FNA used case studies and scientific articles to assess the variations in sea ice in their area of interest. As polar bears rely on this ice to hunt, eat and mate, their population in FNA’s area of interest has the potential to deteriorate. Since FNA’s flagship product is an adventure trip in this polar bear-populated area, the changing in sea-ice formations pose a critical business risk. Careful supply chain planning was vital to FNA because they operated a base in Churchill, Manitoba, to which they needed to bring in materials. They had three options for transporting materials: fight, rail or barge. Barge and airfreight are expensive, so FNA relied predominately on rail. That approach ran into problems due to a changing climate. In 2015, the transfer of materials to Churchill by railroad was disrupted for five to six weeks because of changes in the permafrost layer. The team performed a collaborative risk and probability-based evaluation and scenario-planning exercise to develop recommendations. The team considered the operational and financial risks that FNA could face due to their assets being compromised due to environmental events, as well as the likelihood of occurrence. FNA also worked with scientists and NGOs to understand more impacts of climate change. The finance team used cost-benefit analyses, forecasting and scenario planning to detail risks and opportunities.
In 2015, Frontiers North Adventures adopted a proactive approach to managing climate change risks by creating an adaptation strategy. Frontiers North Adventures (FNA) runs programs for small groups keen on exploring the North’s wildlife and culture. Climate change and its challenges are not merely probabilities with a negative connotation, but a reality for the family business in Canada’s North. The team had to devise a focused strategy to accommodate to the risks and opportunities presented by climate change. Through a comprehensive optimization of current operations, the business directed its efforts toward an adaptation strategy to climate change so as to guarantee its viability for the future. The accounting team had a substantial contribution to FNA’s climate change adaptation strategy. They applied a wide range of “traditional” accounting know-how to be of assistance to the FNA’s team to put their business on the right track to account for climate change. The result is an adaptation strategy that involves optimizing current operations and exploring future opportunities. Being a small to medium enterprise (SME) meant that cash flow management and forecasting were vital to ensure liquidity and business viability. Given the size of the firm, the adaptation strategy was not a lengthy formal document but rather a commitment and way of thinking. FNA has identified future roles for their accounts to pursue these identified strategies, such as interpreting scientific reports to communicate the business risks, and use a climate change framework in their evaluation models.