Responsibility for private sector adaptation to climate change

Abstract

ABSTRACT. The Intergovernmental Panel on Climate Change (2007) indicates that vulnerable industries should adapt to the increasing likelihood of extreme weather events along with slowly shifting mean annual temperatures and precipitation patterns, to prevent major damages or periods of inoperability in the future. Most articles in the literature on business management frame organizational adaptation to climate change as a private action. This makes adaptation the sole responsibility of a company, for its sole benefit, and overlooks the fact that some companies provide critical goods and services such a food, water, electricity, and medical care, that are so vital to society that even a short-term setback in operations could put public security at risk. This raises the following questions: (1) Who is responsible for climate change adaptation by private-sector suppliers of critical infrastructure? (2) How can those who are identified to be responsible, actually be held to assume their responsibility for adapting to climate change? These questions will be addressed through a comprehensive review of the literature on business management, complemented by a review of specialized literature on public management. This review leads to several conclusions. Even though tasks that formerly belonged to the state have been taken over by private companies, the state still holds ultimate responsibility in the event of failure of private-sector owned utilities, insofar as they are "critical infrastructure." Therefore, it remains the state's responsibility to foster adaptation to climate change with appropriate action. In theory, effective ways of assuming this responsibility, while enabling critical infrastructure providers the flexibility adapt to climate change, would be to delegate adaptation to an agency, or to conduct negotiations with stakeholders. In view of this theory, Germany will be used as a case study to demonstrate how private-sector critical infrastructure providers can plan and implement climate change adaptation in practice, through the regulatory modes of "negotiations" and "enforced self-regulation."

Mobilizing private finance for coastal adaptation: A literature review

“…Coastal adaptation has public good characteristics, providing benefits that are nonrival and nonexcludable, and therefore is not efficiently provided by private actors (Olson, ). Further, coastal adaptation involves flood protection and land‐use planning, often both explicit constitutional responsibilities of the government (Schneider, ). The public actor is thus responsible for coastal adaptation as they may be legally mandated to provide coastal flood protection (Sterr, ) or otherwise responsible for land‐use planning, for example, setting zoning laws, building codes, and developing master plans (Harman, Taylor, & Lane, ).…”

“…On one hand, liability risks to private investors associated with large-scale coastal adaptation investments can pose significant barriers in light of the uncertainties associated with climate change and sea-level rise (IPCC, 2014). For example, investors may be discouraged from investing if high-end sea-level rise could lead to large-scale damage to property or critical infrastructure for which they would be liable (Schneider, 2014). Large-scale liability risks have been addressed to encourage private investment in other key sectors, though not yet for coastal adaptation.…”

A relational view of climate adaptation in the private sector: How do value chain interactions shape business perceptions of climate risk and adaptive behaviours?

“…There is a growing recognition of the opportunities and challenges posed by climate change to business organisations (Atteridge et al, ; Goldstein, Turner, Gladstone, & Hole, ; Nitkin, ; Pauw & Pegels, ; Schneider, ; Surminski, ; Winn, Kirchgeorg, Griffiths, Linnenluecke, & Gunther, ; Sussman, & Freed ). In response to the Task Force for Climate Related Financial Disclosures (TCFD), companies and financial institutions have started to evaluate the risks and opportunities generated by climate change in their businesses and value chains.…”

Access and allocation in climate change adaptation

“…The former, sometimes also referred to as planned adaptation, is adaptation carried out by government (at all levels). In contrast, private, or autonomous, adaptation is carried out by the private sector, households, or individuals (Schneider 2014;Rotter et al 2016;Goldstein et al 2019). These two are interlinked.…”