Climate Change Adaptation of the Agricultural Seed Business Climate Change Adaptation of the Agricultural Seed Business

Sector: A Cross-country Study Sector: A Cross-country Study

Md Khalid Hossain Md Khalid Hossain Sharif As-SaberSharif As-Saber

RMIT University, AustraliaRMIT University, Australia

17 August 2014The World Weather Open Science ConferenceThe World Weather Open Science Conference

Montréal, Canada Montréal, Canada

Overview of the Paper

• Companies face both risks and opportunities due to climate change impacts

• Greater focus on companies’ liability in climate change inside-out effects climate change mitigation strategy

• Why focusing on Climate change adaptation strategy?

• Limited focus on climate change impacts or outside-in effects on companies

• Cross-country studies, especially comparing between developed and developing countries, are even more infrequent

• Based on a qualitative research investigating the climate change adaptation process of companies in the agricultural seed sector across Australia and Bangladesh.

Corporate Environmental Strategy: Climate Change Adaptation

• Concerning ‘outside-in’ effects of climate change on corporations

• Risk aversion: Averting risks due to physical impacts of climate change on infrastructure and supply

chain (including consumers)

• Opportunity exploitation: Exploiting opportunities created due to physical impacts of climate

change which otherwise might not have been created benefiting corporations, stakeholders and

consumers while avoiding maladaptation

• Drivers: experience of disaster/climate change impacts, shareholders, managerial and organisational

values, consumers etc.

• Actions: process and product innovation, changing organisational value and culture, engagement

with different groups etc.

• Designing infrastructure through considering projected impacts of climate change

Initial Conceptual Framework of the Research

• Exploratory research and Qualitative research method

• Case study research design

• Purposive sampling (i.e. relevance/richness of information – Patton 2002) while following a structured-pragmatic-situational (SPS) approach (Pan & Tan 2011) of case study research

• Selection of vulnerable geographical locations: Bangladesh [most vulnerable developing country (Harmeling 2010)], Australia [most vulnerable developed country (CANA 2014)]

• Selection of agricultural seed business sector as a vulnerable business sector since physical impacts of climate change are more relevant for the sector

• Semi-structured interviews & Document analysis

• Thematic analysis deductive and inductive generation of themes and sub-themes

Methodology

• Unit of analysis: Total 12

4 subsidiaries of 2 multinational corporations (MNCs) which have operations in both Australia and Bangladesh

2 subsidiaries of 2 MNCs which have operations either in Australia or in Bangladesh

6 companies operating in Australia and Bangladesh which do not have international presence (3 each)

• 30 semi-structured interviews including 12 from companies and 18 from experts (9 each from Australia and Bangladesh); 15 interviews from each country

Methodology

Findings and Analysis

• In Bangladesh, one MNC and two local companies are implementing planned activities related to climate change adaptation while two other MNCs and one other local company are implementing unplanned activities related to climate change adaptation

• In Australia, all three MNCs and two local companies are implementing planned activities related to climate change adaptation. One of those MNCs and one of those local companies are also implementing unplanned activities related to climate change adaptation.

• One local company in Australia do not endorse the idea of ‘climate change’ and hence has not reported any strategy

Findings and Analysis

• Five Bangladeshi MNCs and four of the Australian companies are undertaking activities without recognising or realising their contributions to climate change adaptation Not consistent with either deliberate or emergent strategy A new category, subliminal strategy, has, therefore, been created to reflect this finding.

• Subliminal strategy

• Certain activities or actions which are not intended to support climate change adaptation, but undertaken and implemented inadvertently

• Companies do not clearly identify or claim those actions as climate change adaptation either due to unawareness or routine nature (e.g. health and safety policy) of those actions

Findings and Analysis

• Opinion of experts: Companies do not have meaningful activities in relation to climate change adaptation and repackaging current activities as climate change adaptation

• Nature of Scepticism : Bangladesh Actual causes of impacts (climate change or infrastructure development) , Australia Human-induced climate change or natural climate variability

• Government role in climate change adaptation in agriculture is a significant factor in Bangladesh in relation to corporate strategy

• Individual corporate objectives have been reported to have significant impact on the activities related to climate change adaptation in Australia

“(Our company) is very innovation focused, technology focused. So our seed sector is always looking at the innovation like improved water use, improved use of nutrients. So when you talk about climate change, we are talking about sustainability and trying to maximise production on as few acres as possible. That

is our company focus and that goes right through to farm to make the absolute use of every unit of fertilizer, every litre of water and every acre of land” (Subliminal strategy - ASC1 representative).

Findings and Analysis

• Cross-country perspective

• With significant government role and consumer concerns, corporate strategies in Bangladesh are dominated by subliminal strategy while some companies simultaneously follow emergent or deliberate strategy

• With comparatively less government role and consumer concern than Bangladesh, corporate strategies are a mix of deliberate and subliminal strategies in Australia

• Strong market presence influences deliberate strategy of MNCs in both countries

Findings and Analysis

• Strategic orientation of companies

Findings and Analysis

• Key aspects of companies’ deliberate climate change adaptation strategy

• Activities:Activities:

• Long term engagement in developing climate-resilient products

• Proactive engagement with research institutions and government

• Investing in research with long-term strategy

• Adopting a global climate change adaptation strategy with significant interest from the headquarter

• Influencing factors:Influencing factors:

• Strong presence and commitment at the subsidiary level

• Consumers’ demand for climate resilient products and services

• Company vision to support consumers in absence of consumer demand

• Company’s focus on research and innovation

Findings and Analysis

• Key aspects of an companies’ emergent climate change adaptation strategy

• Activities:Activities:

• Observing the projected climate change impacts with short-term focus

• Marketing existing product in a climatic condition without going for developing a new product

• Collaboration with the government when prior climate-resilient product and support are available from government

• Influencing factors:Influencing factors:

• Weak presence at the subsidiary level, satisfaction of consumers as well as satisfactory performance with existing products

• Low commercialization of subsidiary market

• Resistance to research and innovation (e.g. biotechnology)

• strong presence of the government and absence of competition regarding climate resilient products

Subliminal Strategy: A New-Found Strategy

• Key aspects of Subliminal Strategy Contributing to Climate Change Adaptation

• Subliminal strategies become deliberate or emergent climate change adaptation strategy if MNCs become aware of these possibilities or require to show off their credentials to address ‘outside-in’ effects

• Activities:Activities:

• R&D for higher production contributing to consumers’ adaptive capacity

• Implementing sustainability strategy

• Regularly addressing climate variability which increases organizational adaptive capacity

• Diversification of product and location

• Influencing factors:Influencing factors:

• Strong focus to support consumers

• Corporate focus on sustainability including social and environmental responsibility

• Focus on research & innovation as well as prioritization of health and safety

• Subsidiary location in a natural disaster prone region

Conclusions

• How do MNCs formulate and employ their strategies in adapting to the impact of climate change?

• No specific pattern of adaptation strategies exists in agricultural seed business sector in relation to climate change adaptation. Companies either follow one of the three strategies or mix any two of the strategies.

“There is going to be much scepticism in any population whether it is farmer or

agribusiness or pharmaceutical or anything else. There are individuals who are sceptical

but there are also individuals like me who say, well, let us remain flexible. Don’t exclude it

(climate change impacts). Things might change. This is going to be hard. Most of the

people would follow the middle path. I think it is just a good principle any way, to be able to

respond, to be ready if something does happen” (ASS1 representative).

THANK YOU