In boardrooms around the world, a new reality is sinking in: Those organizations best able to marshal data to absorb, avoid, or reduce climate risk—and find opportunity in the tumultuous years ahead—will hold significant competitive advantage and better reflect society’s values.

In the wake of an unbroken series of extreme climate events that have disrupted supply lines, devastated communities and businesses, and dramatically altered markets, company leaders are digesting the news that a global temperature rise of 3.2°C could wipe out nearly a fifth of global GDP—$15 trillion in today’s dollars—by 2050.

With disruption and uncertainty the new normal, what’s clear is that the traditional list of factors in any major business decision—revenue, brand identity, market share—now has another strategic layer: sustainability. The urgency behind the sustainability imperative is not just born of charitable intentions and corporate social responsibility; it’s recognized as a matter of basic business continuity and survival.

Geography looms large for scientists in the fight against climate change—likewise, executives are taking a geographic approach backed by data science to understand where assets lie in relation to climate threats, like flooding or excessive heat, and to visualize how company actions affect the environment. Some of the world’s biggest and most powerful retailers, shippers, and manufacturers rely on a modern geographic information system, or GIS, to supply this unified perspective on operations, vulnerabilities, and impacts.

The spatial awareness provided by GIS, known as location intelligence, reveals patterns and connections that would be lost in a spreadsheet. Executives can visualize business metrics, weather predictions, and other key data that vary dramatically by location. For instance,

International businesses must also navigate climate-related regulations and legislation unique to each country. With GIS, executives can analyse these complex data streams in a familiar format—a map—and easily share findings with fellow executive stakeholders.

Location intelligence can transform decision-making in the many places where sustainability meshes with daily business operations and long-term planning (see sidebar “How GIS Contributes to Sustainable Business”). For executives overseeing site selection, supply chain management, field operations, and sales and marketing, spatial analysis guides them toward a better relationship with the environment and a healthier business future.

Resilience and Reduction: The Twin Engines of a Climate Sustainability Strategy

In a sign of how seriously CXOs are taking sustainability, decision-making power around climate issues now often resides with the chief risk officer or CFO. These executives have defined two primary sustainability strategies: resilience and reduction.

Resilience efforts are about defending an organization against climate impacts and withstanding such impacts when they are impossible to sidestep. It’s a concept that lies at the heart of modern business continuity. Reduction, on the other hand, describes actions that companies take to minimize harmful impacts on the environment. For many companies, reduction takes the form of eliminating or minimizing greenhouse gas (GHG) emissions. According to a recent report, at least a fifth of the world’s biggest 2,000 public companies are currently committed to net-zero emission targets.

Resilience and reduction are two sides of the same coin: a company that optimizes transportation routes to reduce its carbon footprint, for instance, also creates a more streamlined network that may be less exposed to floods, storms, and other climate hazards. An organization that retools operations to use fewer natural resources also ensures a healthier supply of that resource in the future. Whether interrelated or taken apart, resilience and reduction strategies are best understood and implemented through the lens of location intelligence.

In the short term, GIS offers a “single pane of glass” through which decision-makers can anticipate weather events to ensure employee and customer safety, create location-specific mitigation strategies, and coordinate efforts to minimize disruptions and maintain continuity. In the long term, GIS-based modelling can flag the location of worsening climate conditions, prompting business leaders to harden or relocate assets and infrastructure that are needed to serve the next generation.

By modelling facilities or supply chains into a digital twin—complete with data from IoT sensors and satellite or drone imagery—executives gain a comprehensive view of business activity across land and sea. From this vantage point, they can analyse supply chain impacts, create more efficient routing, and ensure long-term responsible use of resources.

Thanks to the long reach of IoT data and location technology, companies can surface these insights without dispatching employees and vehicles to far-flung locations—another way for a business to meet net-zero and other reduction goals.

No Exit from a World of Climate Change

A host of motivations has forced climate onto the C-suite docket, and no industry or region has been spared. Business activity itself is slowed by worsening climate conditions: researchers have found that poor air quality reduces shopping activity, and rising heat cuts into worker productivity. The COVID-19 pandemic has demonstrated that in today’s globalized economy, knock-on effects can ricochet from loading docks in Vietnam to store shelves in Minneapolis within days and linger for months or longer.

Companies that rely on natural resources must guarantee that their source materials won’t be wiped out by rising temperatures, droughts, deteriorating biodiversity, or floods. Meanwhile, storms and cyclones have picked up in nearly every corner of the globe, wreaking havoc on assets and causing flooding that can shutter small businesses and restaurants. US flood insurance rates are set to increase for 77 percent of policyholders, according to a recent study.

Consumer sentiment is also changing dramatically, as younger generations leverage their wallets to reward organizations that practice holistic sustainability. On a recent WhereNext webcast, a snap poll revealed that competitive differentiation and brand leadership were the main drivers of sustainability efforts. Insurance firms are pushing companies to build climate risk analysis into asset evaluations, and Wall Street banks want to protect investments from long-term climate disruptions.

C-suite leaders are even feeling the effects of this turning tide on a personal level. A growing number of CEOs now find their bonuses tied to environmental goals. Meanwhile, activist investors are successfully pressuring some the world’s most powerful companies into taking the difficult steps necessary to cut carbon emissions.

BlackRock CEO Larry Fink, head of the world’s largest money manager, has been among the most vocal leaders in pushing companies to build sustainability into their business models, citing a “tectonic shift.” That shift and the urgency it reflects are written in the numbers: For the first time, banks are committing more financing to green bonds and loans than to fossil fuel, according to recent Bloomberg data.

GIS: An Organization’s Central Nervous System for Resilience and Reduction

For many C-suite leaders, resilience has been elevated to a top-line priority because weather events and other threats are affecting their ability to fulfil customer expectations day in and day out. Resiliency could roughly be described as a defensive posture—but as with any great defence, it contains elements of proactive offense.

GIS furnishes companies with a central digital nervous system that contextualises and analyses data. Leaders can use this system both to inform long-term resilience strategies and respond to near-term dangers triggered by weather or climate events. Location-savvy organisations—including one of the world’s largest retailers—rely on real-time, GIS-powered dashboards as the brain of emergency operations centres (EOC) and global security operations centres (GSOC).

As data on potential natural disasters flows to these centres of operational awareness, decision-makers can weigh complex factors and coordinate fast, precise responses.

By adopting a geographic approach, business leaders can see weather events developing and begin enacting location-specific mitigation strategies. Data layers showing climate patterns reveal where rainfall has historically led to river flooding, and how that might affect properties, employees, and communities. With advance knowledge of impending weather events, a tech company can warn employees not to commute into the office, a restaurant chain can stock up on shelf-stable goods, and a manufacturer can order components from an alternate supplier.

Location intelligence generated from GIS software empowers companies to not only improve their own resilience, but also strengthen the communities where they operate. The major retailer cited above orchestrates natural disaster responses with local and state governments and relief organizations. Dashboards can identify store parking lots where displaced families might gather, or where surpluses of critical supplies could be staged. During Hurricane Florence, the company’s spatial awareness enabled the emergency team to source and donate massive air conditioners, which were airlifted to a sweltering North Carolina shelter completely surrounded by water.

50- and 100-Year Business Continuity Planning

To ensure long-term resilience, companies are using cutting-edge tools like AI and machine learning in conjunction with GIS to map patterns in climate data decades into the future. By aligning investments with those predicted trends, a business can avoid pouring resources into areas with a high chance of being underwater in 30 years or wiped out by forest fire. Examples include:

• AT&T is carrying out advanced spatial analysis of climate risks that goes far beyond examining FEMA floodplain data. Through a partnership with the US Department of Energy’s Argonne National Laboratory, the world’s largest telecom company has created forecasts showing how infrastructure like cell towers or base stations could be affected by 50-year storms. The granularity of this data allows AT&T to anticipate with 95 percent confidence that a given 200 square-meter plot of coastal land will see 15 feet of maximum flooding in the coming decades. By layering those models onto GIS-based smart maps, decision-makers can make the call about which assets to strengthen or relocate, which in turn helps keep internet access on in challenging conditions.
• The furniture giant IKEA uses 700 million cubic feet of wood a year. That reliance on a natural resource and commodity that can take 140 years to mature has made sustainable forestry a vital interest for the company. The investment arm of Ingka Group, which operates the majority of IKEA stores worldwide, owns swaths of forest in the US and Eastern Europe. It uses location intelligence to guide ecologically sound methods of timberland management. Based on data from field agents and satellite imagery, the company’s location analysts can identify which tracts contain tree species most vulnerable to threats like the invasive bark beetle. With this information, they can prioritize areas that need protective treatments, staving off costly losses. Because much of this data can be tracked through technology like remote imagery, Ingka minimizes its own environmental impact on the regions where it operates. The company relies on GIS to monitor biodiversity measures like the health and population levels of animal, plant, and insect species on its properties. This holistic understanding of woodlands and the ecosystems they maintain is integral to maintaining long-lived, productive forests.
• Taylor Shellfish Farms, the largest shellfish producer in the US, with farms extending across 10,000 acres of Pacific Northwest tidelands, knows that keeping a sustainable supply of food and drink on our dinner tables requires resource planning on the scale of decades, not months. Company leaders use pH sensors and GIS to track the acidity of ocean water and determine how well oysters respond. By comparing farms and identifying techniques that lead to improvement, they’ve been able to grow in spite of climate-related disruptions that have crippled other hatcheries.

Companies across the manufacturing sector—from pharmaceutical giants to soda makers—are turning to location intelligence to assess and reduce water use, concerned that unchecked consumption could create long-term scarcity at production facilities and in surrounding communities.

The Net-Zero Zeitgeist

As many of the most influential companies in the world sign on to net-zero commitments, it’s increasingly evident that achieving these goals could fundamentally shift how businesses source and ship goods and materials and alter the kinds of partners they work with. In September, 86 companies including Salesforce, Procter & Gamble, and HP joined an Amazon-led initiative to be carbon-free in their operations by 2040. The list of businesses that have taken the Climate Pledge now numbers over 200, collectively employing more than seven million people. To cut greenhouse gas emissions and reach these lofty goals, businesses will need visibility into their own operations and a precise view of where they can make the biggest cuts.

In 2019, almost a quarter of greenhouse gas emissions came from industrial production, according to the US Environmental Protection Agency. With the effects of climate change already striking at the bottom line of many companies, executives can see that contributing to global warming will ultimately hinder their own success and viability. That’s made reduction a strategy for business survival.

By necessity, reduction strategies must extend beyond greenhouse gases to account for the natural world in all its complexity. Companies are becoming more mindful that diminished ecosystems lead to resource-poor environments and land that can’t recover from climate change. Farms and forests with strong biodiversity ratings are ultimately more resilient and productive. It’s yet another motivation for businesses to develop a detailed picture of how they use resources and impact the environment, and where efficiencies might escape the naked eye.

Reduction: When Less is more

Location intelligence supports reduction efforts on a number of fronts, helping executives stay accountable as their organizations lower greenhouse gas emissions. Dashboards allow executives to monitor offices, stores, and factories, along with their GHG metrics. GIS-based planning is essential in sourcing natural resources sustainably, and the technology also aids communication: web-based smart maps help companies share reduction results with customers, investors, and the public.

The example of a large European grocery chain shows how the positive benefits of reduction can ripple through an organization. Already ranked first in global sustainability studies, the grocer decided to use GIS to move toward holistic sustainability. Reducing the CO₂ emissions of its fleet of vehicles allowed the company to hone its competitive advantage both as a brand and an efficient operator. The company employed GIS to unite multiple data streams related to emissions—creating a big-picture visualization that empowered smart decision-making.

Using an algorithm that accounted for the effects of road slope, speed, load factor, and other parameters, company leaders were able to calculate the emissions for every engine type in its fleet, from diesel to electric, across all transportation routes. By feeding this information into smart maps, the company confidently predicted which engines would be most efficient for each route, identifying adjustments that would optimize fleet performance, eliminate carbon emissions, and reduce costs.

The Long Reach of Location Intelligence

Combining GIS with data from satellite imagery, drones, and IoT sensors gives decision-makers access to patterns that would have been invisible even a few years ago. By reducing the need for in-person visits to sites or assets in the field, companies gain accuracy and cost savings while reducing environmental impacts.

A recent investigation of deforestation in the Amazon shows the power of these technologies. An ecologist concerned about actions taken by a cacao company in the Peruvian rain forest relied on geospatial analysis and remote sensing to prove that old-growth forests had been illegally logged. A company could use the same tools to vet overseas partners or monitor the effects of its own operations.

Supply chains are attracting attention as a major source of carbon emissions and a place where route optimization could make a big impact on sustainability goals. According to analysis by the Boston Consulting Group, eight supply chains account for over 50 percent of greenhouse gas emissions each year.

New location-aware tools are helping businesses visualize how their footprints extend across global shipping lanes. For instance, the Seaport Simulator, developed by design and engineering firm Atkins, uses overhead lidar imaging to plot a seaport down to the height of seawater at the docks. This digital twin also extends across oceans, revealing partner ports, shipment data, population data, maritime travel routes, and climate patterns—a comprehensive, GIS-based picture of materials en route in all directions. Location analysts have been testing how resilient supply routes will be to climate disruptions, but a similar process could be used to run simulations on which alternate shipping lanes best support reduction and decarbonization.

Seventh Generation Decision-Making

When the world moved at a slower pace, society and businesses thought in generational terms. In the days when wines took longer to age, the truism was that you drank from the cellar your grandfather acquired, and bought bottles that your children and their children would one day share.

The Haudenosaunee or Iroquois confederacy is famous for its “seven generation” form of decision-making, in which leaders consider how today’s choices will affect descendants seven generations from now.

As climate change’s threats reshape businesses, this long-term view is taking hold in the most influential offices in the world. Ensuring the future requires a clear view of today’s operations and tomorrow’s repercussions, making location intelligence an invaluable part of achieving holistic sustainability across all facets of business activity.

This article originally appeared in the global edition of WhereNext.

In a move that could alter the practice of buying and selling homes, real estate broker Redfin is adding climate risk scores to sale listings. Home buyers can now evaluate climate risk the way they assess local schools, tax rates, and neighbourhood appeal.

The new data addresses the public’s growing interest in understanding the shifting nature of risk. It’s a pursuit shared by business leaders, many of whom already use geographic information system (GIS) technology to anticipate climate shifts and adjust investment strategies accordingly.

Climate Risk on Buyers’ Minds

Nearly 80 percent of current and potential homeowners told Redfin they’d be hesitant to buy a home in an area with frequent or intense natural disasters. In the same survey, nearly half of people planning to move in the next year indicated that extreme temperatures and increasing natural disasters played a role in that decision.

Given the weather disruptions that have already beset many areas of the world, it’s no surprise that home buyers and businesses are considering climate risk in their investment decisions. In each of the past 40 years, the United States averaged seven weather disasters costing more than $1 billion (adjusted for inflation). But in just the past six years, the average number of $1 billion events per year was more than 15, according to NOAA data. These events can devastate homes, businesses, neighbourhoods, critical infrastructure, and supply chains.

GIS-generated location intelligence has long helped companies respond to weather events. Now, its ability to model long-term weather patterns and related climate risk could shape real estate investments for individuals and organisations.

Assessing Climate Risk—A New Normal for Real Estate?

Climate risk data similar to the kind Redfin now provides is not only valuable in home buying but also increasingly important to commercial property investment decisions. Commercial real estate leader CBRE estimates that 35 percent of global REIT properties are exposed to hazardous climate events such as inland flooding and hurricanes.

To create more resilient investments, real estate investors are increasingly using climate risk data to make decisions in locations susceptible to climate change, according to the Urban Land Institute. But they’re not evaluating climate risk alone; they’re also factoring in efforts by cities to increase resilience to climate change.

In industries like commercial real estate, telecom, and retail—where choosing the right location is key to the bottom line—predicting climate impacts on potential investments is becoming a competitive advantage.

For example, engineering, design, and project management firm Atkins uses GIS technology to perform climate modelling, drawing on the precision of GIS-produced location intelligence to steer clients toward safer investments and ways to fortify their supply chains.

Atkins’ simulations use predictive analytics to create location intelligence on climate scenarios. The resultant GIS map shows how tropical storms or extreme temperatures might disrupt the flow of shipping containers across global supply lines years from now.

This article originally appeared in the global edition of WhereNext.

In locations around the world, the impacts of a changing climate are increasingly hard to miss. Rain-swelled floodwaters rise over railroad tracks, halting trains loaded with consumer goods. Landslides choke roads, forcing cargo trucks to reroute on the fly. Firestorms threaten data centres that process millions of e-commerce transactions.

Natural disasters and adverse weather events triggered by global warming are not limited to any one region or industry today, but pose threats throughout the supply chain, creating huge challenges for COOs and other business leaders in retail, manufacturing, insurance, utilities, and beyond.

Climate-related interruptions to the international flow of goods—which is worth roughly $20 trillion—slow the delivery of food, medicine, and materials like computer and auto parts, and can result in billions in economic loss. The interconnectedness of the global market means that rising sea levels in Vietnam, for example, can have a direct bearing on the sale of AirPods or Nike shoes in Moscow or San Francisco.

Among forward-looking businesses, a new effort is afoot to navigate disruptions by leveraging data analytics and simulation-based location intelligence that forecast climate trends next season or decades into the future. By studying their supply chains in detail, companies are quantifying how resilient they are. Where they identify vulnerabilities, they are taking pre-emptive action to mitigate potential impacts and adapt to future conditions.

“Across all industries, we’re getting [the question], ‘What can you tell us about climate change? How resilient are we?’” says Stephen Bourne, a lead resilience modeler, engineer, and project director at Atkins, an engineering, design, and project management firm and member of the SNC-Lavalin group.

Locating Tomorrow’s Trade Danger Zones

Location intelligence—a form of business intelligence derived from a geographic information system (GIS)—plays a prominent role in managing climate risk and supply chain continuity. With GIS technology, analysts can create smart maps that layer climate information, hazard data, and satellite imagery on the regions and networks that compose a business’s supply chain. The insight produced by such maps—like those used by AT&T or the City of Boulder, Colorado—can help business and community leaders make decisions to reinforce or relocate coastal facilities in areas where storms will increase, for example, or allocate more funds for floodplain management.

Armed with GIS technology and artificial intelligence models that sharpen predictions, some companies are taking this forecasting to new levels of clarity. One such innovation is the Seaport Simulator developed by Atkins. The program applies predictive analytics, powered by global-scale simulation, to historical weather data and the latest meteorological research. The resulting model, Bourne says, creates thousands of climate scenarios across GIS maps of an organization’s supply lines. The simulations yield location intelligence showing how factors such as tropical storms or extreme temperatures might slow or disrupt the flow of shipping containers over sea and land from now through the year 2050.

“One of the most powerful things you can do is show the consequences of decisions a company makes about how it manages its supply chain over the next 30 years,” Bourne says.

The Seaport Simulator does not purport to tell decision-makers the future, but assigns probabilities to a staggering number of possible climate and cargo-flow outcomes. It presents users with the likeliest eventualities, accompanied by an estimated margin of error.

Protecting Supply Chain Infrastructure—and the Bottom Line

The program essentially creates a digital twin of a seaport or trade area, including all the transportation modes linking it to goods producers and consumers around the world. The digital twin uses 3D modelling, remote sensing, and thousands of points along a supply chain to create a dynamic visual of what might otherwise be dry statistics on paper. Its sophisticated simulation models and level of detail are such that a supply chain manager could see how an investment made next year might be affected by spring rainfall in 2030 on a specific section of train tracks.

The GIS-based simulator grounds smart business strategy on a foundation of location intelligence and hard data. In addition to helping protect supply chain infrastructure, the technology can help safeguard a company’s bottom line. A CFO could use the simulator to measure return on investment from capital infrastructure projects—like raised roads or railways or reinforced bulkheads—against the potential cost of not taking action. In a budget meeting, a map-based simulation comparing scenarios could be the difference between achieving and not achieving desired funding for climate resiliency.

“Executives look at this as a treasure trove of information that they can use to make decisions much better than they’re currently making [them],” Bourne says. “The more information you can get to them, the better.”

A Port Simulates Its Future

The first client to use the Seaport Simulator was the Port of Prince Rupert—Canada’s third busiest seaport, responsible for almost 40,000 acres of landholdings and harbours along British Columbia’s North Coast. Shipping over 32 million tonnes of import and export cargo per year, the port is connected to railways and shipping routes from Canada and the US to China, South Korea, Japan, and beyond. The supply chain hot spot is also subject to rugged weather conditions: the surrounding region sees the second-highest rainfall in North America, multiple hurricane-force storms a year, and a 25-foot tide swing.

With the help of funding from Transport Canada’s Transportation Asset Risk Assessment (TARA) initiative, the port contracted Atkins to help pinpoint where infrastructure in the port and cargo movement across its global network would be most exposed to climate risk. With insight from the location intelligence generated by the Seaport Simulator, they could make better decisions about their own operations, and pass those insights on to their stakeholders, including the terminal operators, shipping companies, and transportation conglomerates that rely on the port.

“International transpacific trade is critical to our economies,” says Jason Scherr, manager of environmental sustainability at the Prince Rupert Port Authority, who worked with Bourne and Atkins to tailor the simulator’s algorithms to the seaport’s needs. “Climate change and potential future impacts are always on our minds. Everyone is thinking about it, whether you’re a shipping company, a port, or someone running a trucking company. Our intent with the project is to look across our entire port complex and into the future to gain a better understanding through the data analysis and modelling.”

Potential climate-related impacts could be related to sea level rise, rainfall, winds, extreme temperatures, and tropical cyclones along ocean trade routes. Conceivably, all those variables could affect a single journey of cargo. A ship departing from Hong Kong might be delayed or have to reroute because of hurricanes whirling across one stretch of the Pacific Ocean, and forced to speed up to outrun similar storms in other waters. Sea level rise and high winds could interfere with port operations and docking procedures as the cargo ship approaches Prince Rupert. And finally, once the containers have made it onto trains heading toward cities like Chicago, their progress could be interrupted by ice and freshets (flooding from melted snow), landslides loosened by rain, and rail operations slowed by extreme high and low temperatures.

You can create a scenario where you elevate a track and then rerun the [model], and you can measure, ‘What is the impact of doing that?’ and start to estimate your return on investment and make the case for why you should act now instead of waiting for it to be a problem.

Stephen Bourne, Atkins

A GIS-Enabled View, from Harbor to Continent

Bourne’s team at Atkins used weather forecasts from the latest global climate models and findings from recent climate research efforts to drive the simulation. Based on those inputs, the GIS digital twin identified points along the cargo journey where weather or climate-related events might interfere.

The team then used powerful multi-core computers to run massively parallel simulations to determine the probability that climate activity like storms or floods would increase or decrease at those critical locations over the course of the next 30 years. By using simulation technology to model tens of thousands of such runs, the simulator established the range of possibilities that the seaport should be concerned about.

The Atkins team also used overhead lidar imaging to capture 3D images of the port’s buildings, roads, docks, and rail lines—ultimately building a highly detailed representation of the port in GIS. This digital twin made it possible to study how climate projections would affect port operations on a facility-by-facility basis. A high level of accuracy was essential to ensuring that the model could tell seaport administrators specifically where they may have trouble spots and what they needed to do to mitigate and adapt.

Interestingly, the analysis revealed several bright spots for the port, showing that global climate change dynamics may actually result in fewer impacts for the port’s supply chain, and that the operational style the port has developed to tackle its current climate has prepared it well for the specific impacts it is likely to face.  “Climate change impacts are very location-dependent,” Bourne says.  “There’s no sort of general statement you can make about how climate change will affect all places.”

Simulating Climate Risks and Opportunities

Bourne stresses the importance of accuracy and detail in studies of sea level rise. Due to the complex hydrodynamics of the port, and depending on the time of day, the water level on the north side of the island where the port is located is generally about eight inches higher than the water level on the island’s south side. That detail might sound insignificant, but depending on flood inundation levels, eight inches might end up determining whether a port remains operational or has to shut down. Fortunately for the Port of Prince Rupert, the simulations showed minimal future impacts from sea level rise. Location intelligence is the only practice that delivers this insight.

“We need to zoom in to the port and get 3D, accurate depictions of the structures so we can understand what their flooding levels are,” Bourne says. “It’s a matter of looking at the data at the right scales. On one hand, we need centimeter-level accuracy around the port itself. On the other, we need to zoom back out to the whole globe to understand oceanic and continental impacts. It would be very hard to convey what we’re doing in this project if we didn’t have GIS to show those scales in context.”

During a base run that modeled climate effects if no actions were taken, the Seaport Simulator offered some largely reassuring results, indicating some positive opportunities. A research study showed that tropical storm activity was actually expected to decrease in the western Pacific, making for a freer flow of cargo along certain shipping lanes than currently exists. The simulator also showed that with the expected sea level rise of 0.2m at the port by 2050, docks and rails that play a key role in cargo processing would likely be unaffected.

The findings did establish that there is a potential for future changes in weather patterns including wind and rainfall, as well as an impact from extreme cold weather on rail lines and winter cargo fluidity. In response, the Port of Prince Rupert is looking at opportunities to harness real-time and predictive weather data to assist with operational planning. This includes continuing to build on knowledge of the regional marine ecosystem and understanding the potential impacts on infrastructure that can be addressed with mitigation measures.

Simulations modelling the seaport’s potential actions could help guide investments, like hardening shorelines or adding adaptation planning for future projects to protect physical assets like buildings and roads. When port planners, engineers, or decision makers see those scenarios mapped in GIS, they’re better able to understand the financial and operational implications of their decisions.

I don’t think I’ve ever seen a better use of GIS than this project.

Stephen Bourne, Atkins

The Global Supply Chain’s Complex Future

The Seaport Simulator has already begun generating interest with other clients, which hasn’t surprised Bourne. He says the choices that supply chain executives need to consider today cut across complex swaths of geography and data, and location intelligence can help those business leaders make and defend difficult decisions.

For example, threats from climate change have already persuaded some companies to begin paring down their suppliers, working with leaner networks they can trust and collaborate closely with. While there is wisdom to that strategy, a network that is too geographically concentrated is also more easily knocked out by a region-wide weather event. However, companies that employ a more geographically diverse supply base may have less sway over those partners in addressing climate resiliency. A balance must be struck to achieve efficiency, safety, and influence, and smart maps created by tools like the Seaport Simulator can help organizations achieve that balance.

The predictive analytics behind the Seaport Simulator might also be put to work to help executives meet other goals, like reaching net-zero carbon emissions by a certain date. Shipping simulations could be run along specific supply chain routes, testing for varying levels of frequency and speed to determine how carbon-related choices contribute to clean energy goals.

The technology shows promise as well in cracking the code of complicated issues like multi-port analyses. Cargo travelling from Asia to the US might have nine different ports to choose from, and a GIS-based analysis could illuminate which port will be more efficient and cost-effective. While some routes may become too volatile due to climate change, others may be opened by trends such as retreating ice cover in the Arctic, creating new transportation corridors.

GIS makes it possible to assess all these contingencies in a way that a spreadsheet can’t. “You really would not be able to grasp all the different influences and disruptors that are at play unless you looked at a map of them,” Bourne says. As the threats of climate risk intensify, the need for innovative, location-specific strategies to support supply chain resilience will only grow.

This article was originally published in the global edition of WhereNext 

The cost of natural disasters in 2020 was nearly twice the previous year’s total, jumping to $210 billion from $116 billion, according to a new report by global reinsurer Munich Re. Losses hit the US particularly hard, totalling $95 billion, with damage from hurricanes, storms, and wildfires weighing most heavily. Combined with NASA’s analysis pegging 2020 as the hottest year on record (tied with 2016), the numbers point to accelerating climate risk.

The losses don’t just affect insurers like Munich Re; they also impact businesses and people. Most corporate directors already see climate risk affecting their organizations, according to a recent executive survey from Columbia Law School. The survey highlights multiple motivations for directors to prioritize climate risk in business strategies—from managing cost to practicing corporate responsibility to identifying new business opportunities.

Companies worldwide are using technologies such as location intelligence and AI to predict potential climate risk and inform long-term planning. They’re also moving toward real-time situational awareness to become more resilient when responding to natural disasters and other business disruptions.

Predicting Climate-Related Risks

While no one can predict exactly where and when natural disasters or disruptions will occur, companies are analyzing historical data to predict the most vulnerable areas. This helps business leaders clarify long-term investments such as store locations, offices, manufacturing plants, and supply chain routes. For example, if location analysis shows that an area is often affected by flooding or may be in the future, supply chain managers can choose to ship or source goods another way, invest in more resilient equipment and assets, or shift key supply centres to safer areas.

Predictive climate risk analysis is fuelled by weather data, AI algorithms, and location technology that connects predictions to places and assets. Standout companies across many sectors use a geographic information system (GIS) to map and analyse information relevant to the locations where they do business.

Tackling a problem as complex as climate risk prediction is not an easy calculation. The accuracy and scale of data, the precision of AI models, and the expertise needed to tie it all together shouldn’t be underestimated. But partnerships to enable this increasingly critical practice are becoming more common. When leaders at global telecom giant AT&T wanted to map the company’s climate risk for the next 30 years, they partnered with Argonne National Laboratory, and together they applied sophisticated AI models and GIS technology to produce actionable results.

Monitoring Disruptions for Quick Response

Beyond long-term climate risk management, business leaders can also apply location technology to improve short-term disaster response. In fact, the use of location intelligence often leads to business resilience when disaster strikes. As weather events threaten, smart maps can provide companies advance notice of where threats exist, helping them make operational adjustments, then measure impacts and recover.

Imagine that a hurricane is moving toward a coastal area. A business informed by GIS-driven location intelligence would use a smart map to see at a glance how the predicted path might impact operations. Risk managers could understand, for example, which business locations fall within the affected area, the volume of sales at these locations, the supply chain partners that are at risk, where vehicles will be at the time of predicted impact, and how to reroute deliveries around or through the danger zone. After a disaster occurs, teams can swiftly measure the impacts and coordinate recovery efforts.

Businesses with data and technology in place have an advantage—the quicker executives and managers understand the problem, the quicker they can make adjustments and recover. For example, risk management teams at global auto manufacturer GM have integrated location intelligence into their operations so they can see how a disaster will impact the business—down to specific vehicle parts and their journeys across the global supply chain.

Planning a Sustainable Future

Much has been said about the dangers of continuing to build and rebuild in areas where natural disasters often occur, especially with the frequency and cost of such events expected to increase with climate change. Enlisting predictive location intelligence to make the right decisions about where to build and invest isn’t simply a matter of profit and loss; it can directly affect lives. Munich Re reported 8,200 deaths in 2020 from natural disasters alone (to say nothing of the COVID-19 pandemic that may have some roots in climate change).

The significant increase in climate impacts in 2020 underscores the urgency of adopting changes quickly and at scale, supported by digital technologies such as AI and GIS. It also reminds us that corporate social responsibility efforts to combat climate change and ultimately create a more sustainable planet represent a worthwhile long-term strategy to mitigate the disasters already affecting lives and balance sheets today.

This article was originally published in the global edition of Wherenext

“Embracing business sustainability in this context can be summarised as looking after the three Ps, which are People, Planet, and Profit - meaning a balanced business approach of social wellbeing and equity, environmental stewardship and economic prosperity.” He adds, with a nod to John Elkington’s original thesis on Triple-Bottom Line accounting and the emerging BCorps movement.

"If you continue to only focus on the bottom line you'll eventually lose customers and staff as they seek alternative companies that demonstrate care for all three. You’re also not making any contribution to Sir David’s cause.”

The belief that there's a trade-off – profits versus the environment - is nonsense, he stresses. Societe Generale, the investment bank, for example, will only invest in sustainable businesses, as these deliver higher absolute returns. Larry Fink, CEO of Blackrock, put sustainability at the heart of Blackrock’s investment approach – with the conviction that sustainability and climate-integrated portfolios will provide better risk-adjusted returns to investors. Going green really will keep you in the black.

Start with a map

So how can GIS deliver results?

It starts with visualisation. “Most businesses run on people, places, and interconnected networks. It follows that most businesses can be described as being ‘geographic’ in one way or another, but many leaders don’t think that way,” says Chris. “You can start by plotting your operations on a map in 2D, 3D or 4D. I've had clients in the past who, when we showed them a map of their sites, suppliers and competition, said it's the first time they've ever seen it.”

This is at the heart of the opportunity. Say the word Geographic to most people and they immediately think back to school of wet school trips and igneous rocks. “We’re trying to adapt that muscle memory and raise awareness of this amazing technology,” says Chris. “It has lots of different names – location intelligence, geospatial analysis – but it’s actually really simple. Just take a step back and look at your business in a local, regional and global context. Everything is connected to everything else. That’s how the world works – and we’re constantly delighted by how powerful this business approach is proving for our customers.”.

Jack Dangermond, Esri Founder and CEO, puts it this way “Understanding where things are, and why, is essential for rational decision-making.”

For Example, mapping out your operations can help reduce your carbon footprint. Routes can be better calculated. Logistics improved. “Spatial analytics can really help,” says Chris. “If you’re only interested in profit, you might think it’s OK to send goods from the Port of London up to the Midlands, where storage is cheaper, and then back down to the South East to be distributed to retail outlets. But what of People and Planet? Finding a location that is closer would definitely reduce carbon emissions and road congestion, as well as potentially reduce stress on drivers. The reduced travel costs, faster service, and potentially increased productivity could thereby lead to more contracts and trigger faster business growth – all of which arguably could outweigh the previous cheaper storage cost. I would much rather invest in a company taking that kind of holistic approach than just looking after the bottom line. Many consumers are voting with their feet for similar reasons.”

Add layers. Then more layers

The beauty of GIS is the way models can be enhanced with more layers. Just add data and keep adding to your model. The results can be stunning.

For example, where should a new store be located? Esri offers the opportunity to weave dozens of variables into a single integrated model.

Chris says: “Imagine you are a retailer opening a new outlet. You need to choose where to put it. Available land, competition, customer profiles, spending habits, transport access, footfall data – the possibilities are limited only by the imagination of the retailer. You can add transport routes for workers based on bus routes, train stations, roads, cycle paths, even distances to employees' homes. The data is rich, for example taking into account average travel speeds and road closures. Then you could filter sites by factoring in the carbon footprint of workers. It's straightforward work for an analyst trained in GIS. So you end up with a location that's easy for staff and customers to access. You'll retain staff and customers over the long term as you've considered their journey. In this way GIS can optimise your environmental impact and contribute to health and wellbeing, as well as improve financial performance.”

This modelling can also be expanded to the entire supply chain.

Chris continues, “Esri offers insights on a global level. You can hold suppliers to account and check they are living up to their commitments.”

Ikea, for example, checks to see if suppliers are harvesting wood from sustainable forests. Any supplier infringing on a protected site is quickly exposed.

Advances in satellite data capture now mean the information available via Esri is near real-time.

“There are thousands of satellites every day capturing images,” says Chris. “Our customers are able to map wildfires, floods, the recovery after floods and the damage caused.”

Maps can be augmented with sensor data to enhance the picture. For example, the GSMA, a world body for mobile networks, is mapping air quality with sensors. It's perfect data for incorporating into a rich map for real time air quality tracking. A company might, for example, want to guarantee workers are not exposed to excessive PM2.5 and PM10 particulates. Sound can also be measured.  Even decibels from a facility can be monitored to ensure local wildlife is not disturbed.

Maps can be enriched by a wide variety of additional data. For example, soil composition and geological information improves the risk model for insurers. It's even better in 3D.

Chris says, “Network Rail, for example, has detailed 3D models of the UK rail network, which helps to identify locations at risk of subsidence and flooding. When you make the move to 3D it's just an incredible eye opener. In fact, pretty soon we’ll wonder why we ever did this sort of modelling in 2D. We’re well on our way to delivering the digital twin of planet earth.”

Build operational strength

Modelling the Planet in this way is beginning to improve the way companies treat the other two Ps: People and Profit.

People can be served better when GIS is part of the strategy.  For example, the proposed Access to Cash legislation announced in the 2020 Budget calls for equal and fair access to cash machines. This is an inherently geographic, and sensitive issue. “Our library offers a wealth of demographic data,” says Chris. “A bank can factor in age, spending habits and mobility of different neighbourhoods to reveal where ATMs and branches are best located. This could avoid zones of unacceptably low service.”

Profit can be improved too. New products and policies can be built on the back of GIS. For example, insurers increasingly harness GIS to create bespoke offers for households and businesses. Chris explains, “Not that long ago, insurers quoted premiums based purely on postcodes. But postcodes in rural areas can cover many square miles. It’s possible that two houses with the same postcode - one at the top of a hill and one at the bottom in a flood plain would attract the same premium. Likewise with claims fraud – rapid geographic insight means potentially lower pay outs. Satellite imagery is now routinely used to assess storm damage to rooftops. Using accurate location data means fairer premiums, fairer pay outs, a more customer-focussed service, higher customer satisfaction and ultimately higher profitability.”

“In this way, the 3Ps, People, Profit, and Planet are deeply interconnected,” says Chris. “And if you embed them all into your strategy, the long-term sustainability of the entire business can be improved. For example, when companies literally map out their supply routes, they can identify potential issues. If you ship goods through the Gulf of Aden there are multiple risks. Piracy. Political issues. Weather events. Spatial analysis allows you to systematically analyse threats to the supply chain and build contingency scenarios. Maybe plot a secondary route to avoid flashpoints. It's an illustration of how understanding your business geographically can improve long-term performance.”

Reimagine your business and make Sir David proud

Sir David's plea is for all of us to change our thinking. He put it thus: “People are always asking what they can do to turn this situation around. The truth is there isn't one single answer, though we can make a big difference by putting nature at the heart of our decisions.”

GIS is the best way to do that. When companies think of their operations as part of the natural world everything changes.

It's a mission that should unite us all.

“If we don't get this right there won't be a world fit for us to live in,” says Chris. “The stakes are that high.”

Chris Jackson - Esri UK

Chris is a geographer who is passionate about the environment and creating sustainable businesses & communities. Chris has spent over 25 years in high-tech software industry working with mapping and geospatial technology for government and private sector organisations as a technician, consultant and manager. He joined Esri UK in 2001 and holds a Senior General Management position covering a diverse group of industries, delivering solutions to enable Digital Transformation & Sustainability.

The number of companies publicly committing to net-zero carbon emissions has become a meaningful barometer for corporate seriousness about the climate change threat. In October alone, the world’s largest steel company, ArcelorMittal, and Europe’s largest bank, HSBC, added their names to a rapidly expanding group with net zero ambitions, including Google, BP, Walmart, Microsoft, PepsiCo, Apple, Ford Motor Company, Amazon, Verizon, and many others. Most plan to be carbon-neutral in 10–30 years.

With wildfires consuming California, floods blanketing the Midwest, and superstorms striking the Eastern seaboard, the disruptive effects of climate change on everyday life and business continuity are impossible to ignore. Business leaders are rewriting strategies around sustainability and environmental impact, and employing advanced technology like a geographic information system (GIS) to analyse data on how their operations contribute to greenhouse gas production and associated carbon emissions.

A major driver of greenhouse gases is energy use. A recent EPA estimate blamed electricity production for nearly a third of all US greenhouse gas emissions in 2018, second only to the transportation sector. Another study calculated that electricity generation creates 40 percent of global carbon emissions. For business leaders working to become carbon-neutral, getting a handle on power consumption across facilities is likely a top priority.

Putting Power in Motion

In order to track, forecast, and visualise factors like energy consumption and its link to carbon emissions, innovative companies are relying on location intelligence—generated by the analytical and predictive capabilities of GIS technology. Executives can use a GIS-powered dashboard or smart map to reveal climate-related data across the geography of their networks, creating a visual picture to clarify decisions about where to makes changes to reach net-zero goals.

The video below demonstrates the simplicity a smart map can bring to complex tasks like tracking and predicting emissions. Based on a model used by an Australian utility, this map shows four quadrants of Melbourne, forecasting how electricity use is projected to evolve over the course of a decade, from 2016 to 2026. The buildings mapped represent a mix of residential and commercial use; the colour-coded diamond legend designates residential areas in sepia tones and commercial in blue, with hues darkening as power consumption increases.

Technology deployed quickly to manage a crisis often becomes integral for the long term—that may be the case with location technology when historians examine the business risks posed by COVID-19 and climate change.

The COVID-19 pandemic has proved that businesses can react effectively to even massive disruption when they harness location data. At Bass Pro Shops, a real-time dashboard delivers visibility into wide-ranging conditions across the country. That data delivers clarity on business risk and drives better, rapid decisions in a time of uncertainty.

The pandemic has heightened the need to plan for and reduce business risks, and experts now rank climate change among the most significant threats companies face. That realization has spurred what analyst firm Forrester calls a climate risk analytics market. Some corporate leaders now recognize that the location intelligence guiding them through the pandemic will also address risks tied to climate change.

Companies Adapt to Business Risk by Examining Location

The implications of rising temperatures are being felt now in more frequent and less predictable storms, sea-level rise, and other risks. Executives who focus on long-range planning can prepare for further disruption even as they take action to reduce the pace of warming.

Around the world, coastal communities—their businesses and residents—have been forced to confront rising ocean waters due to climate change. Intense weather events in those locations and further inland have destroyed homes, businesses, roads, and bridges. In some low-lying areas, whole communities have been permanently displaced. Companies operating in those locations have faced disruptions and, alongside municipalities, are actively pursuing resilience strategies, applying location intelligence to gauge business risk and prioritize actions.

AT&T collaborated with Argonne National Laboratory to evaluate and predict the disruptions it will face for the next 30 years in the Southeastern US. This pioneering work used big data analysis and location technology to map where risks will be greatest, and the data is now available to help other companies determine their own vulnerabilities

During the COVID-19 pandemic, businesses adopted location-centric techniques to assess short-term risk. Now, executives are using the same techniques to measure and mitigate the major long-term risk of climate change.

Changing, and Keeping an Eye on Change

During the COVID-19 pandemic, executives have used map-based dashboards to track key indicators of business and community health. This pattern of monitoring real-time and near real-time data has now been applied to create rolling indicators about the health of the planet, providing greater awareness of collective risk.

As noted by world-renowned economist Jeffrey Sachs, shared goals and collaboration are the only way to make progress on the planet’s most pressing risks.

“We are so profoundly connected that we need the global scale, the super-regional scale, the national scale, and the local scale,” Sachs said at a recent conference, noting the location technology supporting this effort. “That is what GIS enables us to do. It is the multiscale understanding, and the ability to work across scales, that is at the core of achieving a sustainable and fair planet.”

This article was originally published in the global edition of WhereNext

In July, Apple announced its plan to be a net zero carbon emitter by 2030, one of the most aggressive climate pledges by a big-name brand in a year packed with similar announcements.

For energy companies such as bp; transportation providers like JetBlue; and tech darlings such as Apple, Microsoft, and Amazon, the race is on to repair climate damage before repercussions reach unsustainable levels for business and society.

The growing portfolio of net zero commitments heartens many, but some see a need for closer inspection. For one, timing matters—some companies have pledged to reach their carbon goals by 2050 (the deadline for useful action, according to a UN scientific panel). Others, including Apple, Microsoft, and Unilever, say they’ll clean up a decade or more before that date.

Another important detail in the net zero movement is exactly how companies will achieve the goal, as well as what role carbon offsets will play. Some plans lean heavily on carbon offsets, which have drawn criticism for ineffectiveness.

As a push for transparency around carbon offsets grows among investors, consumers, and regulators, companies that employ them to reach net zero emissions will find an ally in smart mapping technology.

Climate Trade-Offs Raise Questions

A carbon offset is essentially a way to balance the environmental ledger. If a company’s industrial operations emit X amount of carbon into the atmosphere, it can invest in projects that will remove an equivalent amount of carbon from the air. Projects might include green power initiatives; cleaner-burning cook stoves for the developing world; or efforts to plant trees, which soak up carbon dioxide.

Apple’s plan is light on carbon offsets. The company says its operations, including data centers and corporate campuses, are already net zero emitters, drawing power from renewable sources. Additionally, Apple will use its influence to encourage supply chain partners, including those who manufacture its products, to follow suit. Whatever carbon emissions cannot be avoided will be offset by renewable energy projects that Apple develops and manages.

Such limited reliance on offsets is fairly rare in the push toward a healthier climate. And perhaps because companies have created a bustling market for offsets, offset programs have a checkered past. Some have been outright scams, while others promised, for instance, a new wind farm, but cleared acres of trees to make way for it, negating the benefits.

Because of this spotty track record, today’s investors, consumers, and activists expect transparency on offsets, and smart maps often answer that call.

Keeping Carbon Offsets Honest

Whether carbon offsets are under a company’s control, as in Apple’s case, or purchased through third parties, it will be critical to monitor and communicate progress. These projects take place around the world, often in remote locations, and keeping track of them demands diligence and scalable technology.

Felix Finkbeiner understands the importance of monitoring offset work; he leads a global force of nearly 90,000 people who deliver such projects in more than 70 countries. As founder of Plant for the Planet, a nonprofit dedicated to planting one trillion trees, Finkbeiner and team help companies achieve net zero goals.

Plant for the Planet uses smart maps to identify companies that invest in its work. Using an app built on a geographic information system (GIS), the team also provides key details. “For each project,” Finkbeiner told an audience in 2018, “you can see where they plant, you can see pictures and videos of the project and also the survival rate of the trees planted and the cost per tree.

On the other side of the exchange, companies that fund offsetting work can include smart maps on sustainability websites or in CSR reports, providing transparency into the projects they subsidise and the impacts they achieve.

That kind of monitoring and communication has roots in the sustainable sourcing movement—a practice of increasing importance to consumer goods companies. Nespresso, for instance, uses smart maps to provide consumers a view into where and how coffee crops are grown. Using GIS technology to blend maps and storytelling, the company incorporates data and human interest into its presentations, much as another organisation might tell the story of carbon offset projects around the world.

As corporate executives formalize plans to join Apple and other industry leaders in the quest for net zero status, they’ll find that reliable monitoring, strong partnerships, and smart maps go a long way toward communicating the results customers and investors demand.

This article was originally published in the global edition of WhereNext