A report prepared by the UN Intergovernmental Panel on Climate Change shows the long-term impact of climate change on individual countries is a cause for alarm.

Based on research from more than 200 scientists, the report found that countries like Australia are likely to face more intense and frequent fires, droughts, floods and storms.

Stream flows into one of the country's most critical water sources for industry and farming, the Murray Darling Basin, are forecast to reduce by up to 50%. Droughts are expected to increase by 20% by 2030 and by up to 80% by 2070 in key mining areas such as southern Western Australia.

Implications for resource companies

Companies in the mining sector cannot ignore the risks associated with climate change - doing nothing is probably the greatest business risk. Changes in the regulatory environment will increase raw material and energy costs.

Communities will have greater influence over whether mining operations should be given licences to operate based on their climate impact.

Increased droughts will mean that mines are likely to compete fiercely for scarce water.

Investment markets are already starting to re-price companies that are poorly positioned to compete in a warming world with a carbon tax. Their risk profiles, cost of capital and valuations are starting to experience the impact of management's tardiness in dealing with climate change.

It is also likely to mean less favourable terms for them when raising capital or borrowing against vulnerable assets in areas affected by more erratic weather patterns.

Resource efficiency is a must

As a result, survival in the mining, mineral processing and manufacturing industries will require much greater attention to resource efficiency. Environmental improvement initiatives such as reductions in carbon emissions or water usage need to be "hard-wired" into a company's operations in order for them to be successful.

The following three-pronged approach has proven successful in improving resource efficiency on minesites:

1. Generate ideas

Establish the baseline of where your energy and/or water are used, how much and what type;

Conduct idea generation sessions with key stakeholders to identify ways to reduce or eliminate energy or water use;

Prioritise ideas based on those with the highest impact and ease of implementation; and

Develop implementation plans which resolve resourcing and risk management issues.

2. Make those ideas work

Proactively review, coach and support those implementing the improvements;

Monitor their output key performance indicators to ensure the idea works. Should problems arrive, provide problem solving support; and

"Lock in" the new idea into the fabric of your business to prevent it being abandoned over time. This can involve changing procedures, accountabilities and staff induction manuals.

3. Get your wiring right

It is essential to ensure your organisation is hard-wired to support ongoing improvements. Wiring is basically the mechanics of management. It is the combination of an organisation's management systems, accountabilities, processes, staff, competencies and disciplines.

Companies who have publicly announced commitments to a reduction in carbon emissions are at risk of missing their targets if they do not have this wiring in place. Examples include resource efficiency KPIs, accountabilities and targets for their people.

In the new era of climate change, resource efficiency must be an integral part of a mining company's operations. Those businesses that build resource efficiency into their wiring and prioritise their improvement initiatives are likely to reap significant benefits compared to the laggards in this space.