Speaker 1: 0:04

Welcome to the Energetics Exchange podcast, conversations with Energy and Climate Experts. Please note that the information and commentary in this podcast is of a general nature only and does not take into account the objectives, financial situation, or needs of any particular individual or business. Listeners should not rely upon the content in this podcast without first seeking advice from a professional.

Speaker 2: 0:29

Welcome to another episode of the Energetics Exchange podcast series. I'm Dr . Nick Wood, climate risk expert energetics, and today I'm joined by Energetics Physical Risk and Resilience lead Dr. Ghislaine Patel . Together we are going to discuss the growing threat of extreme heat in our cities and our oceans, focusing on the implications for Australian businesses. Before we start today's podcast, I'd like to acknowledge the traditional owners of country throughout Australia and recognize that continuing connection to lands, waters, and communities, we pay our respects to Aboriginal and Torres Strait Islander cultures and to elders past and present. And I'd particularly like to acknowledge that one of old people of the Inno nation as the country from where I'm broadcasting today. So to set the scene, the world is set to record its hottest year ever, both on land and in ocean. And not by a small amount, but by an astronomical amount. To quote the climate scientists who recently ran outta words, it's gobsmacking their bananas. NASA scientists have documented that this year's month of June, July and August combined were nearly a quarter of degree warmer than any other northern hemisphere summer in recorded history. This new record comes as exceptional heat swept across much of the world, contributing to deadly wildfires in Canada and Hawaii searing heat waves that struck Europe, south America, Japan, middle East , and the us . This extreme rise on land is independent and is mirrored in our oceans. Noah , the US National Oceanic and Atmospheric Administration has just recorded the fifth consecutive month for global sea surface temperatures have hit a record high with August, setting a new record for the highest global ocean temperature. Since records began, again, these record breaking ocean temperatures side with numerous marine heat waves been documented simultaneously around the globe. So when we talk about extreme heat , what are we talking about and why does it matter? Welcome. As energetics lead in the physical risk area, I'd love to hear your opinion on this.

Speaker 3: 2:20

Hi Nick . Before I begin, I would also like to acknowledge the traditional owners of country throughout Australia and especially the wa ju peoples of the non garden nation. From where I'm broadcasting today, I agree it's, it's really terrifying to see the extreme temperatures that are being recorded at the moment. And I hate to use the word unprecedented, which has been a bit of a buzzword recently, but we haven't really seen this sort of temperature change on a global scale. Another example for me is the sea ice extent in Antarctica, which is the area of ice that covers the southern ocean at any given time. So that's driven by extreme ocean heat that we've been seeing recently. And this year's maximum was over 1 million square kilometers below the previous record set in 1986. So we've got 45 years of records for cis stent . And you know, this year's like nothing we've seen before. So again, unprecedented. So today we're focusing on extremes. I think of it as the, the scary stuff because we often talk about average increases in temperature. So you know, what is a 1.5 degree world or a two or a four degree world going to look like? And it's quite hard to imagine. It doesn't really mean a lot, I think to the day-to-day person, but if we're talking about real tangible examples of extreme heat like we're in the midst of at the moment, then it's feels a lot more real and it's quite alarming. And so to answer your question, extreme heat can mean different things in different contexts. So as a broad definition, it's a temperature that is much hotter than the average in a specific location. And because of that location specific definition, if you have a heat wave , which is multiple days of extreme heat, the threshold that counts as a heat wave is going to be different. It's specific to the records, the long-term records in that location. So if I was to experience extreme heat, I might sweat, I might drink more water, I might end up with a headache, and often I might make the decision to head indoors in the air conditioning to sort of illustrate what we're talking about. But if it was also a human day, then even though I might sweat, it wouldn't really be able to evaporate into the air around me because it's already full of moisture. And so I would be , uh, very hot and bothered. So that's the type of risk that we are talking about. I know later on you wanna chat about what that means for businesses, but I just wanted to point out as well that just by mentioning that I can head indoors and in the air conditioning, I'm showing my privilege and that in some cases, so that could be that you're working in an outdoor area at a mine site or on a farm, or you might not even be lucky enough to have a roof over your head. And so at that point we are talking about increased chances of being exposed to heat related illness and extreme cases , uh, death as well. So as the temperature and the climate changes over time, you can see all of those risks increasing as well.

Speaker 2: 5:14

Yeah, I agree Lan . Um , the other thing that's like sort of keeps us awake at night is not just the change in the nature of the hazard, but also the change in the, in the nature of the vulnerability. We discussed the way the hazard changes , but it's also the way in which the vulnerability is changing essentially as a society are going the wrong way. We are designing our cities and building our cities and our communities, which, you know, cannot manage urban heat. The urban heat island , for example, you know , we're increasingly dependent on the power grid, which has resilience issues in extreme heat. We put our hospitals in the wrong place, we put our airports in the wrong place. You know, there's, there's more to this than just the hazard. There's also that interconnectivity of the , of the vulnerability. Vulnerability is increasing at the same time as the hazard is increasing . So now we've established an understanding of what extremely is where we wanna delve into the implications , uh, and impacts for Australian businesses. I think starting this conversation, it's really around one of how prepared our businesses today and our conclusion would be not to very , it really comes down to the fact that, you know, the future is the future is not like the past. And many businesses don't have the systems in place. They don't have the, the , the governance, the risk management, the structures in place to deal with this. Would you agree, Glen ?

Speaker 3: 6:23

Definitely we've seen a whole range of different businesses and they all have to tackle it differently. And I think that's what makes it really difficult. We're talking about one hazard, but in practice it means a lot of different things. So if I give a few examples, it could be impacts to the business' staff. So going to my point earlier, if they're working outdoors, they're exposed to heat related illness or if you are looking to avoid that risk, you might instill more breaks or avoid working when people might be exposed to those uh , really hot hours of the day. But then you are facing loss in productivity instead, unless you could work during the night. Then you are talking about even if staff are working indoors, can your air conditioning units, you know, are they designed to support or withstand projected temperatures and you might be paying more to maintain all that equipment. Then we're talking impacts to buildings, roads, infrastructure, supply chains, et cetera . So again, design standards for all of those. Talking about supply chain as an example, if you are a retail store or how many days of stock do you have on hand so that if something happens to the roads or the rail, et cetera from your supply chain, that you can still keep doing business , um, in those conditions. And I talked about heat stress impacts to myself. So I'm a human. Other mammals will be exposed to similar kinds of conditions. So that has quite wide ranging implications also for animals in agriculture. So it could mean death in extreme cases can also mean reduce yield or reduce growth if they are focusing on staying cool. And for crops as well. If you have an extreme heat day or multiple at just a really awkward time in the growth cycle, you might lose a whole bunch of your crop in those conditions. So we're talking a really systemic risk here.

Speaker 2: 8:10

Uh , with all that being said, it's pretty clear why this should been increasing priority for Australian businesses. It's dangerous and it's almost impossible to stop impacts everything. And essentially what can they do? We are at the point in time where there's been a big development in the sort of need for , uh, businesses to step up their governance, their strategy, their risk management and their reporting of these types of , um, these types of situations, particularly around the TCFD , uh, task force and client financial disclosures elements. How would we advise our businesses going?

Speaker 3: 8:38

I suppose here we're talking about how is the business going to adapt , uh, all the way from governance systems , uh, how do they actually even approach it? Uh , and then down to risk management, what controls are you putting into place? And then again, metrics and targets. How do you track that over time? How are you performing? Is it working? And I think when we spoke beforehand, you gave an example that if someone was to faint, is that heat related ? Are you tracking that in your system so that you can keep an eye on how this hazard is impacting your business already? I also wanted to add that how a business adapts is quite specific to the, you know, the sector that they work in and the types of operations and their location as well. A tool that businesses can use is scenario analysis to play out what the future might look like for them and which decisions might be , uh, beneficial under ideally multiple scenarios as well. But also how far do you want to adapt? Do you adapt to the worst possible risk and potentially over adapt or do you do less but potentially be unprepared? So finding that middle ground is really important. We don't have time to talk about that in much detail, but I thought I might give , uh, a couple of examples as to what that might look like. So if I had a , a farming business for example, do I make small tweaks over time to make my current processes work better for me? So do I find more resilient crops? Do I put in a smart ag technology to help incrementally improve things Or do I decide actually this area might become unviable? Do I completely review and redesign the way that I approach farming? Do I consider having an indoor facility for hydroponics, for example? Or do I at least diversify my produce to try and cover bases, you know, in difficult years or at worst do I even try and sell and relocate? So there's a few things that can be done. Yeah,

Speaker 2: 10:35

Thank you very much. One last comment is really about why we chose the title for this piece. The words liberal te to to make X in furnace appear in the scifi horror film event horizon. What they mean is save Yourself from Hell. That may sound a rather provocative title, but when you look at the level of extreme heat and understand what that means in a statistical sense, this is a very bad place for us to go to. And this there's not underplay just how serious this is .

Speaker 3: 11:02

And I guess the last thing I wanted to say beforehand back to you is that it can be really confronting to see really scary projections, I guess, for the future. And I think it's important to be aware of that and to address that, but it can also be quite paralyzing to be faced with an issue that seems so large and so hard to resolve. So just remembering that taking action in the end is what's most important and there are actions that can be taken to mitigate the impact to businesses going forwards.

Speaker 2: 11:29

Well , thanks Gla and thank you to all listeners. We hope we've left you knowing a lot more about the implications of extreme heat, especially to Australian businesses and the urgency with which you need to address this. If you'd like a briefing or of any questions on the topic, please contact us via our website, Dr . G ,

Speaker 3: 11:44

Dr . Nick .