Worked examples, written from public plans and reports. Details changed; no client is described.
A first climate statement
A listed horticultural company preparing its first climate statement had plenty of readily available data on heat, drought, frost, hail, fire and flood.
The challenge was not finding more climate information. It was working out which risks were material to the company’s prospects, what it could support saying about them, and where further analysis was actually worth paying for.
Approach
We tested the reasoning behind the proposed disclosure: the pathway from climate change to business effects, the evidence already available, and where the gaps really were.
Past heat and dry years showed potentially significant effects on yields and water costs, but the financial outcome depended heavily on when events occurred and what management chose to do. Rather than forcing a precise loss estimate, the better next step was to explore how different management responses and risk appetites performed across hotter and drier futures.
A different risk emerged more clearly. Insurance renewals, broker advice and financing terms showed that worsening physical hazards could affect insurability and access to credit before physical damage itself became the largest financial cost.
That risk could be supported using existing business records rather than another climate model.
What they got
A first disclosure that distinguished between risks needing qualitative explanation and those that could support quantitative financial ranges, with the sources and limits of the evidence made clear.
It also showed where further analysis would add value – and where it would simply add cost or false precision.
The result: less unnecessary analysis, less noise, and a clearer account of the climate risks investors and lenders actually needed to understand.
A lake in a city park
A parks agency needed to set conditions for a major stormwater project entering a spring-fed lake: what the design must achieve, what it must not do, what should be monitored, and who would have responsibility over its operating life.
Approach
We worked from those requirements to the questions that had to be resolved. We separated them according to the kind of evidence or decision that could resolve them: existing evidence, new measurement, modelling, monitoring and adaptation, or an institutional decision. For each information gap, we asked whether resolving it would materially change the conditions the agency should set for the project.
Findings
We found that more climate modelling would not resolve the central questions. The city’s existing model could be rerun with its updated design storm. Erosion could be assessed using existing information on soils, slopes and current condition, while several ecological questions depended on missing measurements, such as lake temperature and spring flow, which were cheap to get.
Where future performance could not be settled in advance, monitoring thresholds and an adjustable design proved to be more useful than additional precision. Other questions – what the lake was for, what change was acceptable, and who maintained the system – required policy and agreements rather than datasets.
What they got
A structured map of what was already known, what needed measuring, modelling or monitoring, what needed deciding, and what was worth commissioning – in the order those things mattered – plus a defensible basis for the project’s conditions.
A supply plan’s next decision point
A water utility approaching a major supply decision had a portfolio of options and a supply gap opening over the next fifteen years. It also had a long list of plausible studies and a string of unresolved questions. It needed to know which of those questions actually made a difference to when – or whether – it acted.
Approach
We worked backwards from the next point at which a decision had to be made: what would trigger the decision, what quantities and judgements governed them, which parties owned them, and how sensitive the decision was to each. We then assessed the proposed studies to see if their findings would make a difference to the decision.
Findings
The decision depended on a small number of things: how quickly shortages and storages could move under severe dry conditions, how long major supply options take to build, and what level of restrictions the community could be expected to tolerate.
We found that evidence that could shorten build time or establish the viability of major options would make a difference to the decision. Greater precision in the central demand forecast, or yields from options too small to close the gap, could not. Some apparently weak options turned out not to be weak – it’s just that the evidence about them was thin. And because every study’s results would rest on the plan’s baseline assumptions, testing that baseline first had unusually high value.
What they got
A clear account of what the decision depended on, and a study program that prioritised the research that would deliver findings about that dependency and resolve a consequential weakness in the evidence.
