Climate Resilience Maturity Model
EDF is providing energy regulators with a new tool, the Climate Resilience Maturity Model, to hold utilities and companies accountable for meeting their obligation to provide safe, reliable, and affordable service, by managing risks associated with climate change — more frequent and severe fires, floods, freezes, droughts and storms — by designing and building systems that are resilient in the face of these increasing risks.
For utilities, regulators, investors and other stakeholders, assessing a company’s ability to meet climate challenges can be difficult. The Climate Resilience Maturity Model standardizes the process. Maturity models are useful and familiar tools that companies use to evaluate how well they are progressing toward a goal or process — and revealing what needs to change. Maturity models help organizations measure their own progress, and can also help third parties, such as utility regulators, make an evaluation.
EDF is using the Climate Resilience Maturity Model to explain to utility regulators how to rank electric utilities and other organizations on a scale from just beginning to high-performing or “mature.” The model evaluates companies on six categories, each rated on a scale of 0-3, where “no discernable process” is a 0 and “efficient” is a 3.
Six categories to measure climate resilience maturity
1. Governance—Executive Level Engagement and Leadership
Organizations can only act effectively on a critical task if they have allocated resources and built structures to guide action. Companies that identify and empower employees, including senior decision makers, to internally advocate for climate resilience policies, plans and actions will be better positioned to meet the challenges of extreme weather and other climate-related risks than those that don’t. Executive level engagement can also send important signals that foster company-wide awareness and progress.
- Example of action reflecting a “2” rating: Company A has a risk committee, and has identified a climate resilience lead who gives recurring status briefings to the committee.
- Example of action reflecting a “3” rating: Company B has climate resilience lead appointed by the corporate risk committee. The lead is charged with several specific duties: tracking physical climate risks; overseeing plans and actions to meet those risks; signing off on integrated resource plans to ensure climate risks are addressed adequately; and briefing the CEO and Board of Directors on a recurring basis.
2. Climate-Aware Planning
Many organizations think of resilience as the response, recovery and rebuilding that happens after a damaging or disruptive event. In fact, a lack of planning and preparation heightens the risk of damage. Companies that plan and prepare for climate risks will be more resilient.
- Example of action reflecting a “1” rating: Company A has undertaken climate modelling projections to inform planning processes, but has not yet completed the planning process, or taken action based on that process.
- Example of action reflecting a “3” rating: Company B, having undertaken modelling and planning related to its own direct climate risk, also analyzed risk to its supply chain and performed analyses of how its risk was interconnected with that of other related companies.
3. Stakeholder and Community Collaboration
Climate resilience measures must be pursued in collaboration with stakeholders in order to be built into organizational culture for durable and long lasting success.
- Example of action reflecting a “1” rating: Company A has undertaken an initial vulnerability assessment on key climate-sensitive assets.
- Example of action reflecting a “3” rating: Company B regularly collaborates on climate resilience needs and actions with local governments, utility commissions, chambers of commerce, trade groups, insurance and credit rating firms.
4. Resilience and Adaptation Actions
Planning the right way is one thing. Acting on those plans with time to spare is quite another. Companies should take action quickly based on insights from climate models, using those insights to conduct cost benefit analysis, and then design, permit, finance and implement projects that harden or relocate infrastructure that support critical functions; work that may take years to complete.
- Example of action reflecting a “1” rating: Company A has undertaken an initial vulnerability assessment on key assets.
- Example of action reflecting a “3” rating: Company B has already implemented initial hardening or adaptation actions to its infrastructure, and has conducted tabletop exercises against projected worst-case climate projections with and without prioritized resilience and adaptation measures in place.
5. Customer Engagement and Coordination
Prioritization based on consequences of inaction invariably produces winners and losers, with some parties benefitting from resilience investments and others suffering from loss of assets which fail cost-benefit analyses but affect local communities and businesses. It is therefore essential that customers and communities have a voice in the decision process, so that climate resilience investment decisions are made with them, not just about them.
- Example of action reflecting a “1” rating: Company A has conducted in person and virtual “town hall” style community conversations to better understand community concerns and priorities.
- Example of action reflecting a “3” rating: Company B has incorporated feedback from “town hall” style community meetings, and regular meetings with commercial and industrial customers, into their planning and prioritization processes.
6. Attention to Equity
Marginalized, economically disadvantaged communities, often comprised of persons of color and recent immigrants, have often been treated as not worthy of the same quality of services that city planners and other decision makers provide to more affluent customers — even though they pay the same price for energy. A Climate Resilience Maturity Model should encourage utilities to give extra weighting to the interests of these communities, to bring them closer to parity.
- Example of action reflecting a “2” rating: Company A prioritizes economically challenged communities in the allocation of resilience measures.
- Example of action reflecting a “3” rating: Company B actively engages with economically challenged communities in the resilience and adaptation planning processes.
- Interactive tool