Corporate Risk

Vanguard Adaptation Leader: U.S. Department of Defense

The community of adaptation leaders should, indeed must, bolster its essential link with the national security apparatus.  Three reports suggest why:

1.     The Department of Defense has created a Roadmap (2014) with an objective to collaborate with stakeholders, including the adaptation community. Specifically, it says it seeks to promote deliberate collaboration with stakeholders across the Department and with other Federal, State, local, tribal and international agencies and oorganizations in addressing climate change considerations.

The report maintains that climate change “is a long-term trend, but with wise planning and risk mitigation now, we can reduce adverse impacts downrange.”  The authors’ use of the term “downrange” is important. While it’s not necessarily the future, it’s a target that may be farther away and, therefore, requires careful preparation to nail. 

The report concludes: “By taking a proactive, flexible approach to assessment, analysis, and adaptation, the Defense Department will keep pace with a changing climate, minimize its impacts on our missions, and continue to protect our national security.”

2.     In 2015, the DOD released another report on the national implications of climate change that notes the need to adapt military facilities – many located along the coasts and/or in arid environments – and to develop adaptation strategies to diffuse risks in developing countries.

3.     The White House in September released a Statement and a National Security document about integrating climate change into national security. But, in a missed opportunity, the documents do not mention adaptation.

As panel submission deadlines loom for the biannual National Adaptation Forum, I hope its steering committee has invited the DOD to speak at the May 2017 forum.  The Defense Department is at the frontline in its adaptation leadership. We should try to leapfrog one another, helping to inform adaptation strategies for communities of stakeholders and to enhance research to action.

 

 

 

Stranded Assets: Preventing the Next Era of Climate Change

I first heard the term “stranded assets” at a Bloomberg event in New York City during Climate Week 2014.  For me, the term conjured up images of homeowners and their dogs waiting atop roofs to be rescued during Hurricane Katrina.  Yet that didn’t seem right for the context of the discussion, and a quick Google search set me straight: They were talking about coal-fired power plants that would be worth nada on Wall Street should a carbon tax change the market.  (That was almost two years before Peabody Coal went bankrupt.)

Two years later at Climate Week NYC 2016’s Sustainable Investment Forum, stranded assets still seems to mean the same thing to investors – coal – and they mull it increasingly. The industry understands the term as holdings that need to be written down before the end of their expected life span. 

But BlackRock is an early leader in unveiling it's future meaning. Read more here at my oped published in Triple Pundit:

http://www.triplepundit.com/2016/10/stranded-assets-preventing-next-era-climate-change/

Laurels for Credit Rating Agencies:Levers of Change in the Climate Adaptation Market

The voices and actions of the financial industry are critical to change capital market policy and practice change. That’s why I’m thrilled credit rating agencies are seizing their role as levers of change in the adaptation market. Consider these three examples of their newfound interest:

  1. Standard & Poor’s explicitly weighs adaptation in its new Proposed Green Bond evaluation tool.

  2. S&P proposes an Environmental Social and Governance risk exposure assessment.

  3. In its proposed ESG assessment tool, S&P acknowledges the differences in the time horizon of risk

Read my oped published in Triple Pundit for more insights: http://www.triplepundit.com/2016/10/laurels-credit-raters-levers-change-climate-adaptation-market/

Earth Hour Sheds Light on 5 Grim Climate Facts

This post originally appeared on http://www.crs.org/stories/earth-hour-sheds-light-5-grim-climate-facts Climate change affects lives each day around the globe. From summer heat waves to drastic floods, it touches the wealthiest individuals living in modern cities and the poorest in developing countries. The effects of climate change can reach far beyond the expected ecosystems, economic sectors and populations.

CRS and our partner in El Salvador are helping farmers like Candido Hernandez Orellana build back harvests ruined by drought. Photo by Oscar Leiva/Silverlight for CRS

CRS and our partner in El Salvador are helping farmers like Candido Hernandez Orellana build back harvests ruined by drought. Photo by Oscar Leiva/Silverlight for CRS

On March 19, from 8:30 to 9:30 p.m. local time, cities, landmarks and businesses around the world will turn off their lights for one hour. The goal of this Earth Hour is to highlight climate change dangers.

Climate change is happening now, and predictions for the future are grim.

Below are five of the most shocking climate statistics that you may have been in the dark about:

  1. Events influenced by climate change took 12,994 lives in 2015.

This startlingly high number, provided by the International Disaster Database at the Center for Research on the Epidemiology of Disasters, is up from 8,056 in 2014, showing just how dangerous climate change is becoming. There is a pressing need to adapt to climate change in order to protect lives threatened by droughts, fires, heat waves, storms, floods and landslides.

  1. The total monetary cost of events influenced by climate change in 2015 was $74.6 billion.

This data from the International Disaster Database highlights the huge economic impact. Besides the social, physical, and environmental needs, among many others, to mitigate and adapt to minimize future damage, there is an increasing economic need as well.

  1. 90% of the recorded natural disasters from 1995 to 2015 were influenced by climate and weather.

According to the U.N. Office for Disaster Risk Reduction, the United States had the highest number of disasters, followed by China, India, the Philippines and Indonesia. Resilience and disaster planning are needed to reduce risks and mitigate impacts of floods, heat waves, droughts and other potentially catastrophic climate-related events.

  1. With no action, climate change costs and risks will accumulate to an equivalent of an annual loss of at least 5% of global GDP.

A report by Jonathan M. Harris, Brian Roach and Anne-Marie Codur at Tufts University, “The Economics of Global Climate Change,” predicts losses of land area, species and forests; and water supply disruption, increased human health dangers and drought. These changes—affecting biodiversity, agricultural production and human survival—will likely be irreversible. Other, less predictable, effects may include changing weather patterns, rapid melting of major ice sheets and glaciers, and an increasing rate of global warming.

  1. The total annual cost of climate change on human health will total about $2 to $4 billion by 2030.

This estimate from the World Health Organization accounts for the detrimental effects of climate change on vital basic resources, such as clean air, safe water, adequate nutrition and protective shelter. WHO also estimates 250,000 more deaths will occur annually between 2030 and 2050 because of climate change.

These numbers underscore the great sense of urgency to act against climate change to protect innocent lives.

Author: Joyce Coffee is managing director of Notre Dame Global Adaptation Index. 

Patricia Holly, a University of Notre Dame student, contributed to this article.

Let's Create a Climate Adaptation Opportunity Standard to Catalyze Investors

Three examples illustrate a need  to inspire an adaptation marketplace. 1. the 2015 Paris Climate Agreement, unlike its 20 predecessors, prioritized adaptation & finance. 2. the 2016 Global Risk Perceptions Survey (WEF 2016) ranks failure to adapt to climate change 1st of 28 risks in terms of potential negative impact. 3. UNEP (2015) calculates the adaptation finance gap will be US$140-300B/year by 2030. There is a need for increased funding for adaptation projects, many of which create jobs & stimulate economies as a co-benefit of protecting human & natural communities from the effects of climate change. One barrier is the absence of an adaptation market, a mechanism by which adaptation projects can be traded as commodities, financed by private, government and development investors.

This absence is partly due to a lack of a standard measure for adaptation success that would e.g. create tradable adaptation credit, increase adaptation project bankability, and direct finance to short- and long-term adaptation projects.

What type of measure is needed to evaluate the potential success of adaptation projects? What types of investment decisions will it influence? Is it the same need for development and private sector investors? Addressing these questions will help to benchmark and establish a draft adaptation Standard in collaboration with  the private and development sectors.

A nascent investor-lead Global Adaptation & Resilient Investment (GARI) group is attempting to address this need. ND-GAIN & GARI have identified missing knowledge that will spur the adaptation market: a globally accepted project-level measure of adaptation success that assesses progress thereby quantifying opportunity for investors & inspiring a new marketplace that will improve both lives & economies in the face of climate change. The standard will direct investment flows into projects that have climate adaptation & market benefits, inspire investment for adaptation projects not previously considered, credit existing projects, & shape growth of investor tools, such as debt instruments.

 

This standard will be comprised of a unique & efficient set of indicators that measure the success of adaptation investments. Potential indicators will be evaluated against outcomes including avoided death & damage, avoided cost & collateral job, ecosystem & greenhouse gas mitigation benefits.

 

The creation of an international standard to measure climate risk & opportunity entails:

  1. Establish theoretical baseline standard of adaptation measurement
  2. Improve Standard concept through feedback from users
  3. Support investor community to pilot the Standard on existing & proposed adaptation investments
  4. Draft paper proposing a standards for adaptation project measurement
  5. Share knowledge with marketplace

 

The goal is to reduce barriers and foster growth in a global market for adaptation projects by expanding the number of projects, investors and improved human lives.

The ultimate outcome of this Standard will be to inspire a global market for adaptation projects that save lives & improve livelihoods through private sector & development agency investments that help prevent the avoidable & manage the unpreventable in the new era of droughts, super-storms, flooding, fires & other climate stresses & shocks.

Let ndgain@nd.edu know if you are interested in joining us in this important work!

WEF's Global Risk Report: Clarion Call for Adaptation

WEF Global Risks of Highest Concern 2016

WEF Global Risks of Highest Concern 2016

In 2016, the World Economic Forum’s Global Risks Report concentrates on the likelihood and impact of environmental and societal risks. Three of the top five most likely risks are environmental, including failure of climate-change mitigation and adaptation ranking as 3rd most likely and as the most potentially impactful. This year is the first time in almost ten years that an environmental risk has ranked first in terms of impact. Water crises and involuntary migration also rank in the top five for most impactful risks in 2016.  

Over time, climate-related issues have increasingly ranked higher in potential impact and likelihood of occurrence in this vanguard report.. These risks feature prominently in the highest concern list for the next 18 months. And, with a longer term view over the next ten years all five of the risks of highest concern relate to climate change: water crisis, failure of mitigation and adaptation, extreme weather events, food crisis and profound social instability importance of climate-related events.

The report presents many risks that are interconnected, such that they may be mitigated or aggravated by the same action or event. Climate change, as a trend, is heavily weighted, indicating strong connections with many other risks, including extreme weather events, water crises, biodiversity loss, and ecosystem collapse. These data indicate a need for nations, as well as businesses and local governments, to collaborate to address climate change – especially to implement and measure adaptation projects.

Important questions are now presented to the world. Climate change must clearly become a global priority, but what is the best way to go about both mitigating it and, adapting to it?  Some of those questions were addressed in the Paris Decision and Agreement, where a mitigation target is on par with not only a global adaptation goal, but also the humbling Loss and Damage. With Loss and Damage an official part of the agreement and the educated elite that participate in WEF’s survey defining major risks as the lack of adaptive capacity, there is a resounding clarion call to create adaptation actions in water and food security today that save lives and improve livelihoods.

Thanks to Patricia Holland, ND-GAIN Intern, for her help with this blog.

UNISDR Launches RISE Initiative for Disaster Risk-Sensitive INVESTMENT

“Economic losses from disasters are out of control and can only be reduced in partnership with the private sector.” ̶ United Nations Secretary-General Ban Ki Moon

 

The United Nation’s Office for Disaster Risk Reduction, or UNISDR, and PwC, the global professional services network, launched their ambitious R!SE Initiative in the United States early this month in Boston, seeking to embed disaster risk management into investment decisions.

R!SE reflects a new way of collaborating on a global scale to unlock the potential for public and private sector entities to take leadership on disaster risk reduction. The one-day event on March 2 focused on whether cities should be transparent and share their resilience gaps. That’s also the key question for ND-GAIN as we embark on our Urban Adaptation Assessment with the Kresge Foundation.

 

The R!SE agenda at its launch encompassed a wide band of issues to define and discuss what R!SE seeks to do and why it matters:

  • A session defined the initiative, its different activity streams and projects already underway.
  • One explained why preparedness is important to the U.S. government and how the Federal Emergency Management Agency’s new strategy supports this approach. (In short, the FEMA strategy involves an expeditionary organization that is survivor-centric and enables disaster risk reduction nationally.)
  • Another highlighted public-private partnerships that already promote resilience across the country. It examined the long-term governance structure needed to increase resilience across cities, states and the nation and the correct balance necessary to engage with the public and private sectors.
  • Afternoon breakout sessions explored two-to-three specific questions centering on how to leverage R!SE across the nation to enhance disaster-sensitive investments and to enhance society’s resilience.

Here are five key takeaways:

  1. Transparency is critical, but it’s not always easy from a political perspective to communicate gaps in resilience.
  2. Increasing trust throughout the communication process – by measuring such issues as economic impact that matter to citizens – proves necessary to demonstrate to citizens and communities that resilience investment will benefit them and help cities win battles over other priorities.
  3. A shift has occurred over the past few years toward increasing transparency, perhaps reflecting the rise in the number of activities to actually help increase resilience, not just assess it. The aim: Base every decision on an understanding of resilience.
  4. Since “city leader” isn’t synonymous with government, arming corporate and nonprofit leaders with information to help them develop capacity to increase resilience allows governments to be more transparent about gaps that exist with their constituents.
  5. A key asset of the R!SE Initiative is the Disaster Resilience Scorecard for Cities, created by AECOM, the professional and technical services firm for infrastructure, and IBM for UNISDR. San Francisco has used the scorecard to inform capital asset decisions, which suggests that in the name of transparency, scorecard results should be made available to the public.

 

Oh, and given the similarities with R!SE, please watch this space as ND-GAIN transitions to a focus on urban adaptation issues in 2015.

Lunar New Year Predictions from the Climate Leadership Conference

At a session this week (2-23) organized by the Center for Climate and Energy Solutions at the Climate Leadership Conference, C2E Staff Scientist Joe Casola facilitated a discussion that asked the 60-plus corporate, nonprofit and government leaders attending to foresee 2035 and predict what business resilience will look like. The absorbing conversation was part of the session “Emerging Best Practices for Identifying Climate Risk and Increasing Resilience.” Other leaders were Rutgers Energy Institute’s Robert Kopp, fourtwentyseven’s Emilie Mazzacurati and Pacific Gas & Electric’s Christopher Benjamin.

Since we are in the midst of the Lunar New Year season, a great time for fortune telling, I thought you would enjoy the group’s top ideas:

Top Six:

  1. Supply-chain risk synonymous with climate risk, making supply-chain, climate-risk mitigation business as usual.
  2. A doubling of interest in small business and Main Street, aided by Chambers of Commerce that help build public/private partnerships to increase local government adaptation.
  3. Climate risk as a shared responsibility across corporate verticals, no longer an exclusive fit with offices of sustainability.
  4. Insurance priced accurately, providing a forcing function on business and land use decisions.
  5. Future cost projections of climate change incorporated into financial and economic estimates for all return-on-investment and strategic decisions.
  6. A generational change in which the leaders in 2035 naturally focus on the question of climate with their work, integrating resilience into their decision making (my favorite).

To these, let me add three of my own:

  • A realization that climate change harms the promise of the growing middle class in lower-income countries, sparking a redoubling of interest in investing in resilience in the global south.
  • A move away from recovery and toward prevention, facilitated in part by mature warning systems, advanced risk prediction and assessment methods that prove the ROI of resilience.
  • A solid pyramid of policies that stack atop each other and form the foundation of good governance. This allows corporations to make resilient business decisions throughout their value chains and to contribute to the good of the commons (worker-protection laws against heat distress, flood plain buffer requirements, landscape water-pricing requirements, etc.)

All of these will be better informed by an agreed-upon measurement of adaptation that rivals the elegant MTCO2E and provides an easy way for everyone to quantify their progress.

What do you think?

 

Emerging Global Risk: Failure to Adapt to Climate Change

While the world still smarts from years of global recession, experts now identify climate change risks as bigger threats to the stability of the world than economic ones.   The World Economic Forum’s Global Risk 2015 Report ranks failure to adapt to climate change 5th out of 28 risks in terms of potential negative impact on countries or industries, and 7th in terms of likelihood of occurrence within the next 10 years. The WEF defines failure to adapt to climate change as governments and businesses failing to enforce or enact effective measures to protect populations and to help businesses impacted by climate change to transition. Although warnings of potential environmental catastrophes have grown more persistent, few survey respondents see much progress in climate change adaptation and in mitigating other environmental risks. The ten WEF Global Risks Reports taken as a whole illustrate the rising likelihood of storms and cyclones, flooding, biodiversity loss, and climate change, and the escalating impacts of extreme weather events. This year, water crises, a risk predominantly dependent on climate dynamics, tops global risks impacts, putting it above spread of infectious diseases and weapons of mass destruction.

Drawing on the perspectives of 900 experts and global decision-makers, the annual report also provides a glimpse into other risks climate change could exacerbate if society fails to adequately adapt. These include water crises, food crises, and extreme weather events. Further, global trends of urbanization, environmental degradation, and weakening of international governance are linked to adaptation failure. These insights point to the need for greater leadership engagement to implement more robust measures for climate change adaptation.

Some crucial questions emerge for government, business, and civil society communities: How does climate change impact society, economics, geopolitics, and technology, and how should it be prioritized? How effective are current adaptation policies and practices? Which areas need special attention?

Building Global Health Resilience: Pursuits in Haiti and Bangladesh

ND-GAIN focuses on building resilience to climate change as a critical component to better prepare humans and their environment for the next 100 years.  Our mission lies in enhancing the world’s understanding of the importance of adaptation and of facilitating private and public investments in vulnerable communities. For the 2014 Annual Corporate Adaptation Prize, we received 20 applicants, either multinational corporations or local enterprises working on a project in a country ranked below 60 on the ND-GAIN index and collaborating with local partners. Applications are judged on their measurable adaptation impact, scalability and market impact. Here is a brief view of two projects our applicants are employing to improve human health in Haiti and Bangladesh:

Abbott, Partners in Health & the Abbott Fund

ABBOTT GIRLS USE

Source Abbott

Abbott has teamed with Partners in Health (PIH) and the Abbott Fund to alleviate malnutrition in Haiti’s Central Plateau—the country’s poorest region, which also is prone to severe and deadly natural disasters. Based on ND-GAIN data, Haiti is the 15th most vulnerable country and the 30th least ready country. The country’s score has trended upward over the past 10 years, from 41 in 2005 to its peak at 46 in 2010, but has dropped slightly to 45 after the 2010 earthquake.

Abbott infographic

Source Abbott 

The partnership has built and opened a new facility operated by Haitians to produce Nourimanba, PIH's free and life-giving treatment for severe malnutrition in children. The partnership's agricultural development program also is helping local farmers supply the facility with high-quality peanuts, while raising farmers’ incomes. Today, the facility concentrates on producing Nourimanba and is assessing options to produce fortified peanut butter that can be sold in Haiti. They seek to create a self-sustaining social enterprise that supports facility operations and helps drive local economic activity.

BASF Grameen Limited 

BASF tent

Source BASF

To date, the facility has produced more than 60,000 kgs of Nourimanba and has treated about 6,000 patients. It has more than 40 Haitians on staff, with additional staff hired as the plant expands. In 2014, the project hopes to increase farmers’ income by 300 percent. The partnership is working with non-profit TechnoServe to provide nearly 300 local farmers with tools such as financing for seeds, supplies, and services to increase quality, and yield by 33 percent. The Abbott Fund has provided more than $6.5 million in funding, and the facility is owned by PIH, which works together with its sister organization, Zanmi Lasante. Visit the Abbott Fund website to learn more, and view this 2012 New York Times article on the PIH website.

BASF Grameen Limited is improving human health by preventing the spread of mosquito-borne diseases in Bangladesh.  It has established a joint venture social business with Grameen Healthcare Trust, a nonprofit organization created by the Nobel Laureate Professor Muhammad Yunus, to help manufacture and distribute sturdy mosquito nets to vulnerable communities. The goal is to help the country achieve its UN Millennium Development Goals. Bangladesh has a gain score of 47.3 and has been steadily improving since 2005. The project hopes to further improve Bangladesh’s mortality index and external health dependency index.

With an initial investment from BASF of €200,000, the joint venture social business employs local community members in Bangladesh and sources from local suppliers where available.

The Interceptor mosquito net was the first product of this venture, which aims to reduce mosquito-borne disease, thus contributing to achieve key U.N Millennium Development Goals related to health. In 2011, BASF Grameen provided Interceptor nets to students from Dhaka University, the largest public institute in Bangladesh. Since then, BASF Grameen has constructed a plant within Bangladesh to make and distribute these nets to communities in need. According to the WHO, the protection provided by these nets against the mainly night-active vector mosquitoes is the most effective means of preventing malaria infections. The decrease in cases of malaria in Bangladesh by 70 percent over the past five years can be attributed, in large part, to the long-lasting insecticidal mosquito nets, which retain their protective properties for up to 20 washes, depending on local conditions.

Despite Bangladesh’s upward trend on the ND index, it maintains a high vulnerability and low readiness and needs investment and innovations to continue to improve. BASF Grameen Limited’s vision for the future is to scale up its operations within Bangladesh and also address similar issues in other vulnerable countries. Visit the Grameen Creative Lab and Yunus Social Business websites for more details and to learn about their other projects. This information was compiled with the help of Sophia Chau, Intern, ND-Global Adaptation

Corporate Adaptation Stories: Risky Business

With mid-term U.S. elections less than two months away, I have been scanning the news eagerly to locate any references to the significant Risky Business Project report on climate change released in June. I wondered if the report’s critical findings have stoked any passionate fires within any elected officials or their opponents. Alas, political contests this year don’t seem to rest on the future of our country – or any of its political districts – as far as the effects of climate change are concerned.

What a shame. Reflecting its remarkable array of leaders on its advisory board, Risky Business has a well-thought-out strategy: Engage influencers from both sides of the political aisle, inform them with potent data that illuminates how climate change is impacting key sectors of the U.S. economy, and then get them to prod their powerful networks to move on mitigating the effects of pollution and other environmental dangers.

When lawmakers grasp that message (if they ever do), then climate change will move to the front burners and, hopefully, lead to ways to counter the effects that Risky Business convincingly demonstrates already are impacting crime, food, health, infrastructure and other vital sectors.

The report notes that the project aims to highlight climate risks to specific business sectors and regions of the economy and to provide actionable data at a geographically granular level for decisionmakers. “Right now, cities and businesses are scrambling to adapt to a changing climate without sufficient federal government support, resulting in a virtual “unfunded mandate by omission” to deal with climate at the local level,” the report maintains. “We believe that American businesses should play an active role in helping the public sector determine how best to react to the risks and costs posed by climate change.”

Recently, the Columbia Journalism Review asked, “Has Climate Change become a business story?” It observed that The Wall Street Journal and the Financial Times published stories ahead of the report’s release. In addition, leading business publications, including Forbes, Fortune and the International Business Times, ran high-profile articles on their websites the day of the press conference.

Steven Mufson, an energy and finance reporter, wrote about it for The Washington Post, and the Los Angeles Times’ report ran in its Business section. Long-time National Public Radio economics correspondent John Ydstie covered the news and The New York Times was one of the few that covered the event as a science story.

But I’m looking for a different story – one from the corporations themselves – with business leaders talking about their own climate-risk adaptation stories, perhaps galvanized by this report,

In two weeks during New York City’s Climate Week, ND-GAIN will host an event, What’s New:  Corporations Leading Climate Resilience around the World, where corporate officials will relate their story by unveiling the latest innovations in adaptation.

Come meet the winners of ND-GAIN’s Corporate Adaptation Prize and join them and the judges for a lively discussion addressing food security, water access, health, and infrastructure solutions in the face of a changing global climate.

And, of course, kudos to Risky Business for getting the influencers to shape the biggest change crisis of our time.

 

Global Climate Resilience: Highlight Your Corporate Excellence

 

As corporations continue to leverage the important nexus between their humanitarian and environmental work through climate resilience projects in emerging economies, all should take note of the ND-GAIN Corporate Adaptation Prize. Past winners of the prize include PepsiCo, Ushahidi, Monsanto and Engineers Without Borders.

This year’s winners  – both multinational and local corporations working with nonprofits – will demonstrate meaningful impacts in an emerging economy that decrease vulnerabilities and increase readiness by enhancing food security, water and sanitation access, coastal protection, ecosystem services, human habitatsinfrastructure resiliency, or human health.

Project applications will be judged on their measurable adaptation impact, scalability (relative within their category — multinational or local corporations) and market impact.

The judges for this year’s prize will include retired Brig. Gen. Stephen Cheney, USMC, CEO, American Security Project; Loren Labovitch, director of finance, investment and trade, Millennium Challenge Corporation; Amy Luers, climate change director, Skoll Global Threats Fund; Jesus Madrazo, International Corporate Affairs Lead, Monsanto Company; Danielle Merfeld, global technology director, GE; Raj Rajan, RD&E vice president and global sustainability tech leader, Ecolab Inc.; and Carolyn Woo, chief executive officer and president, Catholic Relief Services.

The simple six question application is due in August and winners will be announced at an award’s event at Climate Week New York and to the media in September.

 

This blog was posted by  iain-patton and originally appeared on http://www.greenawards.com/blog/global-climate-resilience-highlight-your-corporate-excellence

Bridging the Climate Adaptation Gap: Relative Risks of Geographies in Supply Chains

This article originally appeared in Triple Pundit Bridging the Climate Adaptation Gap: Relative Risks of Geographies in Supply Chains

----
Editor’s note: This is the second post in an ongoing biweekly 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.
The ND-GAIN Matrix, which shows the evolution of vulnerability and readiness over the past 15 years. It allows deeper insights into country risk and opportunity. Add your countries to watch their evolution. (Click to enlarge)The ND-GAIN Matrix shows the evolution of vulnerability and readiness over the past 15 years. It allows deeper insights into country risk and opportunity. Add your countries to watch their evolution. (Click to enlarge) 

By Joyce Coffee

Previously, exploring the chasm between the need by corporations to adapt to climate change and the apparent absence of leadership to do so, I addressed a five-part plan for companies to become climate adaptation leaders.  Let’s delve into the first two, offering suggestions to ensure corporate resiliency in a climate-altered world.

Why does this matter? For the past several years, the CDP’s supply-chain survey has revealed that more than 70 percent of corporate respondents envisioned risks to their supply chain from climate disruption.  Indeed, these risks are appearing.  Thailand’s unprecedented 2011 flooding alone caused $20 billion in economic losses. Honda’s losses alone totaled more than $250 million when flood waters inundated an auto assembly plant. In another climate-related disruption in Mexico, General Motors calculated that a one-month disruption at one of its production facilities there hard hit by drought could spark a $27 million loss in profits.

The secret involves knowing first where your supply chain starts. That’s another kind of gap for many corporations–and one that myriad sustainability surveys and shareholder proxy fights face.  But let’s presume that, like a majority of global corporations, you are getting a handle on your supply-chain geography to examine both risks and opportunities for your bottom line.

That’s the first step of addressing your climate adaptation gap:  Examine the relative risks of geographies in your supply chains.

Many tools are available for corporate and development decision makers to help plan and devise their business strategies. Corporate leaders tell me they use the Consumer Confidence IndexCorruption Perceptions Index and Human Development Index, among other well-regarded tools, to help relay complex information quickly to their boards of directors and C-suite peers.

Some global corporations maintain tools themselves. MWH Global, an early employer of mine and a leader in hydropower development worldwide, including in the least-developed countries, developed an internal risk-management schema that helped it consider the hardship to employees working in less-stable countries.

The ND-Global Adaptation Index, or ND-GAIN, is another business barometer that provides quick insights into a country’s climate vulnerability and readiness to adapt.  And since risk experts rank climate change among the principal threats to business, the tool serves as a timely resource for strategic planning.

Free and open-source, ND-GAIN illuminates the countries best prepared to deal with global changes sparked by overcrowding, resource constraints and climate disruption.  This index uses 17 years of data to rank over 175 countries annually against 50 variables, based on how vulnerable they are to droughts, super-storms and other natural disasters and, uniquely, how ready they are to employ adaptation solutions.

Click this photo to check out the vulnerability/readiness matrix and compare countriesClick this photo to check out the vulnerability/readiness matrix and compare countries. 

To generate actionable information about country-level vulnerabilities from climate change and the readiness of countries to absorb and use new investments, you can examine a cross-section of the data most germane to your supply chain by looking at three things:

  • The ND-GAIN ranking (pictured right and above), which orders every country by aggregating all measured factors into a single score. It allows a quick look at combined vulnerability and readiness. View the full rankings to find your countries within the index and compare their ND-GAIN ranking with one another.

Using ND-GAIN’s Matrix, you can draw lessons from existing disruptions to your supply chain due to extreme events or predict future problems.  Assessing the realities of climate change on your supply chain, you can look at the relative vulnerability by country of origin of your major suppliers – Taking, for instance, four countries important for the auto industry: 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.)

ND-GAIN's assessment of the Philippines. Click to enlarge. ND-GAIN’s assessment of the Philippines. Click to enlarge. 

  • The ND-GAIN Country Profiles (pictured right) provide all of the data and their sources, organized by specific vulnerability and readiness measures such as water availability, food security and education level.  These country profiles for the 175 countries in the index help you to identify relevant vulnerabilities in geographies where you maintain significant human and capital assets.

What’s vital about these country profiles is that they give the private sector the means to gauge adaptation-related opportunities and risks in developing countries. With this ability, the private sector can address the critical needs of vulnerable populations (and identify new markets well-suited to their business model, products or services and investment-risk profiles).

The profiles also help policymakers identify the easiest-to-achieve avenues – that proverbial low-hanging fruit – for improving rapidly a country’s investment attractiveness to the private sector as well as to motivate and create incentives to employ the best public policies.

Graphics courtesy of the ND-Global Adaptation Index

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 3. The series will deep-dive into the complicated look at supply chain risk assessment. Next up: “Relevant Vulnerabilities in Geographies”. Portions of this article first appeared on http://climageadaptationexchange.com.

 

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.

 

Climate change a growing concern for companies expanding their footprint

This article originally appeared in The Guardian: http://www.theguardian.com/sustainable-business/hubs-water-climate-change-siting-drought-flood-business Traditionally, the most important factors in choosing a location for a new factory or operation have always been workforce supply and economic incentives. But a new consideration, climate change, is quickly moving up the ranks as a major factor for corporate decision-makers. Recently, as climate-related crises have hit cities across the globe, it's become increasingly clear that companies need to consider the financial impact of a paucity – or an excess – of water.

Operational, strategic and quality-of-life issues factor heavily in the decisions that giant enterprises make about where to locate their much sought after capital projects. As the devastating environmental conditions associated with climate change – including water shortages, severe storms, natural disasters, rising seas and hotter climates – become more pressing, it's clear that these, too, will become key considerations for companies hoping to press their competitive advantages.

As a result, these decisions will begin to dramatically affect both traditional and emerging business, transportation, manufacturing and travel hubs. And as with anything else involving corporations, real estate, jobs and money, there will definitely be winners and losers.

Supply chain links

In the wake of natural disasters, which appear to be getting increasingly severe, a "new normal" has emerged among corporate decision-makers. With some analysts citing the impact of the mutable climate, more companies are adding a climate-change dimension to their strategic supply-chain planning and site selection. Adaptive management of climate risks is playing a growing role in boardrooms and C-suites across the globe, particularly at multinationals.

A report from CDP, the global non-profit that measures vital environmental information, found that 72% of companies surveyed see physical risks from climate change disrupting their supply chain.

For New Orleans-based energy company Entergy, 2005's Hurricane Katrina was a lesson in the potential supply disruptions that could be caused by increasingly extreme weather events. Since then, Entergy has begun incorporating climate risks into its business planning and operating activities; consequently, it has strengthened its power-distribution network, including the sites that are most vulnerable.

Water, water nowhere

Companies often underestimate the importance of water to their business, and few have a comprehensive global process to assess water risk. But this is quickly changing, notably in the west and southwest regions of the US, as drought sinks critical water supplies. Companies in the food and beverage, mining and oil and gas companies sectors especially base their site assessments on high-level projections of water scarcity.

In 2013, the Aqueduct Project, a hydrological mapping initiative at the World Resources Institute, ranked 36 countries based on their water risk. Sixteen, including the UAE, Barbados, Cyprus, Jamaica and Singapore, received a 5.0, the worst possible rating.

But if drought is a consideration, so is flooding, and too much water can also affect site selection. After Thailand's extensive flooding in 2011, losses for badly damaged global parts suppliers alone totaled an estimated $15-20bn, and the flood hurt the bottom line of several multinationals, including Ford, Toyota, Dell, Cisco and Honda. HP, another company that was especially hard-hit, estimated that half of its 7% fourth-quarter 2011 revenue slide was due to the flooding. Not surprisingly, global companies are increasingly assessing the issue of monsoons and other water-related weather events when making decisions about where to locate or enlarge their facilities.

As for the US, it won't be long before severe water-supply problems in states like California and Arizona will begin to affect their popularity as site locations for plants. And look for other states as well as cities with plentiful supplies, such as those surrounding the Great Lakes, to woo businesses with water as their big asset. Already, Milwaukee is leveraging the business potential of its plentiful water supply. It's certainly not alone.

Site selection heats up

Water isn't the only climate issue that is increasingly affecting site selection. Too much heat is also becoming a factor as it becomes clear that fiery temperatures and air pollution can have a major, devastating effect on workplaces and workforces. Air-conditioning alone can't make up for such conditions.

A team of climate-change researchers recently studied 170m hospital admissions and eight million deaths in Germany. After tracking them season by season, day by day, for 10 years, they found that the temperature-and-pollution spikes associated with extreme heat events tended to increase hospital admissions and deaths by 2% to 5% the first day. Adverse health effects and mortality mounted with each day of a heat wave.

Interestingly, the analysis found that extreme cold events typically had a negligible to nonexistent impact on hospitalization and deaths. Distributed across the population of a country such as Germany or the US, the analysis estimates that the cost of a hot day is between 10 cents and 68 cents per resident in terms of health care and lost productivity.

Winners and losers

So, when it comes to site selection and climate, which countries top the list? The Notre Dame Global Adaptation Index (ND-GAIN), where I work, has ranked the climate adaptation performance of 177 countries over the last 17 years, has found that, while the top-ranked countries are often prone to sea level rise, drought and flooding, they are nonetheless able to maintain the security of their water, food, and health systems. They are able to preserve their fundamental ecosystems, and their coastal, energy and transportation infrastructures remain sound, enabling greater social, economic and governmental stability.

The ND-GAIN's highest-ranked country is Denmark, which has an index score of 83.4. Other European countries and Australia round out the top 10, while the US ranks 13th, with a score of 79.

North Korea is the lowest-ranked country, with an index of 34.3, and Afghanistan, Burundi, the Central African Republic and Eritrea fill out the bottom five on the list of countries that aren't likely to draw many foreign industrial and business operations any time soon.

The most surprising low-ranked countries are India, which is number 120, and China, which is number 98. But as two of the hottest spots for global business in the last decade, both demonstrate the impact that corporate investment can have on resiliency. India has moved up 10 points on the relative ranking since 1999, and China has moved between three and six spots during that period.

In real-estate parlance, the desirability of a property is based on location, location, location. And while climate change may still rank below such factors as workforce and incentives, more and more organizations are weighing climate conditions as they determine where they will locate new operations.

Consequently, cities, states and countries that lag on the climate-change index need to launch initiatives, such as public-private partnerships, to strengthen their attractiveness. The private sector, of course, can play an invaluable role in this effort.

This article originally appeared in The Guardian: http://www.theguardian.com/sustainable-business/hubs-water-climate-change-siting-drought-flood-business.

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).

Expert View: Five Issues that Promise to Heighten National Security Risks in a Changing Climate

At last month’s ND-GAIN annual meeting, Brigadier General (USMC RET) Stephen Cheney, the American Security Project’s CEO, laid it on the line.  For the military and for the world, climate change risk is real and grows every day.  And the military knows from experience that waiting for certainty on future predictions can prove disastrous. Reflecting on climate impacts with national security significance, a panel spelled out five repercussions of a changing climate.  Cheney himself laid out four risks:

  1. Sea level rise in Asia will displace millions of people.  In Bangladesh alone, more than one million of its 160 million people will need to relocate. Relocations cause tensions that historically have erupted into civil conflict in which the U.S. military has responded..

  2. Forest fires, such as the one in Russia that elevated wheat prices and perhaps sowed the seeds of the Arab Spring in the Middle East, will put more natural resources at risk, causing scarcity-driven conflicts. (In an earlier post, I noted that the U.S. Defense Department estimates that 6,000 square kilometers of African land for agriculture – roughly the size of the West Bank and Gaza[1]will disappear by 2060 so the bargain over food resources will worsen.)
  3. Extreme weather events, such as Super Typhoon Haiyan that ravaged the Philippines will require military response for humanitarian aid.
  4. Arctic ice melt will trigger a tussle over territory, leading to conflict between the nations that claim ownership.

The fifth effect of a changing climate with national security implications was offered by Marcus King, associate professor of George Washington University’s The Elliott School of International Affairs. His was a promising trend – that water scarcity has fostered more incidents of cooperation than conflict.  For instance, he mentioned the agreement by Jordan, Israel and the Palestine Authority to rejuvenate the Dead Sea.

He noted that the Pentagon refers to climate change as an instability accelerant, and cited projections from the Intergovernmental Panel on Climate Change and others that by 2030, global demand for water will exceed the water supply by 40 percent.  Already, in the tinder box of the Middle East, water trends are alarming.  In Syria, 800,000 farmers were forced to move to cities because of a two-year drought and, in Yemeni, aquifers could be depleted by 2020.  For Egypt, which relies on neighboring countries for all of its fresh water, conflicts driven by water could erupt as Egypt’s neighbors consider building dams for their energy security.

As Roger-Mark De Souza, director of the Wilson Center of Population, Environment, Security and Social Change foretold, with 1.5 billion, or more than one-in-five, people worldwide living in conflict or post-conflict areas, climate vulnerability will worsen crises.


[1] Approximately 6,020 square kilometers, The World Bank

 

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