3 Big Steps to Reduce Climate Assessment Costs

Mammograms and Climate Risk Assessment

About a month ago, my doctor advised me it was time for my routine mammogram. While I hate being manhandled this way, I took his advice and took the test.  After a very uncomfortable hour, I returned home to muse about my treatment. 

It occurred to me that the doctor can't see what's happening inside me. But, his job is to keep me safe from breast cancer.  So the mammogram is one of the many tests he uses to assess my health. With it he can diagnose early onset of disease.  At the same time it occurred to me that risk assessments I advise for clients, like my doctor’s tests are big steps to reduce the impact of climate change. They give a “picture” of different aspects of the climate health of the organization.

Climate change affects the way we do business, and our organization’s assets and people.  So climate risk assessments are tests to view and project the effects of climate on current assets and our plans for growth.  

Climate Risk Assessments can cost tens of thousands of dollars and hundreds of worker hours.  If we want to meet the assessment goals and maintain reasonable project costs, we must be clear on a few details.

Diagnosing Problems - The First Big Step

Doctors use medical testing to define their patients’ state of health.  So we often find ourselves poked, bled, and X-Rayed.  These first big steps can show signs of early onset of illness.  When this happens, it allows our doctors to prescribe counter measures before the illness becomes serious.

When a doctor prescribes medicine to fight a disease, he tries to ease our symptoms and prevent more serious troubles.  The doctor may check for the prescription’s success with tests to confirm the level of the medication in our blood.  He wants to know that our body isn’t rejecting the drug and verify it’s effect.  He may also check our temperature, blood pressure, and look for abnormal symptoms using standard questionnaires.

Climate Assessments Answer Important Questions - Another Big Step

In many ways, climate risk assessments are like the doctor’s tests and questionnaires. We test to see how climate risks may hurt the organization's assets, people and operations.  Assessments can also check how well risk management techniques work.  They can compare treatment scenarios or the cost that can occur if we do nothing at all.  

Assessments can answer big questions about our path towards resilience. For example, how often will there be heavy rainfall that causes damage to roads, and loss of service?  Assessments can also answer these questions for projects in the planning stage, saving costly errors that lead to poor resilience.  They can show us how much to beef up systems to ensure resilience. 

Climate Assessments Can Cost a Lot

Every assessment needs a team of experts.  These folks include climate scientists, engineers, managers, and staff.  The experts’ fees for the assessment can be high.  Additional costs may include staff time for answering questions and attending meetings and workshops.  In addition, we may need to pay for climate data.  Sometimes costs may include travel, hotels, meeting rooms, or teleconferencing to involve others that cannot be there in person. These costs are minor, but they add up over the project.   

3 Big Steps to Reduce Climate Assessment Costs

Taking Steps to Reduce Climate Assessment Costs

We can take big steps to reduce climate assessment cost by focusing their scope. Like a doctor doing many tests to figure out a difficult medical problem, vague scopes always require more time and resources. This gets expensive.

Vague questions are tough to narrow down, using a lot of the costly consultant time. Lyme disease is an illness with many parallels to vague assessment scopes.  The symptoms are vague and can masquerade as other illnesses. Often, the doctor must do many tests, and often the tests offer conflicting results. The patient can become very ill before the doctor makes a diagnosis. This takes time and is costly.

Climate Assessment Whack-A-Mole

When the scope for the assessment project is vague, the team must try various approaches to identify the actual question.  This always reminds me of the game, “Whack-a-Mole”. The player tries to hit a “mole” that pops up at random from an array of holes, using an oversized mallet. Often, the player whacks at empty holes. The game is entertaining. However, it it can also waste a lot of time and energy. The game is not random. But, the player can spend a lot of cash figuring out the pattern to “win”. 

3 Big Steps to Reduce Climate Assessment Costs

In climate assessment Whack-a-Mole, teams spend a lot of time and money trying to identify the right “moles” to whack. Often, they hit empty holes. The work is not only expensive, but it may not answer the client’s needs, as the scope never defined the questions. 

Lack of clear communication between the different experts can also add to costs.  Bad communication between team members, or between the team and staff can use up a lot of time. Often, team members use different meanings for words and can spend hours in fruitless argument. Once again, this can get expensive. This is a pity, as teams can avoid the extra costs with clear definitions of language and scope. 

I can offer three clear steps to reduce climate risk assessment costs. 

Step 1 - Ask Focussed Questions

A focussed question reduces misunderstandings and takes less time.  So, we shouldn’t ask:

 “How will climate change affect my company and all its departments?”. 

Instead, a better question would be:

“Will my asset flood in the next 5, 20 or 75 years?”

This reduces the work necessary, requires less climate data, and provides a more focussed answer to the climate risk question.

Step 2 - Establish Clear Boundaries

The project boundaries must be clear.  For example, I prefer specific questions like:

“Will the road from Valhalla to Troytown flood in the next 5, 20 or 75 years?”

Or:

“Can hurricanes affect production efficiency over the next 5, 20 and 75 years?”  

Choose a smaller area of study with a specific climate event to target the work.  This will reap rewards. You will get a great study, with relevant recommendations.  Internal experts know the gaps in their systems. They can give great advice about the study scope.

Step 3 - Agree on Definitions

Very early, teams should agree on definitions for terms used for the work. Words can have different meanings for folks.  This is troubling for groups gathered on to a team from different areas of work. Each specialty has its own jargon, clear to insiders but baffling to others. I talk about this in previous posts and in our free Nodelcorp University course.  

One of my favorite examples is the word “conservative”. I have seen this word cause a lot of trouble for teams. It may have opposite meanings for engineers and scientists.  For the engineer, “conservative” refers to adding beef to a design. They use the word to mean “bigger”. Meanwhile, the scientist may use the word to describe a case that ensures that a forecast includes the data he provides. They use the word to mean “smaller”.  I have seen scientists and engineers argue about “conservative” estimates for hours, only to realize that they agreed in the first place. They were using different definitions to frame their discussion.

3 Big Steps to Reduce Climate Assessment Costs

In summary, my 3 big steps to reduce climate risk assessment costs are:

  1. Establish an explicit scope statement;
  2. Define a focussed study area; and
  3. Establish clear definitions for the language used by the project team.

These three simple steps will save you money on your climate risk assessment project.  In this way we avoid diagnostic Whack-a-mole, saving time, money and answering the real questions. 

Over to You

Let’s keep this conversation going! We’d love to hear about your experience with climate risk assessment scoping and costs.

  • Did you  experience scope creep on your project?

  • Did members of the team have difficulty understanding each other?

  • What would you recommend for containing costs on a climate risk assessment?

Share your ideas in the comments box below.

Remember ... 
Climate change is real.
You are an expert.
We, value your opinion.
 

More Posts by Joan

About the Author

3 Big Steps to Reduce Climate Assessment Costs 4

Joan Nodelman

Vice President & CFO

Joan is a specialist in governance, education and risk management with over forty years of professional practice. She is committed to helping clients achieve their organizational objectives and goals through holistic risk management.

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