With two floods in two months in the North, a tropical cyclone crossing the coast in the South East, and a record-breaking flood causing multi-generational impacts in the West, climate-related disasters are fast becoming business as usual in Queensland.  

With the flooding receded and the power back on, life has largely gone back to normal, at least in the cities, but for the state’s business community, particularly small and medium enterprises (SMEs), the recovery continues months after. 

For some, there are direct physical impacts – flooded premises, damaged crops, and livestock losses – but for many, it’s the indirect economic impacts that prolong disaster recovery. It’s supply chain disruptions, lost revenue from unplanned closures, workforce unavailability, customer loss, mental health challenges, contaminated topsoil and ongoing booking cancellations.  

In the South East in particular, what Ex-Tropical Cyclone Alfred showed us is that businesses in the region weren’t prepared for a cyclone. Unless they were here 50 years ago, they didn’t know what to expect, and without a full understanding of the risks, they scrambled to prepare and then scrambled to recover. 

Extreme weather events and natural disasters are now a regular part of Queensland business life, and the climate risk positioning of the state’s business community needs to shift from reactive recovery to proactive resilience.  

The business case for climate risk and adaptation 

In the March quarter, Treasurer Jim Chalmers said there would be a $1.2 billion hit to GDP due to the 12 million hours of work lost during Ex-Tropical Cyclone Alfred. Over the next 35 years, Queensland is also expected to incur the largest increase in costs related to natural disasters of any state in Australia, with an increase of more than $466 billion. For the business community, particularly SMEs, this means climate risk and adaptation measures should be considered ‘business-critical’. In fact, data from the United States Federal Emergency Management Agency found 40% of small and medium businesses do not reopen after a disaster, and a further 25% fail within one year. And it’s not only natural disasters that businesses need to prepare for, but all climate-related risks. 

Yes, natural disasters are the headline event, but climate risks stretch far beyond extreme weather events, encompassing risks such as supply chain disruptions due to extended wet or dry seasons, rising insurance costs, reputational and market risks, evolving international foreign relations and state, national and international regulatory changes. Shocks and stresses in each of these areas will continue to arise, likely more frequently than ever, and wherever possible, maintaining continuity through these events will be the difference between prosperity and failure. 

The economic consequences of inaction 

Beyond the individual business cost, climate-related shocks and stresses also have a negative impact on productivity. After all, if our state’s workforce is focused on navigating supply chain breakdowns, addressing ecosystem damage and recovering from natural disasters, then it isn’t spending time on the forward-thinking research and innovation needed for economic growth.  

Climate change also contributes to cascading negative social and health outcomes for communities, including displacement, food insecurity, increased incidence of infectious diseases and mental health challenges, some of which we are currently seeing play out in real-time in Western Queensland. 

There is an economic imperative for both the public and private sectors to invest in addressing climate vulnerabilities today to avoid the escalating and compounding future costs. However, at practically every level, people need to be convinced to make a significant investment in the future when they’re already dealing with day-to-day hurdles in the here and now. 

The challenge lies in communication and capability building 

Unfortunately, much of the conversation around climate risk and adaptation happens at too high a level to deliver practical impacts among SMEs. It’s something I noticed repeatedly at last year’s Commonwealth Heads of Government Meeting (CHOGM) in Samoa – a week of ‘powerful discussion and decisive action’ from world leaders to address global issues, including climate resilience for Small Island Developing States. 

The discussion called for collective action but failed to drill down into exactly what that would look like for your average tourism operator in Apia, or to address the communication breakdown between a world leader’s forum discussion on insurance frameworks and Samoan locals living on island time. 

The same is true for climate resilience in Queensland.  

Businesses need to truly see what’s in it for them and why understanding climate risk and adapting their operations will secure their future growth, not just impact their bottom line in an already challenging operating environment.  

Additionally, the beauty of resilience is that it helps maintain continuity through all types of shocks and stresses – which aren’t always bad for business. We’re now seven years out from the Brisbane 2032 Olympic and Paralympic Games, an event which will change the face of our city and state in the lead-up, during two concentrated weeks of action, and beyond. There will be shocks and stresses for business associated with each stage of this event, including transport and connectivity infrastructure disruptions and a sudden influx of national and international visitors. Effective preparation will be key to ensuring businesses reduce the impact and maximise the benefits of this event. 

The key here is capability building – to help businesses improve their resilience, maintain continuity and establish an ‘always on’ plan for when disruptions occur. We need to put in the time and effort today, during normal operating conditions, to support businesses to respond to the challenges of tomorrow, rather than waiting for disaster to strike.  

Some of this support is already being delivered through the networks of industry bodies and chambers of commerce, but if we want to see Queensland’s SMEs truly prepared for climate-related risks, funding is needed to develop a state-wide business resilience program that caters to their specific requirements and the Queensland operating environment. 

Slated for release this month, ecoBiz’s new climate risk and adaptation module will lay the groundwork for a longer-term resilience program by helping Queensland businesses identify, track and understand climate risks and opportunities based on their region. The module covers both physical risks, arising from hazards as discussed, (extreme weather events and natural disasters), as well as transition risks, which are driven by shifting market demands, regulatory changes, and societal pressure to transition to a low-carbon economy. The module is an essential piece of the broader business resilience framework that will help businesses prepare their own climate risk assessment and create an action plan to support adaptation measures. 

Climate-related risks are part of doing business in Queensland. Creating a business community that understands those risks and invests in adaptation and resilience measures will safeguard both their individual business operations and the state’s broader economic prosperity.