Collective Impact Case Study

Climate impacts on key infrastructure - exposing the interdependencies  

The interdependencies of key infrastructure sectors - energy systems, finance, commercial properties, transport, etc - was a known concern among climate practitioners, yet it was largely ignored by governments, response agencies and business. The Climate Institute and various corporate and academic partners worked together to change this. 

“The biggest impact of the project was that we were able to take the results to the energy networks association in Australia, and it gave them further justification for further work on an industry climate risk manual. They saw the results, they saw their members were less well prepared than other sectors.” 

Stella Whittaker, Former  Senior Executive at Manidis Roberts

In October 2012, The Climate Institute, Mirvac, Westpac, Manidis Roberts and Bond University delivered Coming Ready or Not, a report examining the physical impacts and flow on consequences of climate change on major infrastructure and assets, such as electricity networks, rail and road, property and water supply.

The work was a landmark – a break-through stock take analysis that made specific recommendations for business and policy decision makers.

It became major news – media attention to the report was significant, as was the response from industry and local governments. Hurricane Sandy devastated the New York area just days after the report was launched, refocusing the attention of media and first responders on the issue of climate preparedness. 

Continued conversations and interest led the project partners to take the work a step further, analysing the climate-related risks associated with interdependent infrastructure systems of a major city.

This was launched in August 2013 and gained significant traction among businesses. The economic modelling by KPMG, a Climate Partner of the Institute and lead on this second part of the project, found that the impact of a projected heat event on a hypothetical large manufacturing and distribution business in Melbourne resulted in disruption and reduced performance of key assets and services. The costs for the business from disruption to labour supply alone ranged from $1 to 5 million, or 0.2-1.1 per cent of revenue.

“This is a considerable hit for a business to take from an event which could become a regular feature of summer within decades,” said Chi Mun Woo, KPMG Climate and Sustainability partner. “And this doesn’t include the costs of supply chain disruption, which would be likely to occur simultaneously. Nor does it include likely longer term price increases in inputs and insurance premiums.”

The Municipal Association of Victoria along with the Australian Federal Government and councils in the Port Phillip bay took notice and conducted a similar exercise.

Stella Whittaker, who was Senior Executive – Sustainability and Climate Change at Manidis Roberts when the project was conducted, said:

“The biggest impact of the project was that we were able to take the results to the energy networks association in Australia, and it gave them further justification for further work on an industry climate risk manual. They saw the results, they saw their members were less well prepared than other sectors.”

“It’s an important first step because this is a long trail – it takes years to be fully prepared, from having the information, commissioning modelling, adapting the findings to the business, and having the findings being applied. But companies who do this are reducing their costs overall, they are making sure they are more resilient for future climate events, they are protecting shareholder value and reducing unplanned costs.”

Can Australia's infrastructure handle climate change? This report looks at climate risk to major infrastructure assets.
Resilience Cover
Examining the physical impacts and cascading consequences of climate change on the infrastructure sector.
Creative Fellow Michael Hall gives us the story behind the imagery in the report Coming Ready or Not

Coming Ready or Not

Interdependencies Economic Modelling 

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