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Climate Feedback to Business Ecosystems: Extreme Event (s) and Disruption (s)

Updated: Mar 26, 2022

Reflection on the ‘Knowledge Across Borders’ (知识无疆界) webinar series jointly organised by Durham University, UK and the Chinese Academy of Sciences, China on ‘Climate Change, Extreme Events and Health Risks’. To watch this webinar, click link.

Extreme climate events and associated disruptions have always been part of human experience. More recently, scientific evidence shows that,

'Changes in the climate are widespread, rapid, and intensifying, and unprecedented in thousands of years.' – The Sixth Assessment Report, Inter-governmental Panel on Climate Change (IPCC).

On 15th October 2022, Professor Tianjun Zhou, a senior research scientist at the Institute of Atmospheric Physics, Chinese Academy of Sciences and Professor Glenn McGregor, a climatologist at the Department of Geography, Durham University, presented scientific evidence for human influence on climate change, which, in turn, creates more hazards in the environment and threatens human health. For example,

Evidence from the natural world, according to IPCC, includes,

  • In 2019, CO2 concentration in 2019 were higher than at any time in at least 2 millions-years.

  • In 2011-2020, the annual average Arctic sea ice area reached its lowest level since at least 1850.

  • The global mean of sea levels has risen faster since 1900, than over any preceding century in at last the least 3000 years and the global ocean has warmed faster over the past century than since the end of the last deglacial transition (around 11,000 years ago).

  • The global surface temperature has increased faster since 1970, than in any other 50-year period over at least 2000 years. Temperatures during the most recent decade (2011-2020) exceeded those of the most recent multi-century warm period, around 6500 years ago. With an incremental increase of global warming, the changes get larger.

Evidence from the social world, according to various media sources in 2021, for example,

Although linking any single event to climate extreme may be debatable, the frequency and intensity as regards the occurrence of these events have given a heightened awareness in terms of probability in relation to the increasing interaction between mechanisms in the climate system, which exceed a threshold, thus leading to ‘abrupt climate change’. Such interaction provides observed climate feedback to the environment in many ways. For example, climate change not only contributes to global warming but also intensifies the water cycle, whereby more water is held in the atmosphere, resulting in heavier precipitation on the one hand and the escalation of dry seasons and drought on the other hand (IPCC, 2021).The observed causes for climate change include natural internal processes, external forces, and anthropogenic changes in the composition of the atmosphere (e.g., CO2 emission) and land use (e.g., land alteration, agriculture), of which human influence has become a key factor that significantly drives climate change, as evidenced by heatwaves, floods and sea-level rising in coastal cities.

In addition to environmental impacts, Professor McGregor also reminded us of the possible social impacts, in particular to human health. Worrying about the relationship between climate and health traces back before 100 BCE, with Hippocrates (400 BCE) writing about the influence of air, water and situational place, according to where people live. Such recognition has laid out the foundation for the contemporary disciplines of biometeorology and environmental health. Taking an example of heat, relationships between heat and temperature and mortality generally represent in a U-shaped curve, which means that both the lower temperatures and the higher temperatures are correlated with the higher rate of mortality. In recent years, heat-related mortality generally increases across major cities, even though climate sensitivity varies from city to city. For instance, Beijing’s heat-related mortality is relatively low with a threshold temperature at 25 degrees beyond which the mortality gradually increases. This is in contrast to London where the morality rises rapidly when the temperature threshold exceeds 20 degrees.

How May Climate Extreme Events Translate into Business and Organisation? – Organisational Disruption

On many occasions, people make no explicit distinction between extreme events and disruptions, which, in any case, are fundamentally different. An extreme event is a discrete episode or occurrence, which can cause various forms of disruption to organisations. For example, climate extreme events (e.g., heat, storms) have a direct impact on the airline industry, resulting in weather-related flight cancellations and delays, which disruption may result in other forms of adversity to other actors, such as a liability risk to the insurance companies, a demand disruption to hotels, amongst others. Organisational disruption is, indeed, deeply rooted in the structure and process established by organisations, which can become vulnerable in the face of adversity. The potential magnitude of organisational disruption can be influenced by how well members in organisations work together in preparing for and responding to adverse situations. This includes those of cognition (how people understand the nature of disruption), behaviour (how people act in the face of disruption), and emotion (how people feel about disruption). Potentially, these factors may be intensified by increasingly interconnected and interdependent business ecosystems, in terms of speed and complexity of disruptions. The term, ‘business ecosystem’, highlights how organisations interact and are interdependent on others, in generating reservoir needed for their survival and growth. Simply speaking, this is because organisations are rarely self-sufficient in generating all necessary resources internally. Organisations, thus, operate in a nexus of connections with other actors (e.g., organisations, institutions, and individuals), with which to conduct essential activities in order for its survival or improvision for efficiency, through inter-organisational collaborations and cooperation (e.g., supplier-buyer activities, R&D alliances, co-marketing). Any single event occurring in the environment is likely to affect the entire ecosystem, even although actors may experience disruption differently, depending on the degree and type of interdependence amongst organisations in the system. The outcomes of organisational disruption vary but commonly reveal what Mckinsey reported in 2020 as being,

'Greater frequency and severity of climate hazards can create more disruptions in global supply chains – interrupting production, raising costs and prices, and hurting corporate revenues' – Mckinsey Global Institute, 2020.

Beyond these measurable causes and consequences of organisational disruption, however, what we lack is an understanding of the dynamic and transformative process of disruption over time, which is essential in building resilience in organisations and society.

This blog expresses the author’s views and interpretation of comments made during the talk. Any errors and omissions are the author.

Jacqueline You is an ESRC Postdoctoral Fellow at Durham University Business School, UK. Her interdisciplinary research focuses on organisational resilience and disruption in the context of business ecosystems through the relational lens. Prior to entering into the world of academia, she worked for multinational corporations, primarily in the department of global supply chain networks and strategic procurement in China, the US, Canada and France and then, as an international entrepreneur based in the UK.

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