Improving resilience to weather and climate change for our customers. The importance of adaptation

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1 Improving resilience to weather and climate change for our customers The importance of adaptation

2 2 Introduction from Martin Baggs Chief Executive Officer We provide essential water and sewerage services to our customers and we aim to do it in the most sustainable way. To do this, we rely on goods and services provided by our contractors and suppliers. Our supply chain is almost certain to be affected by current weather events and climate change in the UK and beyond. In order to have confidence that we can deliver the essential service to our customers, we need confidence that all our partners are sufficiently resilient to the current weather and the impacts of climate change. We want to work together with our supply chain to help you: Understand the potential impacts of weather and climate change on your business resilience and put in place plans to respond Understand your carbon footprint and put in place plans to reduce the carbon intensity of the goods and services you provide We have produced this booklet to help explain what the issues are and what they mean to Thames Water. It also explains how you can improve your own resilience and the benefits this would bring to your business. The booklet also poses some questions you may want to consider to assess risks and opportunities. Martin Baggs Chief Executive Officer, Thames Water

3 3 Key contacts Sustainability Dr Keith Colquhoun Climate Change and Sustainability Strategy Manager Procurement Team Gareth Cale Procurement Support Manager Sustainability Team Pavan Badesha Sustainability Awareness Advisor What is climate change? Climate change means long term change in weather conditions. The Earth s climate has changed naturally in the past but most scientists now think that humans are also having an effect. Activities such as burning fossil fuels and deforestation release carbon dioxide (CO 2 ). CO 2 (and some other gases) forms a layer in the atmosphere that traps energy. This causes the Earth to warm up, leading to long term changes in weather conditions.

4 4 Why is Thames Water concerned? We are concerned about the impact of weather and climate change on the essential service we provide. The impacts of climate change may seem a long way off but the impacts of severe weather are being seen on an almost daily basis. For example, over the past few years we have seen extreme weather events including the 2012 drought, extreme cold and snow in 2010/11 and the wettest summer for 100 years in Further afield we have seen extreme weather events such as Hurricane Irene 2011 and floods in Thailand All of these events either impacted or had the potential to impact on companies and supply chains. We rely on goods and services provided by our suppliers. Our supply chain will be affected by weather events and climate change in the UK and beyond. In order to have confidence that we can deliver to our customers, we need confidence that our suppliers are resilient to weather today and climate change in the longer-term. What do we mean by resilience and adaptation? We believe that a twin track approach of managing the unavoidable impacts of climate change on our business ( adaptation ), combined with reducing our greenhouse gas emissions ( mitigation ), is essential if we are to overcome the challenges climate change represents. Adaptation means taking action to manage weather and climate change risks and make the most of the opportunities. Adaptation is linked to resilience. Resilience is about managing risks and being able to withstand or recover from shocks. Business resilience is about being able to respond or recover while continuing to operate with limited impact on the business. Current weather and climate change are pressures businesses increasingly need to be resilient to. Adaptation to weather and climate change risks are likely to increase business resilience. The essential service we provide is sensitive to weather and climate change therefore we need to find ways to improve resilience. The latest projections of how the UK climate might change over the next century are called United Kingdom Climate Projections 2009 (UKCP09). UKCP09 contains projections of average temperature and rainfall (annual and seasonal) as well as extremes and changes in sea level.

5 5 What is Thames Water doing to improve resilience to weather and climate change? We have assessed the level of risk we face from weather and climate change. We are exposed to: 1. Increasing pressure on water resources (not just because of climate change but climate change will make it worse) 2. Increasing pressure on the sewerage network from increases in rainfall at certain times of the year and more intense rain storms 3. Flooding of water and wastewater treatment sites We have already taken action to improve resilience to these risks. We use climate projections to develop our Water Resource Management Plan which explains how we will make sure there is enough water for our customers over the next 25 years. We have improved the design standard for sewers and are developing new ways to increase their capacity to cope with heavier storms. We have assessed the risk of flooding for nearly 7,000 assets and have or are planning to take actions to improve flood resilience at our most vulnerable sites. Our adaptation efforts have focused on managing direct risks to our operations and we will continue to regularly reassess these risks. However, we are exposed to indirect risks through our supply chains and we want to manage these risks as well.

6 6 Why do we want you to consider resilience and adaptation? In order to have confidence that we can deliver to our customers, we need confidence that our suppliers are resilient to weather and climate change risks. Our UK based suppliers will almost certainly be affected by weather and climate change. However, our suppliers are dependent on suppliers in other countries where the timing and severity of weather events and climate change may be different. There is potential for weather events and climate change to disrupt the ability of our suppliers to deliver contracted goods and services. As well as managing risks, we want to become water sector leaders on sustainability. Increasing resilience to weather and climate change is an essential part of this. We want to work with you to understand the weather and climate risks we (and you) are exposed to and take action to reduce them. What are the benefits of considering resilience and adaptation? We believe that improved resilience will benefit not only us but all of our suppliers. Risk management Probably the greatest benefit of considering adaptation is a better understanding of your potential business risks. By thinking about exposure to risk and adaptation in your own supply chains, you will gain a greater confidence in your suppliers ability to fulfil their obligations to you. In turn, you will have greater confidence in your ability to deliver goods and services to us. By providing this confidence you are likely to benefit from a competitive advantage. Cost saving Adaptation can result in cost savings in the short and long term, like lower insurance costs and avoiding damage in future which may also lead to loss of business. Taking action now to reduce climate change risks will improve your resilience to current weather events. Sustainability Improving your resilience to weather and climate change could also help you become more sustainable, improve your customer reputation and confidence. The global automotive industry was affected by flooding in Thailand in Thai factories supply factories around the world with components. Disruption to the supply chain led to a reduction in output around the globe. In North America, Toyota cut output because they ran out of key Thai-made components.

7 7 Key questions for our suppliers to consider 1. How are the various aspects of your business (property, equipment, processes, materials, markets, suppliers) affected by current weather events? 2. How might the risks to your business change as a result of climate change? 3. How might your suppliers be affected by the impacts of climate change? What impact could this have on your business? 4. How could climate change impact your ability to deliver goods and services and meet contractual obligations? 5. What action do you need to take to reduce weather and climate change risks and improve the resilience of your business? 6. How are you planning to implement and measure the outcome of these actions? What can you do to consider adaptation and improve resilience? A basic approach for understanding and responding to weather and climate change risks is as follows: 1. Identify how your business is currently affected by weather. Think about how this affects your processes, property, equipment, materials, suppliers and reputation. 2. Identify how your business might be affected by climate change. You can use headline messages from UKCP09 (climate change predictions) to understand how the UK climate might change. 3. Assess the scale of the risks and opportunities and prioritise where you need to take action. 4. Identify adaptation actions. Start with current processes: are you already doing things which will have resilience benefits? Can you do things differently? 5. Set out what you plan to do in an adaptation plan. 6. Monitor and review your adaptation actions and report progress. 7. Assess the scale of weather and climate change risks

8 8 Where can you get further information and help? A lot of basic information, advice and case studies are available for free online. Organisations wishing to undertake a detailed assessment of their climate risks, including modelling and costing impacts and adaptation responses, may want to pay for more technical analyses and advice. Some links are provided below but for more sources of information see the full document which accompanies this leaflet. Climate Ready from the Environment Agency Climate UK London Climate Change Partnership South East Climate Change Partnership UKCIP UKCP09 ukclimateprojections.defra.gov.uk/ Mayday Network

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