Climate Action 2011-2012
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CA<strong>2011</strong> GlobalCompact_1.pdf<br />
Business and Adaptation<br />
the road to rio<br />
Brazil’s list of endangered animals is nearly three times as<br />
long as the last list 20 years ago. The Jaguar is one of these.<br />
© Silvio Tanaka<br />
Building corporate<br />
commitment to adaptation<br />
By Georg Kell, Executive Director, United Nations<br />
Global Compact<br />
More than perhaps any other global challenge, climate<br />
change is impacting business around the world – directly<br />
and indirectly. Already, changing climate hinders and<br />
complicates economic development, disrupts food and<br />
water supplies, and threatens peace, stability and social<br />
cohesion. Much of the debate so far has focused on the<br />
necessary commitments and efforts to reduce global<br />
greenhouse gas emissions. But it has become increasingly<br />
clear that companies must equally build climate resilience<br />
and develop adaptation strategies that counter current<br />
and future impacts caused by climate change. This<br />
is particularly relevant in developing and emerging<br />
countries, where the contrasts between ambitious<br />
long-term growth projections and extreme climate<br />
vulnerability could not be any greater.<br />
Rising seawater levels, loss of biodiversity, water shortages<br />
and flooding are just some of the direct climate impacts<br />
disrupting markets and societies everywhere. From here, it<br />
is not hard to imagine dramatic, yet no less realistic socioeconomic<br />
impacts, ranging from widespread poverty to civil<br />
unrest, armed conflict and even failing states. Thankfully,<br />
many companies are already confronting the costs of these<br />
impacts. However, comprehensive strategic responses<br />
remain an exception, and too many businesses continue to<br />
sit on the fence.<br />
Even as an increasing number of companies acknowledge<br />
being directly affected by physical or market impacts of<br />
climate change, few have learned to assess material climate<br />
risks and seize opportunities which would ultimately not<br />
only avert disaster and avoid costs, but build and strengthen<br />
competitive advantage.<br />
Sector-wide reSponSeS<br />
On the positive side, some sectors have been far more<br />
proactive in recognising and acting upon the need for<br />
adaptation than others. Quite understandably, the insurance<br />
sector has taken a leading role. German insurer Allianz puts<br />
the industry’s worldwide losses linked to climate change<br />
at a staggering US$41 billion per year between 2010 and<br />
2019, and European insurers in particular have early on<br />
taken the initiative to recognise and address climate change<br />
as a material challenge to their long-term viability. Munich<br />
Re, a German-based global reinsurer, launched its Munich<br />
<strong>Climate</strong> Insurance Initiative as early as 2005 to support<br />
developing countries’ adaptation efforts through innovative<br />
risk-management tools.<br />
Nevertheless, the business-wide response does not<br />
adequately reflect the massive scale of the challenge. Neither<br />
has business done enough to identify opportunities resulting<br />
from climate change, such as gauging demand for new<br />
185 climateactionprogramme.org