Supply Chain

China's Role in Adaptation?

This infographic in Fast Company got me thinking:  Is China the answer to African resilience? final version use africa

Anyone worried about climate change would be agog at what this map says:  That Africa (including, it looks like, even the African Sahel, based on the arrow) will be China’s breadbasket!  But other maps of Africa, suggest this might be a fantasy ND-GAIN’s data (as well as that of e.g. Maplecroft) suggest that Africa is vulnerable, including and especially in its food sector.

map

But what if African economic development changed these risk maps?  Then, could we see the sort of hope illustrated in that fantastic Fast Company arrow?

GAIN identifies two types of countries vulnerable to climate change – those ready for investment (due to their economic, social and governance perspectives) and those that are not.  My audience often asks me, how will those countries unready for adaptation investments become less vulnerable?  China, seemingly, is providing that answer.

The Economist reported on the Centre for China & Globalization and National Bureau of Statistics numbers, which showed that China’s direct investment flows are edging toward a slight majority of outflows this year, with around $130B in outflows and about $120B in inflows projected, and Africa is one recipient of that outbound investment. The story we know well is that state-owned enterprises are searching for resources in Africa.  And mining is a part of this story.   But private Chinese firms also are pioneering in the African marketplace, as Peter Orzag explains in Bloomberg.

Earlier this year, Reuters reported that China will extend over $12B in aid to Africa in future years.

Earlier this month, as China’s leader wrapped up a premier tour of strong handshakes and lavish gift-giving around the Pacific following on APEC, I grew hopeful that China turns from a BRIC into a brick-builder that helps African countries and other emerging economies continue to build the foundation of their resiliency.

The Climate Adaptation Gap: How to Create a Climate Adaptation Plan

This article originally appeared in Triple Pundit: The Climate Adaptation Gap: How to Create a Climate Adaptation Plan

Editor’s note: This is the third post in a series on the climate adaptation gap. Stay tuned for future installments here on TriplePundit! In case you missed it, you can read the first post here and the second post here.

Screen Shot 2014-06-05 at 10.35.51 PMBy Joyce Coffee

In a previous post, I explained how to determine climate-related risks in your supply chains, capital assets and community engagements. With that knowledge, how do we determine strategies to prepare your most vulnerable assets? It’s likely that a storm will prod corporate risk managers and business-continuity planning managers to take stock and begin instituting telecommuting policies, diversifying their supplier chain to other geographies and advising the small businesses they rely on how to develop a resiliency or adaptation plan.

Here is what it takes to do so:

  1. Start with adaptive actions already in place. Shift your thinking to resiliency from greenhouse gas mitigation, and revel in a new set of actions you can feature and enhance as part of a growing global corporate strategy.
  2. Review local climate-change impact projections.
  3. Identify vulnerabilities relevant to your supply chain, capital assets and community engagements.(extreme heat, extreme precipitation, ecosystem changes, fire, floods, inundation, sea-level rise)
  4. Prepare an economic risk analysis that adds these risks to your financial modeling for risks avoided.

Finally, they must create a short- and medium-term plan that:

  • Sets priorities for adaptations with collateral benefits; e.g., mitigating greenhouse gas emissions (onsite stormwater management), improving employee morale (work-from-home options) or buoying your reputation (shoring up public health systems in one of your supplier hubs).
  • Establishes as priorities adaptations with a collateral improvement to your bottom line and your employees’ quality of life.
  • Includes financials for avoided risks to explain and promote any additional costs not covered by collateral benefits.

Here is a window into how this sort of evaluation works: Perry Yeatman, Principal of Mission Measurement, the global leader in measuring social outcomes, notes that based on her prior work at Kraft Foods, the key to resiliency in the cocoa supply chain involves examining all the vectors impacting farmers. These include demographic shifts, community engagements, diversity of crops and agrarian livelihoods. She contends that it matters to our ample supply of chocolate bars that cocoa farmers are aging, their children are migrating to cities and farmers need to raise chickens to diversify their nutrition among other personal and community pressures that contribute to crop viability.

Businesses new to climate adaptation need only look to peers with their own plans for invaluable resources. They also may find helpful tools from government-backed organizations that understand what climate adaptation looks like and, importantly, how to create an institutional commitment to climate adaptation.

Two that I especially like are: Private Sector Engagement in Adaptation to Climate Change, a report from the Organization for Economic Co-operation and Development, and Making Cities Resilient:  My City is Getting Ready.

Based on the latter, here is a 10-point quick-guide checklist I developed for making companies resilient:

1. Include climate adaptation in a member of the C-suite’s job description. Establish a cross-function climate-adaptation working group as well as connections with local and regional governments in key geographies in your enterprise, especially operations and supply chain.  Consider collaborating with key members of your supply chain, industry peers and neighboring businesses on climate-adaptation planning and execution. Ensure that all departments understand their role regarding disaster-risk reduction and preparedness.

2. Include budget lines for both proactive adaptation measures and recouping from extreme events.  Include climate adaptation in performance reviews for C-suite members, lieutenants and managers.

3. Incorporate climate adaptation in your initial emergency-preparedness and continuity plans with annual updates.  Ensure that this information and the plans for your corporation’s resilience are readily available to your leadership team and fully discussed with them.

4. Invest in and maintain critical infrastructure that reduces risk, such as flood drainage, snow removal, vector-borne disease prevention and heat mitigation for workers and machinery, adjusted where needed to cope with climate change. Consider supply-chain and building decisions with these risks in mind.

5. Assess the safety of all facilities, especially those in locations vulnerable to extreme weather events (coastal, arid) and upgrade or move.

6. Engage with local governments to ensure that climate-adaptation regulations protect residents and economic growth. Identify your most vulnerable employees (age, income, tasks, geography) and plan especially for their safety.

7. Establish education programs and training on disaster-risk reduction throughout your enterprise, not just for disaster preparedness but also for heat exhaustion, vector-borne disease and the like.

8. Protect and enhance ecosystems and natural buffers in and near your holdings to mitigate floods, storm surges, extreme heat and other hazards.

9. Install early-warning systems and emergency-management capacities in your enterprise and hold regular preparedness drills.

10. After any disaster, ensure the needs of survivors are placed at the center of reconstruction.  Click here for communications guidelines.

Image credit: Making Cities Resilient:  My City is Getting Ready

Read more in the Climate Adaptation Gap series:

  1. Bridging the Climate Adaptation Gap: From Recognition to Action
  2. Bridging the Climate Adaptation Gap: Relative Risks of Geographies in Supply Chains
  3. The Climate Adaptation Gap: How to Create a Climate Adaptation Plan

Joyce Coffee is managing director of the Notre Dame Global Adaptation Index (ND-GAIN). Coffee, who is based in Chicago, serves as the executive lead for related resiliency research, outreach and execution. Stay tuned for the next post in “The Climate Adaptation Gap” series on Tuesday, June 17. The series is taking a deep-dive into the complicated look at supply chain risk assessment.

 

Bridging the Climate Adaptation Gap: From Recognition to Action

This article originally appeared in Triple Pundit http://www.triplepundit.com/2014/05/bridging-climate-adaptation-gap-recognition-action/

Editor’s note: This is the first post in an ongoing biweekly series on the climate adaptation gap. Stay tuned for future installments here on TriplePundit!

Joyce Coffee, Notre Dame Global Adaptation Index Managing Director, opens last year's ND-GAIN Annual Meeting.Joyce Coffee, Notre Dame Global Adaptation Index Managing Director, opens last year’s ND-GAIN Annual Meeting. 

By Joyce Coffee

Recent data indicate that a gap exists between corporations understanding the big-picture risks of climate change and their actions to address those risks to shore up their bottom line.

MIT’s Sloan Management Review published results of the annual sustainability survey they conduct withBCG (aka The Boston Consulting Group). In Harvard Business Review‘s synthesis, they note: “The vast majority of respondents in a new Sloan and BCG survey say climate change isn’t a significant issue … And of the 27 percent that acknowledge climate change is a risk to their businesses, only 9 percent say their companies are prepared for the risk.”

In contrast to this data, another corporate survey—the annual World Economic Forum Global Risk Report–says, this year, four out of the top 10 global risks derived from the World Economic Forum’s global risk perception survey relate to climate disruption:

  • Water Crisis
  • Failure of Climate Change Mitigation and Adaptation
  • Greater Incidence of Extreme Weather Events
  • Food Crisis

These risks share space with other risks such as high unemployment, fiscal crisis and political and social instability.

As the report starts: “To manage global risks effectively and build resilience to their impacts, better efforts are needed to understand, measure and foresee the evolution of interdependencies between risks, supplementing traditional risk-management tools with new concepts designed for uncertain environments.”

The takeaway from WEF’s report: It’s up to all of us to build and refine the proper measurement tools to ensure we are creating business opportunities that offer rewards for humanity in this era of climate risk. A goal will be to pair other notable trends about sustainability progress to lead the way.

So, based on the WEF numbers, if corporations see a risk, but, based on the MIT numbers, they do nothing about it, that gap suggests that businesses are not yet sure how to manage the risk that a changing climate brings to their value chains.

Since climate adaptation relates to the direct impacts on our most important assets—our employees, our customers, our communities and our families–those who advise corporations possess a great opportunity to demonstrate to their clients the significant collateral benefits of a five-step plan of adaptation action. The five steps are outlined briefly here, and will be rolled out in-depth throughout a six-part, biweekly series on Triple Pundit.

  1. Examine the relative risks of geographies in supply chains. Where are your most vulnerable communities and supply chains? What resilience can be built to protect these people and assets?
  2. Identify relevant vulnerabilities in geographies where you maintain significant human and capital assets. Tools like ND Global Adaptation Index can help, plotting countries on a matrix and digging into specific country profiles. When assessing their global risks, corporate leaders can also employ other indices to inform their thinking—from Transparency International’s Corruption Perception Index, to the major credit-rating agencies’ foreign-currency ratings, and the World Economic Forum’s Global Competitiveness Report.
  3. Review your business-continuity plans based upon these vulnerabilities and risks, perhaps including an economic risk analysis for the most likely issues. If you are just beginning this assessment, draft up a list of questions based on research surrounding steps one and two. Use this information to inform your business-continuity plan.
  4. List strategies that could be used to prepare your most vulnerable assets. What investment is available and what processes must be taken to secure these assets?
  5. Create a short and medium-term plan that does three things: 1) Starts with adaptive actions you already are taking as part of your business as usual. 2) Sets priorities of adaptations with collateral benefits; e.g., mitigating greenhouse gas emissions (onsite stormwater management), improving employee morale (work from home options) or buoying your reputation (shoring up public health systems in one of your supplier hubs). 3) And, very importantly, includes financials for avoided risks.

Many cities, including TorontoNew York and London publish their adaptation plans, and they are worth a look for inspiration.

Read more in the Climate Adaptation Gap series:

  1. Bridging the Climate Adaptation Gap: From Recognition to Action
  2. Bridging the Climate Adaptation Gap: Relative Risks of Geographies in Supply Chains
  3. The Climate Adaptation Gap: How to Create a Climate Adaptation Plan

Joyce Coffee is managing director of the Notre Dame Global Adaptation Index (ND-GAIN). Coffee, who is based in Chicago, serves as the executive lead for related resiliency research, outreach and execution. Stay tuned for the next post in “The Climate Adaptation Gap” series on Tuesday, May 20. The series will deep-dive into the complicated look at supply chain risk assessment. Next up: “Relative Risks of Geographies in Supply Chains”

Community supply chains: resilience through insurance innovation

Community supply chains:  resilience through insurance innovation At last week’s World Economic Forum in Manila, every presentation I heard mentioned the devastation of Typhoon Haiyan (aka Yolanda). A special session on decision tools for preparing for climate and natural disaster offered the chance for a panel of insurance brokerage executives, a Philippine Senator, a representative from the world’s most engaged foundation on climate resilience and a senior executive at the International Red Cross to develop an innovation – one salient project – to save the world.

Specifically, we looked at ways to avoid a breakdown in community supply chains when a major disruption occurs. This was of special interest to the Senator since after the typhoon, no goods were available for weeks after the storm at the sari sari store, the grocery store or warehouses.  And when the government and development agencies brought in relief materials, this forced out local sellers with goods to sell at legitimate prices. A black market in relief goods emerged, although in a limited way, it turns out.

With this backdrop, we pondered what sort of mechanism could help solve for these issues in future crisis. Here is what we devised: community-based, parametric-triggered insurance. Talk about jargon. WEF participants roared at that winning title – but we surprised them with functional ideas, which envisioned that starting now, in risk-prone communities:

  1. Create a method for community payment into an insurance fund.
  2. Ensure that all members pay in their portion, and price the payment equitably.
  3. Ensure financial contact information for all participants.
  4. Index levels and types of events that could trigger loss.
  5. Pay out to all insurance holders immediately, regardless of proven loss from a disaster.

This idea isn’t brand new. I am aware of drought-triggered parametric insurance for Ethiopian farmers, for instance. But it is novel enough that most of us needed a guide to its distinction from indemnity insurance, which requires proof of harm before payout (a time-consuming process).

A lot of what ifs and issues aren’t addressed here, such as:

  • How to determine the level of storm event.
  • How to collect the insurance payment in cases where community members aren’t bankable.
  • How to ensure that all or most buy in, particularly in more urban areas where the “street-level bureaucracy” of rural communities is weak or non-existent.

Still, I bet this type of mechanism will grow in popularity and positive impact for natural disasters, and put my vote behind it as a resiliency innovation worth supporting.

And since this idea is going to be around for a while, please help us think of a better title with a catch acronym that translates around the world. Fine, OK and Swift come to mind as acronyms I’d be relieved to see in my community if all of my hopes and dreams were wrapped up in my family and rural sari sari store in Tacloban, Philippines, or in any of millions of communities like it around the world.

 

Supply Chains in the Face of a Changing Climate

This post originally appeared in Environmental Leader:  http://www.environmentalleader.com/2014/04/30/supply-chains-in-the-face-of-a-changing-climate/ The economic damages from weather-related disasters continue to climb worldwide, and will continue on that path. Proactively, organizations are making strides to anticipate and prepare for these climatic shifts.

Early April, Unilever CEO Paul Polman made a public statement calling for “decisive action to tackle climate change in order to secure the future of businesses and people around the world for years to come.” Unilever’s own response is a leading example of companywide sustainability plans, and includes a goal ofsourcing 100 percent of its agricultural raw materials sustainably. Additionally, the National Hurricane Center announced its plans April 18 to issue separate storm surge watches and warnings—in addition to wind notices—beginning in 2015 to help communities better prepare for approaching storms, the Washington Post reported.

This new normal of increased weather-related risk and vulnerability is being faced by communities as well as multinational corporations dependent upon supply chain networks around the world.

As an example, extensive flooding in Thailand in 2011, badly damaged global parts suppliers for the automotive and electronic industries causing an estimated $15-20 billion in losses. This weather event hurt the bottom line of major multinational corporations around the globe, including Cisco, Dell, Ford, Honda, HP, Toyota and many others.

Honda’s losses totaled more than $250 million when flood waters inundated an auto assembly plant, and HP estimates that more than half of its seven percent revenue decline in the fourth quarter of 2011 reflected a shortage of hard disk drives caused by this Thai flooding. While no single storm can arguably be blamed on climate change, experts predict that the world will be wracked by more and more storm events like the Thai flood of 2011.

What tools can corporations employ to inform thinking about supply chains, especially as we enter an era when more companies are adding a climate-change dimension to strategic planning?

A supply-chain report from CDP, the global nonprofit that measures vital environmental information, indicates that 73 percent of executives surveyed now see physical risks from climate change disrupting their supply chain.

When assessing their global risks, corporate leaders can employ a full tool belt of indices to inform their thinking.  From Transparency International’s Corruption Perception Index, to the major credit-rating agencies’ foreign-currency ratings, and the World Economic Forum’s Global Competitiveness Report companies can better measure and evaluate decisions about supply-chain moves around the world.

The Notre Dame Global Adaptation Index is the latest tool that supply-chain managers can call upon when confronting this new strategic planning landscape.

PepsiCo—which relies on agriculture as do the growers and communities where the global food-and-beverage company operates—uses the ND-GAIN.

“To improve the resilience of our supply chains across the world, we need sound, scientific data and tools such as the Notre Dame Global Adaptation Index, which is critically important in researching a country’s vulnerability to global climate risks,” maintains Dan Bena, PepsiCo Senior Director of Sustainable Development.

ND-GAIN is an index that illuminates which countries are best prepared to deal with climate disruption. The Index seeks to unlock global adaptation solutions in the corporate and development community that save lives and improve livelihoods while strengthening market positions.  It informs strategic, operational and reputational decisions regarding supply chains, capital projects and community engagements.

Using 17 years of data, ND-GAIN ranks more than 170 countries annually based on how vulnerable they are to droughts, super storms and other natural disasters. It also captures how ready they are to employ adaptation solutions. The Index, formerly housed at the Global Adaptation Institute in Washington, D.C., moved to the University of Notre Dame in April.

Nancy Gillis, Senior Manager of Climate Change and Sustainability Services, at EY, notes those national governments that are looking at opportunities to stimulate economic development want to be more attractive to large companies and look for ways to shore up vulnerabilities.

“There is a lot of focus on energy, transportation and other infrastructure investments.  ND-GAIN helps point out relative strengths and weaknesses and gives governments and corporations a lot of information to consider partnerships that ensure a corporate license to operate.” Forward-thinking corporations are incorporating extreme-event planning into their business-continuity preparations to reflect our climate-changed future.

What’s clear is that each new catastrophic storm event will bring new calls to action for more data to help inform the private sector on how best to prepare for—or better yet prevent—supply chain disruptions when the “next” storm comes along. We have entered a new era where adaptive management of climate risks will play an increasingly important role in board rooms and C-suite offices across the globe—particularly for multinationals with extensive supply chains exposure in the most vulnerable places.

Joyce Coffee is managing director of the Notre Dame Global Adaptation Index (ND-GAIN). Coffee, who is based in Chicago, serves as the executive lead for related resiliency research, outreach and execution.

This post originally appeared in the Environmental Leader http://www.environmentalleader.com/2014/04/30/supply-chains-in-the-face-of-a-changing-climate/

Climate Adaptation as a Business Opportunity –ND-GAIN as a tool to help

There are some incredibly positive sustainability trends baring themselves out today:

  • Sustainability is becoming more a part of the ethos of the c-suite
  • Non-profit and public/private partnerships are growing in impact
  • Sustainable growth is being fueled by innovation in business/technology

Yet these hopeful trends are paired with a more sobering theme:   climate risk

This year, 4 out of top 10 global risks derived from World Economic Forum’s global risk perception survey, http://www.weforum.org/reports/global-risks-2014-report,  relate to climate disruption

3.Water Crisis

5. Failure of Climate Change Mitigation and Adaptation

6. Greater Incidence of Extreme Weather Events

8.Food Crisis

 

These risks share space with other risks such as high unemployment, fiscal crisis and political and social instability.

More specifically, one statistic from CDP’s supply chain survey, https://www.cdp.net/CDPResults/CDP-Supply-Chain-Report-2012.pdf,  really caught my attention:  more than 70% of corporate respondents saw risks to their supply chain from climate disruption.

And indeed, these risks are baring themselves out. 2011’s unprecedented flooding in Thailand alone resulted in $20B economic losses, Honda’s losses totaled more than $250 million when flood waters inundated an auto assembly plant, and  - to take another climate impact - General Motors calculated that a one-month disruption at one of its production facilities in Mexico hard hit by drought, could result in a loss of $27 million in net income.

But, as with any business risk, known risk can spell opportunity.  Vulnerable sectors crucial to human health and prosperity that also can be greatly improved by innovation – such as food, energy, and water –  are prime for investments that help us adapt to climate risks.

The US Military calls climate change a threat multiplier and instability accelerant, and some suggest that climate change fueled conflicts in Chad, Darfur, Yemen and Syria.

And it is not just civil conflict:  A report from the World Bank, http://climatechange.worldbank.org/sites/default/files/Turn_Down_the_Heat_Executive_Summary_English.pdf, says that many important development advances of the 20th Century, such as food security, global health and poverty reduction, may be undermined by climate change.

Recently, the Notre Dame Global Adaptation Index produced an analysis that showed it will take more than 100 years for lower income countries to reach the resilience of OECD or richer countries.

While I am concerned for all of us that unprecedented climatic variations are making the world more vulnerable, I reflect on the positive business trends and am certain we can apply our innovation, leadership, and partnerships, to building resiliency.

In fact, there are countless examples of corporate-lead climate adaptation around the world that are helping to decrease the impacts of droughts, superstorms, fires and floods caused by climate disruption.

Leading companies are leaning in, showing the importance of adaptation for their value chains by applying themselves to those vulnerable sectors crucial to human health and prosperity.

Increasing resiliency in food:

- Monsanto is developing new drought-tolerant corn varieties through the Water Efficient Maize for Africa, project, in partnership with the African Agricultural Technology Foundation the Bill and Melinda Gates Foundation, the Howard G. Buffett Foundation and the U.S. Agency for International Development.

- The global reinsurance firm Swiss Re is helping farmers in Ethiopia tackle current and future precipitation uncertainty, providing insurance against climate-related losses.

- PepsiCo is rolling out its i-crop precision-farming technology, enabling farmers to monitor, manage and reduce their water use while maximizing potential yield, in collaboration with the Columbia Water Center of the Earth Institute at Columbia University.

Increasing resiliency in infrastructure:

- Engineering firms such as AECOM and CH2MHill are integrating adaptation into coastal and energy infrastructure systems to protect future generations living in urban areas.

- Ushahidi, a small nonprofit software company, uses the power of crowdsourcing software to distribute real-time information including about roadways and transportation, during disasters in lower income countries and around the world.

Increasing resiliency in water

- Unilever, in partnership with the UN Global Compact and the World Food Program, is spearheading local water use reduction, freeing-up water previously used for clothes washing for other applications in India.

- Ecolab is creating water efficient technologies for commercial and industrial infrastructure that are more resistant and resilient to climate change.

But how do we join these proactive companies on finding market value in resiliency?

As companies are starting to realize that their bottom line is intimately connected with climate disruption, the private sector wants to know where do we get relevant information to inform our leadership?

There are many valuable tools out there.

The ND-Global Adaptation Index, http://index.gain.org, ranks the 193 UN countries annually based on how vulnerable they are to droughts, super-storms and other natural disasters and, uniquely, how ready they are to successfully implement adaptation solutions.

We measure the countries’ vulnerability of health, food, water, and infrastructure and the social, governance and economic readiness of the country to take on investment, thus informing many elements of our value chain.

Using 17 years of data, we examine over 50 indicators for each country in the index, and some real winners emerge from these hundreds of thousands of data.

It’s no surprise, European and North American countries are among those most prepared for climate risk.

And many developing countries are making the most and the fastest improvements – as companies invest in these growing markets.

The BRIC countries are doing better than the global resiliency average.  And there are some surprises, like Rwanda, which has moved up  the rankings 40 positions, primarily by improving its economic, governance and social readiness measures, making it a more viable investment opportunity.

Many companies may find the greatest business opportunities in more vulnerable countries with a high demand for adaptation products and services, but also high readiness based on a transparent, safe and fair investment and regulatory environment.

We can use the ND-GAIN matrix to examine countries in our supply chains, consumer markets, capital assets and community engagements to better understand our relative risks and opportunities.

I’ve found that one of the reasons climate adaptation is resonating with the private sector is that it is a very personal issue.  The indicator of climate adaptation success is not an ethereal Metric Ton of CO2e.  Adaptation is about direct impacts to our most important assets - our employees, our customers and our communities and their prosperity yesterday, today and tomorrow.

We have the opportunity to save lives and improve livelihoods for millions around the world while improving our market positions by matching the power of data, with corporate innovation, leadership and partnership.

Adaptation provides collateral benefits to

  • Mitigate greenhouse gas emissions
  • lift more out of poverty,
  • strengthen economies,
  • prevent civil conflict,
  • buttress food security,
  • protect natural resources and
  • ensure a brighter future for generations to come.

I encourage you to ask yourself the climate adaptation question of your work to create business opportunities out of resiliency that offer rewards for humanity.

(This is the One Great Idea presentation I gave at the Greenbiz Forum today).

Climate on the Davos Agenda

I’m thrilled that the World Economic Forum has placed climate change squarely on the agenda for next week’s forum at Davos.  It makes sense since its 2013 Risk Report noted climate change, combined with economic upheaval, as a top hazard to the global economy. This emphasis for the Forum is particularly important. The convening of corporate and private sector leaders has played a lesser role in the global climate change efforts, which primarily have been driven  by the United Nations.  Fortunately, it appears the private sector, through the power of the Forum, is going to play a bigger role in this discussion. Perhaps that will turn the UN efforts toward more action.

Next week, all World Economic Forum participants can attend sessions specifically dealing with adaptation and resiliency, including:

  • An ideas lab on adapting to climate change
    • A discussion of the role of business and supply chains in making sustainability a mainstream issue
    • A plenary on the interaction of the climate and development global agendas toward 2015
    • A conversation about building resilience to natural disasters linked to extreme weather events and climate change

I’m eager to see the direct and indirect impact of The Forum’s climate adaptation conversations.

Beyond Davos 2014, World Economic Forum will participate actively in the Climate Summit at the UN in New York on Sept. 23,  the UN Framework Convention on Climate Change Conferences of the Parties in Lima, Peru, in late 2014 and subsequent convening.  This work reflects a set of robust Forum partnerships. The lead is Dominic Waughray, a member of ND-GAIN’s Advisory Board.

 

Feeding a climate-altered world

How will we feed the world amid drought, fire, floods and population shifts?  While I don’t yet envision a Malthusian catastrophe, per se, I think it critical to begin a conversation about this question as it relates to our work.  At last month’s ND-GAIN Annual Meeting at the Wilson Center in Washington, D.C., I derived several key takeaways from our panelists*:

  1. Climate change could undermine development advances of the 20th Century, such as the interrelated issues of food security, global health and poverty reduction, the World Bank contends.
  2. The largest demand for funds in the Pilot Program for Climate Resilience is for agricultural and landscape-management projects and, among fund recipients, water is the second largest.  Project examples include $5M to Mozambique (ND-GAIN Rank 137 http://index.gain.org/country/mozambique ) for drip irrigation and other agriculture enhancements, $15M to Zambia (ND-GAIN Index http://index.gain.org/country/zambia ) to insure farmers against extreme weather and $22M to Bangladesh, (ND-GAIN Rank 145 http://index.gain.org/country/bangladesh) for a seed selection and storage and cropping cycles project.
  1. As climate portfolios grow to include resiliency and adaptation, in addition to greenhouse gas mitigation, the World Bank notes a decreased participation from the private sector, says Patricia Bliss-Guest Program Manager of Climate Investment Funds there. Through its pilot program for climate resilience, the Bank works to incent additional private participation in addition to government assistance.
  1. Microinsurance is a major priority for the insurance sector in emerging markets and insurance can send important price-based signals to the market, notes Lindene Patton Chief Climate Product Officer at Zurich Insurance Group Ltd. She cautions against subsidizing insurance too much, adding that the question of climate risk is generally understood by the reinsurance industry to be a people, not a physical science, problem.
  2. The key to resiliency in the food supply (taking cocoa as a case) involves examining all the vectors impacting farmers, including demographic shifts, community engagements, diversity of crops and agrarian livelihoods, maintains Perry Yeatman Principal, Mission Measurement, based on her work at Kraft Foods. She says it matters to our ample supply of chocolate bars that cocoa farmers are aging, their children are migrating to cities, the farmers need to raise chickens to diversify their nutrition and their community structures are crucial to their farms’ viability.
  3. While climate change might favor the Eastern Europe and the Americas, a tremendous amount of investment for water infrastructure is necessary elsewhere in the world, believes David Gustafson Senior Fellow and Environmental and Ag Policy Modeling Lead at Monsanto. He favors partnerships with local and global institutions to address this concern, especially as the global agricultural community looks to intensify its production efforts sustainably to feed our  ever-growing world population.

In a future post, I plan to address the approaches for increasing this agricultural intensity. As I write this, my alumni magazine arrived with the cover story, “GMO vs. Fresh Food….”   I’ve had a study diet of this issue and look forward to continuing the dialogue.

*A video of the panel can be found here:  https://www.youtube.com/watch?v=V09U8W00Mk4&feature=c4-overview-vl&list=PLF545132229EF6E68

The Auto Industry's Real Climate Risk

An article caught my attention last week from the Auto Industry Action Group, entitled “How Climate Action May Impact the Auto Industry.”   Initially, I thought it might tell the story of an industry that has seen significant disaster-related setbacks taking charge to prevent future problems. Actually, it proved to be a polemic about how to protect the industry from climate-related regulations.

 

Like the finance industry, which gained important business-continuity planning lessons from 9/11 and more recent disasters for example, Goldman Sachs’ stellar disaster-recovery preparations that enabled it to keep its lights and power on in lower Manhattan after Hurricane Sandy). I presumed that automakers were also familiar with risk mitigation, drawing lessons from disruptions to their supply chain after Japan’s devastating 2011 earthquake, tsunami and nuclear disaster.

 

I bet there are a few leaders in the auto industry who are assessing the realities of the climate-change issue  and are mulling risk evaluations that, for instance, include a look at the relative vulnerability by country of origin of their major suppliers – China Japan, Korea and Mexico.  As of 2011, Japan and Korea possessed a similar level of readiness, and Mexico and Japan’s vulnerability matched, but China was the least prepared and most vulnerable of all of them. (Check out the vulnerability/readiness matrix here to compare countries.)

Others closer to home may be thinking about these risks. The environmental choir, namely The American Sustainable Business Council, published an interesting article about small business risks from climate adaptation.

I can only assume that many car dealerships, which stand at the tail end of the industry’s value chain, consider themselves small businesses. Without climate-adaptation leadership, they could find themselves in trouble.  Among several compelling statistics noted in the article, an estimated 25 percent of small- to-mid-sized businesses don’t reopen after a major disaster, and 57 percent of small businesses have no disaster-recovery plans.

These small businesses represent our American jobs and the backbones of our communities. As climate-related risks grow at home and abroad, we should make it a priority to find the right tools to help all business owners manage for a dramatically changed future.

 

The Next Silk Route

Seeing this map of the melting Arctic Sea and subsequent shipping routes in the Economist a few weeks ago startled me.  I was programmed to think of voyages and conquests by the Economist’s cover picture of a ruddy Viking. And this triggered, at least for me, a profound reality: Everything we know about shipping is about to change because of climate change.

Just hearing that certainty alone sends an Arctic chill down my spine.  I’m not ready to give up that icy white at the top of my son’s globe. Or all the mystery, epoch history, science and beauty locked up there simply to buy get cheaper toys, clothes, solar panel parts, fish protein, energy and the list goes on and on.

But ready or not, the draft National Climate Assessment suggests we already are registering a decrease in sea ice, snow cover and glaciers, as well as an increase in ocean temperatures. Indeed, reflecting the physics of glaciers, they are retreating faster than most models originally had predicted.

So the climate has created an opportunity for this era’s Genghis Khan to open up trade routes that were a mere child’s dream of racing boats across a plastic globe only a few years ago.  I’m heartened to see that a multinational collaboration is taking the lead.  The Arctic Council comprises adjacent countries: the United States, Canada, Denmark (representing Greenland and the Faroe Islands), Finland, Iceland, Norway, Russia and Sweden.  Corporations are chomping at the bit for the new shipping, fishing and extractives possibilities and a responsible policy will help to ensure safe handling.

Time has given the Vikings and Genghis Khan a romantic and heroic reputation as adventurers. Let’s hope the heroism of this new era of profound geologic change leads to two developments: the halt of other climate events through employing greenhouse gas mitigation and a careful and considerate approach to the use of our new geographical landscape.