Climate Action 2011-2012

CA2011 GlobalCompact_1.pdf
Business and Adaptation
the road to rio
Brazil’s list of endangered animals is nearly three times as
long as the last list 20 years ago. The Jaguar is one of these.
© Silvio Tanaka
Building corporate
commitment to adaptation
By Georg Kell, Executive Director, United Nations
Global Compact
More than perhaps any other global challenge, climate
change is impacting business around the world – directly
and indirectly. Already, changing climate hinders and
complicates economic development, disrupts food and
water supplies, and threatens peace, stability and social
cohesion. Much of the debate so far has focused on the
necessary commitments and efforts to reduce global
greenhouse gas emissions. But it has become increasingly
clear that companies must equally build climate resilience
and develop adaptation strategies that counter current
and future impacts caused by climate change. This
is particularly relevant in developing and emerging
countries, where the contrasts between ambitious
long-term growth projections and extreme climate
vulnerability could not be any greater.
Rising seawater levels, loss of biodiversity, water shortages
and flooding are just some of the direct climate impacts
disrupting markets and societies everywhere. From here, it
is not hard to imagine dramatic, yet no less realistic socioeconomic
impacts, ranging from widespread poverty to civil
unrest, armed conflict and even failing states. Thankfully,
many companies are already confronting the costs of these
impacts. However, comprehensive strategic responses
remain an exception, and too many businesses continue to
sit on the fence.
Even as an increasing number of companies acknowledge
being directly affected by physical or market impacts of
climate change, few have learned to assess material climate
risks and seize opportunities which would ultimately not
only avert disaster and avoid costs, but build and strengthen
competitive advantage.
Sector-wide reSponSeS
On the positive side, some sectors have been far more
proactive in recognising and acting upon the need for
adaptation than others. Quite understandably, the insurance
sector has taken a leading role. German insurer Allianz puts
the industry’s worldwide losses linked to climate change
at a staggering US$41 billion per year between 2010 and
2019, and European insurers in particular have early on
taken the initiative to recognise and address climate change
as a material challenge to their long-term viability. Munich
Re, a German-based global reinsurer, launched its Munich
Climate Insurance Initiative as early as 2005 to support
developing countries’ adaptation efforts through innovative
risk-management tools.
Nevertheless, the business-wide response does not
adequately reflect the massive scale of the challenge. Neither
has business done enough to identify opportunities resulting
from climate change, such as gauging demand for new
185 climateactionprogramme.org