DISRUPTIVE change can come quickly, sweeping away management assumptions, upsetting strategic certainties and destroying the organisations founded on them. But the more dangerous type of change comes slowly, so slowly that those assumptions and certainties stand until it is too late for incumbents to react. And climate change is the slowest-moving and most dangerous of all.

There are few outright climate change deniers even in the industries that profit most from finding and selling hydrocarbons. But those companies are still moving too slowly to meet, let alone see off, the challenge of global warming.

It is a gap that even the industry’s own have noticed. One of the aims of the UN climate change conference in Paris is to agree to a 2C limit in global temperature rises over pre-industrial levels. But a study overseen by, among others, Sir Mark Moody-Stuart, ex-chairman of Shell, and Lord Browne, BP’s former chief executive, has pointed out the ‘significant disconnect’ between the fundamental rethink required to meet that goal, and the efforts of companies themselves.

Critical Resource, the report’s producer, examined a sample of 13 natural resources companies. All but three thought climate change was a material business issue, but only one had prepared a scenario for a 2C limit.

What are such companies planning instead?

Continued growth in their traditional businesses, according to a separate report from Carbon Tracker, a think-tank. It warns that fossil fuel companies risk wasting $2.2tn on projects — new coal mines, Arctic oil exploration — that technology advances and climate change policies could render uneconomic.

The climate challenge differs from the ‘boiling frog’ scenario, in which the slowly cooking creature is oblivious to its fate. It reminds me rather of the fatal flaw of Eastman Kodak. It foresaw the advent of digital photography as early as the 1970s. But the arrival of the digital products that ultimately drove it into bankruptcy was staggered over 30 years. Crucially, the margins Kodak could harvest from roll-film stayed high until relatively late in its history.

Anthony Hobley, Carbon Tracker’s chief executive, also likes the analogy of the US locomotive industry.

A combination of complacency, a desire to maximise profits and historic attachment to steam led some manufacturers to dismiss the threat from diesel locomotion. A few recognised the era of steam’s growth was over and reinvested accordingly.

But others did not. Samuel Vauclain, longstanding chairman of Baldwin, which had manufactured the famous ‘Old Ironsides’ locomotive in 1832, declared in 1930 that steam would still be puffing away in 1980. “We are just beginning to realise what actually can be done with the steam engine,” he said. Baldwin stopped producing locomotives in 1956.

Further reading

Two other factors keep the pressure off fossil-fuel companies. Innovation theory teaches that challenger products often emerge that are ‘good enough’, winning market share as incumbents get better at producing items that customers increasingly disdain. The last steam locomotives were the fastest and most efficient ever produced — as Mr Vauclain forecast. But alternative energy is not yet widely seen as ‘good enough’ to displace gas, oil or coal. Energy customers still care mainly about reliability of supply.

A second difference is that the change brought by diesel locomotives and digital cameras came from innovation and market forces, not political haggling. But societal, political and corporate consensus is needed to limit climate change. While uncertainty prevails about climate policy, it makes sense for fossil-fuel companies to go on building their historically profitable businesses.

Many fossil-fuel companies have joined the fight to mitigate the impact of climate change.

Their sluggish progress towards taking further action is not because they fail to appreciate its consequences, says Sir Mark Moody-Stuart. “It’s just [due to] the extreme difficulty of addressing the issues.”

But history shows that the more slowly disruption arrives, the easier it is for the disrupted to delay adapting to it — and the more damaging their eventual, inevitable collision with reality.

As Mark Carney, governor of the Bank of England, put it in a speech in September warning of the financial risks of global warming: “The more we invest with foresight, the less we will regret in hindsight.”

andrew.hill@ft.com

Published in Dawn, Business & Finance weekly, December 7th, 2015