PDF Version: An Emerging Corporate Risk – Climate Impacts to Critical Energy Infrastructure
Research Commented On: “Corporate Risk and Climate Impacts to Critical Energy Infrastructure in Canada” (Dalhousie Law Journal)
Introduction
This post, based on my recent article, examines climate impacts to critical energy infrastructure assets from a corporate risk perspective. It focuses on the importance of undertaking climate adaptation to critical energy infrastructure as a corporate risk-mitigation strategy. Emerging climate risk was most recently identified as one of the top five challenges facing the global economy at the World Economic Forum 2020 in Davos, Switzerland (see World Economic Forum Global Risks Report 2020).
By way of background, Canada’s 2009 National Strategy for Critical Infrastructure considers infrastructure as critical where the asset is essential to the “health, safety, security or economic well-being of Canadians.” Examples in the energy sector include electricity generation and transmission infrastructure, oil and gas industry infrastructure, maritime ports, and rail infrastructure related to energy transportation. All of these classes of assets are vulnerable to the anticipated and unanticipated effects of climate change impacts from extreme weather and climate events, which are predicted to intensify. These impacts may affect both the physical infrastructure of the asset and their operations, as well as the business continuity of the owners and operators of the asset. Within this context, adaptation to the effects of climate change can be considered a process of adjustments in natural and human systems to actual or expected climate impacts and their effects (see, for example, Article 7 of the Paris Agreement, 12 December 2015, FCCC/CP/2015/L.9/Rev.1).