Risky Business: Climate Concerns in Boardrooms, But in Business Magazines?

Major business periodicals  appear to be lagging in terms of coverage of corporate boardrooms’ increasing awareness of risks posed by a changing climate.

As little as ten years ago, few of the world’s largest corporations issued sustainability strategies to shareholders, reported on greenhouse gas emissions, or disclosed climate change risks. Today, more than 80 percent do.

But while catastrophic risk and sustainability concerns associated with climate change now are increasingly reflected on corporate agendas, leading business magazines — no doubt suffering some of the same economic and growth challenges facing mass media overall — show little real appetite for substantive climate-related reporting.

Nevertheless, climate news important to the business sector clearly is happening. For the first time, G20 leaders put disaster risk management on the agenda at their 2012 summit in Mexico. And U.S. corporations have made substantial progress on emission reduction goals, according to a September 2012 report by the Carbon Disclosure Project, a system for companies to measure and disclose environmental information. As emissions reductions and physical risks of climate change — including drought, wildfires, and floods — raise concerns in boardrooms and among finance ministers in the world’s richest countries, business press coverage appears not to be meeting needs, leaving things to specialized high-priced “insider” newsletters to fill the void.

Much has changed in corporate leadership recently that’s worth the attention of the business press, says Howard Kunreuther, a professor of decision science and public policy at the University of Pennsylvania’s Wharton School of Business. Co-director of Wharton’s Risk Management and Decision Processes Center, Kunreuther is a lead author for a chapter on risk and uncertainty in the fifth assessment report of the Intergovernmental Panel on Climate Change, IPCC.

Long-Range Climate Issues … Victim of ‘Myopia’

Howard Kunreuther of Penn’s Wharton School sees catastrophic risks looming.

“It’s a new world we are dealing with now, and catastrophic risks are looming,” says Kunreuther. “Risk management is now on the agenda of the CEO. You even have chief risk officers in companies.”

But climate change and climate-related risks are long-horizon problems that haven’t usually appeared in business plans. “It’s myopia. Business leaders are concerned about the shorter-run things, short-term horizons. It is not that (companies) don’t do the long-range planning, but the specific things they are doing, they won’t be about climate change per se,” said Kunreuther. He says floods, droughts, or supply chain management affected by natural hazards have increasingly come into focus. “We are facing major, major changes with respect to catastrophic risk. The data shows that what we may have thought as a low probability risk is a lot higher.”

Ferreting Out Business-Related Climate News

In At War with the Weather (2009, MIT Press), Kunreuther and co-author Erwann Michel-Kerjan, examine current responses to catastrophes and outline best practices for managing weather risks. With climate change issues so politically volatile in the United States, Michel-Kerjan, managing director of the Risk Management and Decision Processes Center, tends to avoid the term altogether. When there’s a flood risk, he refers to it as a flood risk, even if it is caused by rising sea levels from climate change, says Michel-Kerjan, who also teaches a course called Environmental Sustainability and Value Creation in Wharton’s MBA program.

Concerning climate-related catastrophes, Michel-Kerjan says he thinks the business media need to get specific on the physical risks posed by climate change and forecast for specific regions; for example, wildfires and drought in the West, flooding in the South.

“If a company suffered weather-related losses, find out who is paying for these losses,” he advises. “It’s not necessarily insurance companies. It could be U.S. taxpayers if the federal government decides to give relief.”

Michel-Kerjan says he hopes to see increased media reporting also on the disclosure of corporate risks related to climate-related disasters and on corporate spending on investments to curb the effects of climate change. If a corporation is doing business in the south of U.S., in Florida for instance, media need to be reporting on whether and how they’ve quantified their risks from hurricanes or flooding. Has the company actually quantified and disclosed its potential exposures to shareholders? Ask what is it doing to better manage and reduce those exposures?

Much business coverage around climate change in the most well known business publications involves “green” business practices and sustainability, rather than examining risks or innovations to mitigate risks from climate change. An analysis of four top business periodicals shows little real appetite for in-depth, climate-related reporting. Just one publication, The Economist, consistently reports on climate change, disaster risk, and sustainability.

Covering the convergence of climate change and business — whether innovation, risk, or opportunity — seems to be a matter of resources for publishers. In 2008, for instance, Fortune laid-off its top three reporters who covered the green business, environment, and sustainability beats. Two of the reporters now work as contributors to Fortune on a contract basis, and still write on climate, energy, and sustainability issues. Here’s a breakdown of how four business publications have been covering climate change:


THE ECONOMIST

Little climate-related economic and news developments escapes notice in The Economist. It covers the subject expansively.

A special report in June uncovered risks and benefits of economic opportunities in the Arctic, from weighing profits to examining the costs of climate change and the geopolitics of the region. Other in-depth articles in recent months have included original reporting on: new efforts to go underground with carbon capture and sequestration; an analysis of the year’s heatwaves; how China may be under-reporting emissions figures; the melting of summer ice in the Arctic Ocean; and the energy and environmental platforms of the Democratic and Republican presidential candidates — even as climate change has “slipped off the radar” in U.S. politics.


FORTUNE

In the latest issue of Fortune, a feature article compares Mitt Romney and President Obama on energy and climate issues. In the July 2012 issue, Fortune reported on how “growing population, increasingly scarce resources and climate change” factor in Google’s zero-carbon quest. In November 2011, writer Marc Gunther wrote an expansive article, “The Business of Cooling the Planet,” on the work of climate scientists partnering with geoengineering, businesses, and philanthropists like Bill Gates. It was so popular it led to an e-book, Suck It Up: How capturing carbon from the air can help solve the climate crisis. Most of Fortune‘s climate-related reporting, however, has more to do with energy and sustainability news rather than with business risks associated with climate change. Perhaps one of the best examples of Fortune‘s climate coverage dates all the way back to 2004, when the magazine broke a story on a Pentagon report detailing how national security could be affected by abrupt climate change.


FAST COMPANY

Fast Company frequently runs short climate change news nuggets on its Co.Exist blog, which is devoted to groundbreaking innovations and ideas. Some of the coverage focuses on climate research and responsible business practices to manage and mitigate carbon emissions. One recent article reports on a surprising array of companies’ investments in solutions to counter climate change; another examines how eliminating soot and methane emissions can help slow down climate change. Other reports tend to be more provocative, such as a blog post urging rich countries to buy more coal, a post on how climate change can’t come soon enough, and another post covering research on how to engineer humans to adapt to climate change.


BLOOMBERG BUSINESSWEEK

Much of the climate change news that appears in Bloomberg Businessweek is produced by the Associated Press. However, Bloomberg also has published some notable original content, including this article detailing how the New Orleans power utility Entergy is examining investments that would limit its losses from climate change. Another report in September provides analysis of the Carbon Disclosure Project’s research and what it means for business. And in March the publication included a brief on Al Gore’s assessment of climate change risks. On the international front, the website recently included a video report of how South Africa’s money-making crop, rooibos tea, could be affected by climate change.

Lisa Palmer

Lisa Palmer is a Maryland-based freelance writer and a regular contributor to Yale Climate Connections. (E-mail: lisa@yaleclimateconnections.org, Twitter: @Lisa_Palmer)
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