that are taking a leadership role in both building resilience to the physical impacts of climate change, while being proactive in their strategic transition to decarbonisation.
I started my career in the late 90s and have always worked in the field of sustainability, but at a personal level it probably started much earlier. Growing up in a tiny village in England surrounded by nature and agriculture I experienced first-hand the impact of our lifestyles on nature, but also the benefit to our lives from living in nature. My part time job at school was at a self-sufficiency shop and vegetarian café, my weekends were spent with friends in nature and my grandfather was an inventor, so it was inevitable that I would end up dedicating my life to trying to reduce the impact of our lifestyles on the environment.
My first job after graduating from university as a Building Services Engineer was to establish a building physics capability for a large global consultancy firm based in London - it wasn’t called sustainability in the 90s! We were one of the first groups in the world to use computer modelling to assess building design solutions to improve thermal comfort, natural ventilation and energy efficiency.
That first job enabled me to build my technical expertise and influencing skills to work across the world in many different sustainability roles – from consultant to CEO to my favourite job so far, Head of Sustainability Transformation at Lendlease in Sydney.