Category: Business & Private Sector

Popular consumer goods like fashion & coffee at risk from climate impacts

Popular consumer goods like fashion & coffee at risk from climate impacts

By Elisa Jiménez Alonso

Climate change is increasingly having an impact on our daily lives. While many might think of the impacts in terms of extreme and sudden weather events, many problems are creeping up on our society. Such is the issue with many popular consumer goods. We are used to seeing densely stocked shopping aisles full of food, beverages, clothing and much more. But without adaptation measures from the private sector, the landscape of consumer goods as we know it might change very quickly. In a recent episode of the “Material World” podcast, hosts Jenny Kaplan and Lindsey Rupp explore how climate change might affect the consumer universe and what that means for popular products.

Going to the supermarket and buying groceries feels very removed from the actual food production. Shelves are always stocked, and if a consumer in the UK wants to buy an avocado in January, they will easily find one. Agriculture and food production are very complicated because they create globally traded goods and shortages in one country can potentially have knock on effects all over the world.

That is also the case for coffee. Illy Caffé CEO Andrea Illy explains that in the short term, as global temperatures begin to rise, the areas where coffee can be grown will expand. This can be seen in California where coffee production is on the rise. In the long term, however, the total area suitable for coffee production will significantly decrease. Illy estimates that about 50% of suitable areas today will not be able to produce coffee by the end of the century. In some traditionally coffee producing countries stagnating yields and decreasing quality can already be observed today. Adaptation actions are necessary today to reduce the negative impacts as much as possible. Andrea Illy recommends three broad areas of action: adapting agricultural practices, diversifying cultivated plants, and migrating plantations to more suitable areas. These will require enormous resources in terms of investments, knowledge, infrastructure, and people.

Cotton is another plant that is sensitive to a changing climate. While increased CO2 concentrations in the atmosphere boost cotton’s growth, the growth boost also leads to increasing water and nutrient needs. With rising temperatures and changing rainfall patterns, water availability is set to fall in many regions. The devastating 2011 drought alone led to the abandonment of 55% of Texas’ cotton fields and an estimated loss of US$2.2 billion. Major fashion companies like H&M are starting to look into changing how they source cotton and other textiles. With all signs pointing towards a significant reduction of global cotton production, H&M have pledged to use 100% sustainably sourced or recycled materials by 2030, in 2016 the share was 26%.

While the private sector’s efforts to adapt to climate change are absolutely crucial for global resilience building, governments also have an important role to play. In the first half of the 20th century, the US experienced a devastating drought that led and unsustainable farming practices led to the so called “Dust Bowl” in the Great Plains. The government then rolled out massive efforts to conserve soil and restore destroyed lands. One such effort consisted of planting a huge belt of 200 million trees from the Canadian border to central Texas. Without interventions and support from the public and private sectors, adaptation efforts and climate resilience building will only be partially successful.


Cover photo by Kimberly Vardeman (CC BY 2.0).
How business can help build climate resilience today

How business can help build climate resilience today

By Eileen Gallagher, Manager at BSR

Around the world, we are experiencing record-breaking extreme weather events—from monsoon flooding in South Asia, to Hurricanes Harvey and Irma the United States and Caribbean islands, severe flooding in Nigeria, and Typhoon Hato here in Hong Kong and southern China. The loss of life, displacement, and financial damage are devastating.

While seasonal storms are nothing new, climate change is expected to make them more powerful. Warmer temperatures elicit more rainfall, and storm surge is worsened by sea-level rise. When combined with, in some cases, poor urban planning, existing socioeconomic vulnerabilities, and lack of preparation, these stronger storms can cause significant damage.

The recent and ongoing events illustrate for many of us the very real impacts of climate change. This begs the question: are those of us who work in or for the private sector doing everything we can to prepare for and build resilience to future weather- and climate-related impacts?

The private sector faces a range of climate risks that can affect overarching strategies, finances, human resources, and sales. And businesses are exposed to these risks throughout their operations, supply chains, and communities where they work. Companies rely on suppliers and communities around the world for both human and natural capital including land, water, and a consistent energy supply, among other critical resources. Simply put, the range of impacts from climate change can directly affect business continuity.

Catastrophic weather events or natural disasters can serve as “trigger events”—prompting (rightfully) an uptick in support from governments, businesses, and communities to aid relief and recovery efforts and “build back better” homes, schools, and roadways. But preparation can dramatically reduce the cost of recovery—studies show that for every US$1 spent to mitigate risks, US$4 is saved on recovery costs. We are not seeing the same level of investment or urgency to proactively prepare for extreme weather events and build climate resilience as we see for recovery.

As Alice Hill of U.S. President Obama’s National Security Council recently lamented, it took eight years and the destruction of Hurricane Sandy to agree on federal building standards to protect against floods. Despite this, President Trump revoked the flood protection rule 10 days before Harvey made landfall.

While “trigger events” can drive us to act, the implications of climate change for business go beyond extreme weather. Gradual, slow-onset climate events—sea-level rise, increasing temperatures, ocean acidification, glacial retreat and related impacts, salinization, land and forest degradation, loss of biodiversity, and desertification—are also affecting business in myriad ways.

For example, salinization, brought on by sea-level rise, is shrinking rice yields in Vietnam, Bangladesh, and other major rice-producing markets, which in turn affects global commodity supply chains and threatens food security. Salinity can also cause structural damage to buildings, equipment, and roads, which can impact the production and transport of goods and services.

To build their resilience to salinization, businesses can protect or install a combination of green and gray infrastructure: wetlands and forests act as natural barriers, and drainage systems and subsurface barriers can stop the flow of contaminants. In the agriculture industry, farmers can diversify crops and livelihoods to help maintain or build financial security; investments in new research could help uncover alternative solutions such as salt-tolerant crops.

Given that we’re experiencing the impacts of climate change today, it’s important that we invest in climate resilience. Here are three ways businesses can start building their adaptive capacities:

  1. Assess and disclose climate risk: In addition to assessing both gradual and sudden climate hazards, businesses should take inventory of their exposure and vulnerability throughout their operations, supply chains, and communities. Poor infrastructure and communication channels, existing labor issues, low-income communities, and social injustices are a few examples of vulnerabilities that can exacerbate climate risk. Disclosing risks can help companies generate awareness of issues, facilitate goal-setting for risk mitigation, and identify opportunities to collaboratively address challenges.
  2. Leverage expertise: Businesses should consider leveraging their knowledge and skills to build resilience throughout their value chains. For example, real estate developers can partner with city planners to solve for local vulnerabilities, such as planting trees to provide shade in hot environments and investing in safe and secure infrastructure like permeable pavers to reduce flooding.
  3. Empower individuals: Companies can up-level their civic engagement by empowering individuals to build personal resilience to climate change. For example, information and communications technology and financial services companies can collaborate with local governments to expand access to information and insurance for at-risk populations, including women, people with disabilities, the elderly, poor, homeless, and outdoor workers, among others.

As affected communities assess the damage brought on by the recent extreme weather events and work together to heal and recover, let’s take action within the businesses where we work. Let’s ask ourselves how we can make sure our companies and our communities are prepared.

With thoughtful, proactive, and collaborative efforts, we can build the resilience that’s essential for today’s climate reality. Learn more and get your business involved on our climate change page.


This article was originally published on BSR.org and is shared with kind permission. Read the original article here.
Cover photo by Oskari Kettunen (CC BY 2.0).
Is global climate change good for business?

Is global climate change good for business?

By Steve Wilson

In addition to increasing temperatures and rising sea levels, global climate change represents a complex exercise for the great majority of businesses, which must frame the meaning, the costs, and the business and investment opportunities associated with this ongoing phenomenon.

For a large number of companies, action on climate change is embedded in some version of a “sustainability” or “green business” program aimed at improving environmental and business performance. These initiatives are typically focused on mitigation, or the reduction of greenhouse-gas emissions, rather than on building climate resilience in the face of risks such as cyclonic winds, heat waves, flooding and storm surge, and drought. The most effective of these sustainability programs, by whatever name, manage to reduce emissions and lower the environmental footprint of companies and their supply chains, by using renewable energies such as solar and wind power, improved energy and water efficiency, recycling, and reducing waste of all types. Companies that use these programs are viewed as responsible environmental stewards, and at the same time, reap the benefits of process efficiency and lowering their costs, as illustrated in the 2013 book, Eco-Business: A Big-Brand Takeover of Sustainability.

From Sustainability to Climate Resilience

The drive for sustainability will continue to generate opportunities in renewable energy, energy-efficient technologies, and other products that help lower emissions and waste.  But the market potential in climate resilience is far larger.

After all, climate risks pose an increasing threat to business continuity, private and public property, supply chains, human health, and critical infrastructure. As I noted in a previous post, these risks drive the demand for a wide and growing range of products and services that help buyers better manage their vulnerability to climate risks: from climate-resistant seeds, to financial and insurance products that encourage resilience. In effect, the private sector is already in the business of climate resilience—although companies do not account for this business using climate-related terminology.

A First Inquiry into the Market for Climate Resilience

A new study attempts to shed some light on the growing market opportunity posed by climate resilience. The inquiry, by the Global Climate Adaptation Partnership  in the United Kingdom and Grupo Laera in Colombia, will assess the markets for climate-resilience solutions in two sectors, agriculture and transportation, in three emerging markets: Colombia, South Africa, and the Philippines. These solutions are in the form of many types of products and services that help buyer better manage their exposure to climate risks, and they also include emerging investment models and public-private partnerships that help to reduce climate vulnerability.

The agricultural sector is recognized everywhere as the most vulnerable to climate risks. This pioneering study, expected to be completed in 2017, will examine the market for climate-resilient solutions in high-value agricultural commodity chains, including coffee, cacao, wine, rice, and maize. These commodities are important to the exports of each country, and generate the demand for climate-resilient solutions in local economies. These solutions include water-efficient technologies, drought-resistant seeds, applied climate and weather analytics, and new types of financial and insurance contracts.

In the case of transportation, the public and private sectors are closely related and the industry is likely to incur very high costs to achieve climate resilience. However, with trillions of dollars set to be spent on infrastructure worldwide in the next 10 years, there is a clear opportunity for resilience investments in the short term that save money during the lifetimes of the projects. Roads are the backbone of all agricultural supply chains, and crucial for many other sectors, such as tourism. Coastal infrastructure, including ports, adds a long-term dimension to the new study, with the prospect of stranded assets affecting company balance sheets and risk ratings. Both roads and ports are crucial for national and international trade, and their need for long-term, large up-front cost investments sometimes is met by public-private partnerships.

Lessons derived from this new study can applied to other sectors and geographies and make an important contribution to a rapidly growing market that remains largely hidden in plain sight.

This study will join a growing list of inquiries into private challenges and opportunities in climate resilience. For example, the recent report “Bridging the Adaptation Gap,” by the Global Adaptation and Resilience Investment roundtable, highlights the major challenges facing private-sector investment in climate-resilience projects, and outlines a menu of actions for facilitating the flow of private capital toward the global need for greater resilience.


Steven R. Wilson manages projects related to climate change adaptation and resilience for the Multilateral Investment Fund. He recently co-created PROADAPT, a $12 million facility that helps build climate resilience in the private sector in Latin America and the Caribbean.
This article originally appeared on FOMIN.orgread the original article by clicking here.
Cover photo by Daniel Parks (CC by NC 2.0)
Collaborative effort of European financing institutions to help improve implementation of climate change adaptation

Collaborative effort of European financing institutions to help improve implementation of climate change adaptation

By Craig Davies, Associate Director, Head Climate Change Adaptation, EBRD

When the Paris Agreement on climate change was adopted in December 2015, it included a long-term goal for the adaptation to climate change – “enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change, with a view to contributing to sustainable development […]”. It recognised the direct link of climate change adaptation to sustainable development and further highlighted its importance. This added momentum to an increasing need for practical approaches for climate change adaptation, which can range from making transport infrastructure more resilient to storms and floods, to helping small businesses adapt to increasing water scarcity.

The demand and importance of integrating climate-resilient solutions into project development has also grown and become more visible for EBRD. Already since 2009, the Bank has collaborated with other European financing institutions on the issue under the umbrella of the European Financing Institutions Working Group on Adaptation to Climate Change (EUFIWACC). Following a jointly-organised consultant day in June 2015, where emerging experiences and future needs for expertise in the field of climate change adaptation were discussed, the Group agreed that in order to be able to further scale up activities in the area, there was a need for the development of practical and structured approaches. The Group agreed to capture the emerging experience of its experts to provide insights into how climate issues can be best integrated into project development and implementation.

“Making long-term investments more resilient to the impacts of climate change is a major challenge for investors” said Terry McCallion, Director for Energy Efficiency and Climate Change at the EBRD. “At the EBRD, we have developed approaches that integrate climate change adaptation into our investment operations. Working with partner organisations to share experience and knowledge will build momentum towards larger volumes of effective adaptation finance”. Since 2011, EBRD has invested more than €790 million of adaptation finance in over 120 projects.

Through several rounds of workshops and reviews that also included technical experts from an advisory group of consultancies, a note summarising the groups’ experience – titled “Integrating Climate Change Information and Adaptation in Project Development: Emerging Experience from Practitioners”– has been prepared in order to help practitioners assess climate change risks and vulnerabilities and integrate adaptation measures into project planning, design and implementation. The measures can include structural and non-structural components. The note’s overall aim is to help make projects and investments more resilient to the effects of climate change and to implement adaptation measures reinforcing the climate resilience of goods, people, economies and territories of the beneficiaries.

For the Group, the publication of the first version of the note is a milestone to build on and it sees the note as a continuous learning process that will evolve and benefit from future experience and developments in the field.


Download the full report by clicking here.

The EUFIWACC group comprises the French Development Agency (AFD), the Council of Europe Development Bank (CEB), the European Bank for Reconstruction and Development (EBRD), the European Commission’s Directorate-General for Climate Action (DG CLIMA), the European Investment Bank (EIB), KfW Development Bank (KFW), and the Nordic Investment Bank (NIB).

The note further benefited from the technical expertise of experts from the JASPERS partnership (Joint Assistance to Support Projects in European Regions) and the Climate Service Center Germany (GERICS), as well as an advisory group of consultancies, consisting of the following firms: Acclimatise, Agrer, Atkins, Baastel, CES Consulting Engineers Salzgitter GmbH, Climpact-Metnext, CrissCross Consulting, D’Appolonia, Eco Ltd., ENVIRON, Factor CO2, GOPA mbH, Green Partners, Guiran Consulting, Kommunalkredit Public Consulting, Luxconsult S.A., Mott MacDonald, Perspectives, Pöyry, Royal Haskoning DHV, Safege, SIA srl, Sofreco, Suez Environnement Consulting, Sweco, TA Consult Partners Ltd., and WSP Parsons Brinkerhoff.

This article was originally posted on climate-l.iisd.org

Cover photo: Pixabay.
Acclimatise authors important report on UK private sector resilience & market opportunities for climate products & services

Acclimatise authors important report on UK private sector resilience & market opportunities for climate products & services

By Elisa Jiménez Alonso and Will Bugler

Climate change presents UK businesses with opportunities as well as risks, according to a new report commissioned by the Environment Agency and produced by Acclimatise.

The report combines evidence from Carbon Disclosure Project (CDP) surveys of UK firms with new insights from a series of interviews with leading UK businesses.

Risky business

When it comes to climate risks the vast majority (86%) of the companies have already identified one or more climate-related risks to their businesses. This apparently high-level of awareness is, however, not matched when it comes to taking action to adapt.

Many of the identified risks (34%) are being managed through low-cost, “business-as-usual” approaches. The report also shows that 44% of companies do not know the financial costs of climate impacts. This suggests that far more needs to be done for UK businesses to understand the most cost-effective adaptation options.

The report also highlights the types of climate risks that UK businesses are currently aware of. Companies were more likely to identify direct climate risks (climate impacts directly affecting business operations) than indirect risks, such as reputational impact, and risks to employee retention.

With companies reporting that over a third of identified climate risks (36%) have a ‘high cost’ to their operations it is imperative that more action is taken to increase the resilience of business operations along the entire value chain.

Climate opportunities

The study also shows that UK businesses see market opportunities from climate change adaptation. Respondents identified 1 opportunity for every 3 risks from climate change and its impacts. Emphasising the importance of taking early action to adapt to climate change, 33% of identified opportunities are expected to arise within 3 years.

The landscape of climate opportunities identified by UK businesses is also markedly different from that of climate risks. Where climate risks were identified in a wide variety of sectors and right along companies’ value chain, around 2 thirds (62%) of the market opportunities relate in increased demand for existing and new products and services.

As the report shows, UK businesses are already exploring opportunities that might arise from planning for climate change. The range of potential benefits goes from effectively protecting vital assets, to maintaining business continuity and gaining competitive advantages.

Finally, the world-class expertise of the UK in this field is evident in sectors such as manufacturing, finance and insurance, environmental and engineering consultancy, and construction. These sectors are already exporting globally products and services to help clients manage climate change impacts. Demand for these products and services will continue to grow, the report concludes.


The full report is available for download by clicking here.

Cover photo by Rob Bye on Unsplash