Mitigating environmental risk

Like other sectors, the impacts of climate change are being felt by businesses in the construction sector the world over, not least for those participating in the market for fibreboard, presenting threats and risks that demand mitigation.   

Physical risks: immediate threats from the physical environment include flooding, hurricanes, drought, wildfires and other natural hazards that climate change exacerbates and that can cause damage to people, buildings and critical infrastructure. 

Transitional risks: as society moves to a lower-carbon way-of-life, businesses face higher costs from new policies, laws and other regulations as well as risks arising from changes in technology and consumer trends. 

Liability risks: worldwide businesses that fail to mitigate, adapt to, disclose or comply with changing legal and regulatory expectations increasingly face litigation, reflecting advances in attribution science, evolving legal disputes, changing public sentiment and a greater focus from regulators and investors wanting to ensure delivery of necessary disclosure and compliance with an ever-growing regulatory landscape. 

These direct and indirect effects of climate change will impact businesses in different proportions. Some businesses will be more concerned by regulatory requirements while others about loss of assets through physical damage. Whatever the sector, businesses will need to consider all these risks, both short and long term. In the case of the construction sector, life cycle considerations are particularly challenging.

The challenge facing construction sector companies, particularly those exposed to the need for large volumes of fibreboard, is turning the carbon-intensity of the legacy industry and the expanding landscape of climate-related regulatory requirements and costs from a business threat to a market opportunity.