ConocoPhillips is an independent exploration and production company operating in about 30 countries around the world with physical assets in many of these countries. As such, the company can be exposed to impacts related to a changing physical environment caused by various factors in a number of locations.
A few years ago, ConocoPhillips co-led the development and publication of the World Business Council for Sustainable Development (WBCSD) report Adaptation - An Issue Brief for Business. The report concluded that:
“Changes in the Earth’s climate system could have repercussions on how business operates. The magnitude and frequency of impacts are uncertain, but consequences with negative effects on business could include:
Higher temperatures, which could affect the location, design, efficiency, operation and marketing of business infrastructure, products and services
Water scarcity, which could stymie business operations, particularly those of water-reliant industries
Rising sea levels, which could affect the location of business operations, submerge or complicate access to raw materials or natural and human resources
Increased frequency of extreme weather events, which could damage business infrastructure, disrupt logistics, and affect business continuity and costs
Changes in the distribution of vector-borne disease (e.g., malaria) and greater population migration, with their attendant socioeconomic impacts on workforces and markets.”
ConocoPhillips business operations are designed and operated to accommodate expected climatic conditions. To the extent there are significant changes in the Earth’s climate, such as more severe or frequent weather conditions in the markets we serve or the areas where our assets reside, we could incur increased expenses, our operations could be materially impacted, and demand for our products could fall.
Given the uncertainty regarding future physical impacts associated with changing local, regional or global climate, it is not possible to determine at this time whether future physical impacts of climate change represent significant opportunities for ConocoPhillips.
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Adaptation
Business adaptation planning is a process that helps the company prepare to mitigate potential impacts of a changing climate in a cost-effective manner. The key elements of this process include:
- Identifying the risks and business opportunities associated with the physical impacts of changing climate,
- Identifying physical impacts of greatest concern, and
- Identifying potential technologies and solutions to mitigate risks and take advantage of opportunities.
Adaptation will not reduce the frequency or magnitude of events related to a changing climate but will increase the resiliency of our business to events such as drought, hurricanes and flooding.
ConocoPhillips has conducted pilot workshops with several business units to establish, on an informed basis, future programs and actions based on projected physical changes to the operating environment. The results were discussed within each business to determine the appropriate follow up actions and to integrate those changes into the business unit Climate Change Action Plan. |