Latest Intergenerational Report lays bare urgent need for accelerated business climate-change mitigation & adaptation

The Intergenerational Report handed down by the Treasurer, Jim Chalmers last week paints a picture of the forces that will shape the Australian economy over the next 40 years.

One of those forces (and in my view, most important) is climate change.

Losses in productivity, agricultural production, tourism demand and increased costs due to extreme weather disasters will impact our economy.

While the headline figure of a potential $135 billion to $423 billion reduction in economic output due to climate change drew significant attention, the Intergenerational Report also unveiled a treasure trove of additional insights.

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Those insights underscore the importance of businesses taking more decisive climate action and preparing for necessary adaptations. Here are some of those insights, with the implications.

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Insight: Crop yields could be up to 4% lower by 2063 if global action fails to keep temperature rises below 3°c this century.

Implication: Businesses with an agricultural supply change have both an opportunity and responsibility to help the sector mitigate the impact of increased temperatures on crop yields and adapt to changing conditions through regenerative and innovative farming techniques and through exploration of alternative crop options.

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Insight: Workers in industries such as agriculture, construction and manufacturing will be at risk of heat stress as temperatures rise and may have to work reduced hours.

Implication: As temperatures rise, businesses that need workers to spend significant times outdoors will need to demonstrate action they take to safeguard employee health and safety.?

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Insight: As the population continues to age over the next 40 years, the overall workforce participation rate is projected to decline gradually from 66.6% to 63.8% in 2062-63.

Implication: Businesses will need to think differently about how they recruit and retain their workforce. This includes creating opportunities to bring more under-represented groups into the workforce.???

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Insight: The impacts of climate change will vary across the country.

Implication: Businesses with major operations in areas such as WA could face greater disruption to productivity than other states and territories so will need to prepare accordingly, through detailed business continuity planning and scenario modelling.

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Insight: Australia’s top attractions are in regions likely to be increasingly susceptible to natural disasters, which may cause travel disruption and reputational harm. The report notes 80,000 tourists cancelled or postponed activities in the immediate aftermath of the 2019–20 bushfires.

Implication: Promoting less-visited destinations, eco-friendly experiences and sustainable tourism are just some the mitigation and adaption actions the tourism sector needs to accelerate.

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Insight: As routine tasks become increasingly automated, jobs are evolving towards higher skill and qualification requirements.

Implication: Investing in the re-skilling and capability-building of the workforce will rise in importance over the coming months and years. Business partnerships with educational institutions that ensure we’re developing and nurturing the skills and strengthens required will be key.