Category: Knowledge Library

Stay or go? People under climate pressure must be able to choose

Stay or go? People under climate pressure must be able to choose

By Jan Kellet, UNDP

Millions on the move, and many more millions likely to move – and our changing climate is the cause. This is not an unusual narrative, whether seen in news and views, or predictions of future movement from the advocacy community.

But the evidence of direct causality is not so clear, and in a report ODI and UNDP have just released, we try unpick the facts of climate change and human mobility – asking what we do know and what we don’t.  It is time to move beyond the rhetoric.

What we do know

We are a mobile species, of that there is no doubt – 244 million people live outside their birth country, and 740 million are displaced or have moved within their country.  There are 157 million international migrants living in G20 countries, representing 3 percent of the population.

Evidence reveals that most cross-border migrants stay local, in their region. Beyond this we have insights into how movement is quite particular.

For example, Pakistani men are 11 times more likely to migrate during heatweaves than heavy rainfall because excessive heat has a heavier impact on income. And in India, increasingly erratic rains can push families to move, women doing so for up to three months, locally, and men for a year and more, and much further away.

We also know that sudden-onset climate hazards (storms, typhoons, extreme heat, flooding) displace millions – in 2016, 24 million, 32 times more than those displaced by earthquakes and tsunamis, and three times as many of those fleeing conflict.

And we know that between 2008 and 2016, sudden-onset events were responsible for 99 percent of internal displacement: an average of 21 million people annually. The events with the greatest impact are almost always flooding, such as in 2016, when all 10 of the largest disaster displacement events were from floods or storms.

So we know lots of people move, most often within their region as a matter of choice, while millions are forced to move, usually by flooding, and that patterns of movement can be discerned within particular geographies and hazards.

What we don’t quite know

It gets much more difficult from here.

Those hazards that creep up – drought, desertification, ocean acidification, salinisation, glacial retreat and sea-level rise – are much more difficult to track when it comes to their impact on human mobility. This is because with these – even with things you can visibly see over time, such as rising-sea levels – why people move may not actually be because of that sea-level rise, but attributable to many other factors.

These factors – political, social, economic, environmental, cultural – are part and parcel of people’s lives, and just as critical to why they may move or not.

Perhaps the education system is good enough to remain in an area where desertification is affecting your crops. Perhaps you take great stock in the cultural and familial connections of your home town, meaning you simply put up with seasonal flooding. Perhaps promised infrastructure, such as sea walls and other coastal protection, is year on year being postponed.

When people do move, they balance all these factors with the context of where they are going, and where they might go to. They consider issues of employment, healthcare, education, transportation, communication and much more.

The clear message is this: Independent of other context, our changing climate (arguably even for sudden-onset events) does not necessarily mean people will move.

What should we do?

That we can’t attribute human mobility to the changing climate directly does not mean, however, that we should sit our hands. We certainly need better evidence on the complex inter-relationship between climate and movement, but we also need to take action, improved by ever-growing understanding.

Climate change and its interaction with human mobility is fundamentally about development. The flipside of not being able to link climate and movement directly is the realisation that it is precisely because movement is about every aspect of life and living.

That means an analysis of climate and human mobility must be built into development, into long-term planning and day-to-day delivery of services, particularly for the most vulnerable communities, those for whom movement is a critical consideration each and every day.

This is mirrored globally, where we see concepts and architecture around migration and displacement embedded within an international response machinery more than 70 years old and lagging far behind the complex decisions families and communities now make.

The Global Compacts on Migration and Refugees, due to be agreed in 2018, are key ways the system can catch up, ensuring climate change and climate risk are front and centre of frameworks to govern and support people who move, whether by choice or otherwise.

In addition, there are actions that can target climate impacts where it matters most. This includes investments in disaster risk reduction which can combat forced displacement head-on.

The longer-term picture requires investment in climate adaptation. Projects that tackle the slow-burn effects of sea-level rise, desertification, salinisation and more are critical to ensuring people can choose whether to move or stay.

Movement itself can be considered to be adaptation – and perhaps the best kind when it is based on a carefully considered decision by an individual and their family. This is a message we surely all understand.

Please credit Zilient, an initiative of The Rockefeller Foundation, the Thomson Reuters Foundation, Blue State Digital and OnFrontiers. All rights reserved. Read the original article on

Cover photo by Foreign & Commonwealth Office (CC BY-ND 2.0): Zaatari refugee camp, Jordan.
Climate service innovation market dynamics from a multi-layered perspective

Climate service innovation market dynamics from a multi-layered perspective

By Peter Stegmaier & Klaasjan Visscher, Dept. of Science, Technology and Policy Studies, Institute of Innovation and Governance, University of Twente

Main messages: (1) There are different kinds of services with different underlying configurations of technologies, users, service providers, and business models; and (2) market development is complex and enablers and barriers are related. See EU-MACS Deliverable 1.4 for more detail.

Climate services are still a niche phenomenon. Service innovations tend not to be utterly smooth in the beginning. There is still a lot of experimentation with user practices, business models, products, regulatory structures, infrastructure, and technology, which makes it hard for them to compete on the market against established services or forms of ‘strategic intelligence’ (the latter we call ‘incumbent regime’).

The specific market itself might even be not yet fully developed (see figure below)—or very small and already dominated by the few services that were able to establish themselves in their niches. Newcomers will thus hardly gain a share, but rather have to find their own niches.

Especially when innovations include sustainability promises, market niches and user demands may not be ready yet, since the innovations may differ radically from the prevailing. Moreover, clever niche management will require to link niches at some point.

In order to become aware of climate services-related trends and processes that could have the potential to foster successful niche development, we carried out an explorative study (see EU-MACS Deliverable 1.4) on the EU niche governance of and procurement of innovation for climate services in global context, of emerging (soft) standards, conventions, and ethical frameworks; we looked into neighbouring niche developments (e.g. ecosystem services, climate engineering, platform capitalism with FinTechs and InsurTechs), into relevant technological innovations (e.g. blockchain, online information brokerage, internet of things, citizen sciences).

On incumbent regime level, we looked into innovation policies, consultancy, weather services, law, climate sciences, and economic frameworks; and finally also scanned into broader landscape developments, such as political discontinuation and economic divestment from fossil fuels, exits from climate governance, high-performance computing, social movements, knowledge demands, the blurring of design and use in many areas of governance, technology, science, and consumption, as well as into experiences with non-use and resistance.

For the stakeholder interactions we have developed—together with our project partners—a suite of interactive formats, in which this multi-actor and multi-layer perspective on actually useful climate services can be probed together with stakeholders.

As a red thread that runs through many stakeholder interactions, we have developed a typology of climate services along which we can imagine and discuss the prospective shaping of climate services at an early enough stage of a development (when modifications are still possible) through “constructive dialogues” between all relevant actors in a given field/sector.

Overview of core characteristics for types of climate services

From the analysis we derived suggestions for the workshops, where they could be probed in stakeholder interactions and analyses. They carry key ideas for better enabling climate services by overcoming major barriers:

Climate services as ‘strategic intelligence’: Climate issues address problems that are dealt with in arenas whose complexity and variation is growing. Issues are negotiated in multi-actor settings and on multiple levels of governance and business. Services need to offer insights that can serve explorative and analytic approaches, as well as allow for specialist and integrated use.

Limitations of sectoral focus: On top of sectoral analyses it is relevant to identify cross-sectoral, sub-sectoral, trans-sectoral or even non-sectoral phenomena that might already have or win impact on climate services markets in the future.

Roles of technology for climate services market building: Technology and sciences play a crucial role for climate services in multiple ways: e.g. as instruments of research, as service infrastructure, and as means of communication. Climate services need to observe and probe novel technoscientific trends and possibilities in order not to lose contact with innovation trends and to use amplifying effects.

Role of organisations and institutions: Existing ways in which business or public organisations work, which could be users of climate services, need to be taken into account, such as formal barriers to using climate services and informal ways of collaborating even across departmental boundaries. The same is true for institutional enablers and barriers, like rules, procedures, standing practices, and instruments policy-making and management.

Allowing for a variety of climate services: Specialized, tailored services provided by climate experts receive most attention, but also climate services integrated in management consulting, policy consulting or engineering consulting, climate services shared by knowledgeable users, climate services embedded in technology based consumer services, as well as packaged in insurance products and other risk management service products should be considered in the interaction with stakeholders.

Be careful with labels: Whatever ‘climate services’ could be, may in its the actual context of use not be called ‘climate services’. What at the end of the day counts as ‘climate services’ may in practice figurate in many different terms and practices (e.g. linked to ‘resilience’, ‘climate adaption’, ‘risk assessment’, to name a few), depending on what justifies paying attention to climate issues in a given context. It even may in some way or another be connected to other kinds of services, advice, or intelligence, only making sense in combination with other bodies of knowledge.

Anticipating the end of subsidies: Providers, purveyors, and users of climate services need to develop plans to become independent of subsidised projects (getting out of the protected space), while public procurement might remain an important segment of the market.

Trade-off between ecological and economic targets: Climate intelligence by climate services may lead to more sustainable management and policy, but not necessarily; it could also foster strategies that push the limits of avoiding climate protection until profitability can no longer be claimed.

Non-use and resistance: User-related service innovation will have to analyse carefully what leads actors not to use climate services or to even reject them. Resistance is a common feature of change and innovation processes, which cannot be reduced to deficiency or an involuntary act, but rather could, at closer inspection, turn out to be perfectly rational, voluntary, and capable. In sensitive areas, for instance, every link to “climate” or other environmental issues may be avoided in order not to raise further leading questions.

This article was originally published on EU-MACS is funded by the European Union under Horizon 2020 – Fighting and adapting to climate change. Project ref. 730500.

Cover photo by Chris Barbalis on Unsplash.
Resilience building at risk? Five key insights for addressing borderless climate risks

Resilience building at risk? Five key insights for addressing borderless climate risks

By Kevin M. Adams

Borderless climate risks have the potential to severely hamper or completely roll-back progress made on building resilience through climate change adaptation. Can they be addressed in the follow-up of the Paris Agreement’s global goal on adaptation?

This concern was the convening force behind a recent UNFCCC Side Event at COP23, titled A Global Adaptation Goal and borderless climate risks: Strengths and limits of the Paris Agreement. The event was organized co-organized by SEI, Acclimatise, and the Frankfurt School of Finance and Management, and was supported by both Formas and Mistra Geopolitics. Below are five key insights from the conversation, which brought together researchers, practitioners, and policy-makers.

1. Transboundary and teleconnected risks

Traditionally, climate risk is closely linked to the direct impacts of climate change, like increased flooding or drought, heat waves, or other extreme weather events. Yet, according to Magnus Benzie, SEI Research Fellow, this view makes several critical omissions. “By focusing primarily on climate impacts within national borders, both policy-makers and researchers have tended to overlook the ways that climate change in one part of the world can affect people in another,” Benzie said.

Climate impacts can flow across borders via several different ‘pathways.’ These include shared biophysical flows like shared rivers or ecosystems, trade flows, financial flows like investment, and flows of people as patterns of mobility, migration, and tourism change. Importantly, these borderless climate risks do not always occur among neighbours; transboundary risks may inspire regional cooperation when the impacts are localized, but risk can also be teleconnected, linking countries and people relatively far away from one another.

By considering the borderless dimensions of climate impacts, we are presented with a quite different view of vulnerability to climate change, raising important questions for the way we adapt, both nationally and as a global community.

A comparison of traditional climate risks (ND-GaIN Index of the vulnerability of countries to climate change, top) with borderless climate risks (Transnational Climate Impacts Index, bottom, Benzie et al, 2016:

2. Adaptation as a global public good?

Throughout the conversation, a potent and recurring example was rice trade between exporting countries like Thailand, Vietnam and India, and heavily import-dependent countries like Senegal. Extreme weather events that impact rice exporters like Thailand cause price hikes, which makes food security in Senegal vulnerable to climate impacts beyond its own borders. Taking trade relationships like these as a focus, Oliver Schenker, from the Frankfurt School of Finance and Management, argued that climate adaptation should be considered a global public good with important benefits for both importers and exporters.

Using economic modelling, Schenker’s work suggests that when developing countries receive adaptation finance and are able to optimize their adaptation, the benefits are felt all across the globe. There is a collective interest in financing adaptation, a statement strongly seconded by panellists Mizan Khan, a climate finance negotiator from Bangladesh, and Maria Banda, on the faculty of law at the University of Toronto.

3. Borderless climate risks under the Paris Agreement

Recognizing the potentially significant role of borderless climate risks, as well as the collective interest in addressing them, what provisions or instruments exist under the Paris Agreement to help take these into account? According to Annett Möhner, Team Lead for the Adaptation Committee at the UNFCCC Secretariat, National Adaptation Plans may be one potential avenue for beginning to identify and assess borderless climate risks. Some countries have already begun to do this, though teleconnected risks are rarely considered. Additionally, as methodologies are developed for assessing progress toward the Global Goal on Adaptation and performing the Global Stocktake in 2023, there is an opening to raise awareness about these risks, and think about how they may be meaningfully incorporated into stocktaking efforts.

Borderless Climate Risks side event at COP23. From left: Richard Klein, Dustin Schinn, Mizan Khan, John Firth, Annette Möhner, Rebecca Nadin, Maria Banda.

Likewise, as Åsa Persson, Senior Research Fellow at SEI noted, addressing borderless climate risks necessarily intersects with discussions about climate adaptation finance, and there is a need to think carefully about how to manage these risks while not re-allocating resources away from countries vulnerable to direct climate impacts. Dustin Schinn, Climate Change Specialist at the Global Environmental Facility (GEF), agreed, and suggested that countries needed to be in the “driver’s seat” for addressing borderless climate risks, and should be supported by finance and global coordination.

4. Not the only game in town

Given the country-driven nature of the Paris Agreement, it is also important to consider that the UNFCCC may not be the only venue for capturing and addressing borderless climate risks. Despite Senegal’s interest in bolstering Thai rice production, adaptation must be country-driven and Thailand may rightly choose to focus on other adaptation priorities of national importance.

Rebecca Nadin, head of the Risk and Resilience Programme at the Overseas Development Institute (ODI), suggested that there is the potential to learn from other UN conventions like the UN Convention to Combat Desertification or the UN Convention on Biological Diversity, or to mainstream climate considerations into the multitude of existing water resources treaties. Similarly, Sara Venturini, Policy Analyst at Acclimatise, argued that trade agencies, financial institutions, and private sector actors may have a substantial role to play in this regard, especially given their high capacities for complex risk assessment.

5. Research for the future of borderless climate adaptation

Moving forward, there is a strong call for more knowledge and research in this area. It is especially necessary to develop methodologies, indicators, and indices to raise awareness about the potentially significant impacts of borderless climate risks, especially those that are teleconnected. Strong calls were made to produce specific case-studies, as well as to develop meta-analyses that locate commonalities, help to identify best-practices, and foster collaboration.

This sentiment is perhaps best captured by John Firth, CEO at Acclimatise, who during the panel discussion remarked: “climate change has caused us to embark on a complex experiment that we do not entirely understand. New teleconnections may arise as we continue to grapple with how we should adapt to our changing world – work in this area will need to be iterative and ongoing.”

This article was originally published on the SEI International website and is shared with kind permission. Read the original article by clicking here.

Climate change adaptation from a water-land-energy-food-climate nexus perspective

Climate change adaptation from a water-land-energy-food-climate nexus perspective

The first policy brief of the EU funded SIM4NEXUS project on ‘Coherence in EU policy on water, land, energy, food and climate’ is now launched to shed light on synergies and trade-offs between policy objectives in the water-land-energy-food-climate (WLEFC) nexus. It also discusses the implications for the EU strategy on climate change adaptation as well as national adaption efforts.

Being comprised of water, land, energy, food and climate, the ‘WLEFC nexus’ constitutes a complex system influenced by numerous policies, including those that address sectors outside the nexus. The good news, though, is that European policy objectives along the WLEFC nexus are largely coherent.

The policy brief indicates that adaptation to climate change is indivisible from the achievement of numerous EU policy objectives in the nexus. For example, adaptation is inextricably linked to energy security, by ensuring sufficient water for cooling and hydropower generation, and protection of infrastructure against flooding. Similarly, indivisible mutual interrelations exist between adaptation and water policy aims on flood risk and water scarcity management. Furthermore, adaptation reinforces the achievement of objectives in the agricultural sector on farms’ competitiveness and income, as well as maintenance of forest cover as part of land-use management, which in turn supports climate adaptation.

However, climate change adaptation measures may also have a rebound effect. For instance, when implementing measures against droughts, more water becomes available during dry periods which could be used for irrigation or hydropower generation. But increased water availability could also discourage water efficiency improvements and lead to mismanagement of water resources. It may also increase energy use in water exploitation and management. Understanding such consequences is important for the effectiveness of policies and improving the synergies between them.

To read the full policy brief, please click here.

To learn more about SIM4NEXUS project, please visit its website.

Adaptive financing for increased disaster resilience – An opportunity for the private sector

Adaptive financing for increased disaster resilience – An opportunity for the private sector

By Katy Mixter and Laura M. Hammett

In 2016, natural disasters caused $175 billion in damages globally, according to MunichRE. Much of this destruction is caused by weather-related disasters, which were responsible for over 90 percent of global disaster damages from 1995-2015, according to a recent United Nations report. These weather-related disasters are those that are seeing marked increase in frequency and magnitude due to climate change. And as exposed populations rise, the damages from such events are also rising.

The scale of such destruction requires massive financial resources to catalyze and sustain recovery after disaster events, much less to address long-term climate adaptation and risk-reduction schemes. However, as traditional means of disaster aid fall short and needs go unmet, there is a need for a fundamental shift in post-disaster financing and room for the private sector to fill the funding gap.

Post-disaster financing falls short

Aid funding provided by governments, international NGOs, or humanitarian organizations often does not go where it is most needed or falls short. Following Hurricane Maria’s 2017 ravage of Puerto Rico, United States federal aid appropriations are expected to only cover around a third of the projected need for the island.

It is not only aid that is falling short. In 2016, MunichRE cataloged $175 billion in damages globally, but only 30 percent of those damages were covered by private insurance. Even though such assets were protected, the scale of these claims alone poses a huge risk to the insurance industry, which took a $35 billion loss in 2016. And often, disaster-insurance schemes (such as the National Flood Insurance Program in the United States) are backed by public resources that can be limited when many claims are filed.

Also, recent disasters show that insurance-claim processes can be lengthy and require policy-holders to find alternative means of financing reconstruction until money arrives.

An opportunity for the private sector – Adaptive Financing

Gaps in aid relief as well as preemptive insurance programs leave an opportunity open for additional innovation to meet post-disaster financing needs. The private sector has the opportunity to develop more tools to support disaster reconstruction and fill the gap that governments and international NGOs leave behind.

The limitations and opportunities for such innovation are addressed in our recent report published by Yale Center for Business and the Environment. The answer we propose is for banks to consider ways to offer economies affected by disasters more adaptive financial products.

Financial products include everything from mortgages to loans. Generally, financial institutions create fixed products and the customer chooses which works best. For example, a mortgage is a product which a client can typically buy with set terms. However, if a client wants to change the fixed terms of their contract, they have to refinance.

In contrast, if banks can figure out creative ways to offer flexible products, they could adapt these products to changes in customer needs. Imagine a loan product which could have the length of repayment automatically extended at no extra cost if the payee needs to request such an extension after a disaster. This could save the payee and bank from the pain and losses of default. Or a company could create a suite of products that have been preemptively designed for various disaster scenarios so that after an emergency, the most appropriate one could immediately be rolled out in a local market. This could help customers get back on their feet and bring in new business for participating banks.

There are many challenges to creating financial products given the complications that arise after a disaster. For example, it can be hard for financiers to assess risk and return in these uncertain environments using current risk-assessment models. In addition, it can be difficult to establish trust between financiers and recipients after a disaster. Therefore, creative solutions must be found to overcome these barriers.

The report dives into these and several other challenges and offers solutions suggested by experts throughout the field. Most importantly, to create such processes, financial institutions must create flexible supporting processes that allow finance providers to make ongoing adjustments to products in response to changing client needs. This requires a redesigned product-development process as well as a strong understanding of the specific challenges presented by disaster recovery.

Creating such financial products is neither easy nor straightforward, but companies that succeed can benefit from customer/supplier loyalty, enhanced brand reputation, and valuable experience that can push the capabilities of the organization and spur new internal innovation. We hope stakeholders can partner across the public, private and nonprofit sectors to incite change and adapt financial offerings in a time that is increasingly defined by disasters.

The report is available on the Yale Center for Business and the Environment website.

Click here to download it.

About the authors

Laura M. Hammett – Climate Adaptation Specialist with the United Nations Development Program (UNDP)

Contact: Laura.hammett(a) or lmhammett(a)

Laura M. Hammett is an urban resilience and climate change adaptation specialist whose research and professional experience span the intersection of sustainable land use planning, international development, climate policy and finance, and disaster risk management. Laura has worked to advance resilience programs at the US Air Force and United Nations World Food Programme, and she served as a community development Peace Corps Volunteer in Albania. Ms. Hammett recently completed a Masters of Environmental Management at Yale University and currently works with the United Nations Development Program to advance climate adaptation programming in Asian countries.

Katy Mixter – Consultant with the Boston Consulting Group

Contact: Katy.mixter(a) or kamixter(a)

Katy Mixter is a graduate of Yale’s School of Management and School of Forestry and Environmental Studies (MBA/MEM). She has focused on the intersection between finance, environmental sustainability and development, working at organizations ranging from the Connecticut Green Bank to The UN Development Program. Prior to returning to school, Katy worked on Citibank’s Corporate Sustainability Team, helping support the company’s environmental policies, operations, financings and strategy. She now works at the Boston Consulting Group in Australia.


Cover photo by Roosevelt Skerrit (public domain): A road in the Roseau area, Dominica, is littered with debris, uprooted vegetation and felled poles and power lines from Hurricane Maria.
New UNEP Adaptation Gap Report focuses on assessing progress

New UNEP Adaptation Gap Report focuses on assessing progress

By Georgina Wade

The recent release of the United Nations Environment Programme’s (UNEP) 2017 Adaptation Gap report highlights the necessity of understanding the key opportunities and challenges associated with assessing progress on adaptation at the global level, particularly for the successful implementation of the Paris Agreement.

Launched during the United Nations Climate Change Conference (COP23), the annual report differs from previous reports that focused solely on assessing specific adaptation gaps and focuses on the broader issues relating to frameworks, comprising concepts and data methodology. Future Adaptation Gap Reports will return to assessments of specific adaptation gaps.

The context of the report aims attention on four global adaptation provisions contained within the Paris agreement: the global goal on adaptation, the global stocktake to take place every five years beginning in 2023 as a means of monitoring progress, the transparency framework and adaptation communication provisions between parties.

The key findings of the report lead to the recommendation that a framework is needed that can capture the big picture, what is changing, and be flexible as methods improve.

The full report can be found at UNEP’s website.

Cover photo by Annie Spratt on Unsplash: Cassava harvest in Sierra Leone.
Using scenarios in corporate disclosure of physical climate risk

Using scenarios in corporate disclosure of physical climate risk

By Laura Canevari, Robin Taylor, and John Firth

The Task Force on Climate-Related Financial Disclosures (TCFD) and the Bank of England (BoE) held a conference: ‘Climate Scenarios, Financial Risk and Strategic Planning’, in London on October 31st and November 1st 2017. Acclimatise experts attended and have prepared this briefing note to advise those involved in preparing responses to the TCFD’s recommendations. The event explored how scenarios can assist companies to understand and evaluate climate change risks and opportunities. Insights on the importance of scenarios, key attributes, and principles for their use were discussed and are summarised in this briefing note. Conference presenters focussed on transition risk, leaving key issues concerning the use of scenarios in physical risk assessment unexplored. This was an omission on the part of the organisers, but perhaps understandable given the added complexity of assessing the risks of a changing climate. In this note we provide an insight into the role of scenarios in physical risk assessment as an introduction to a topic deserving its own conference.

Importance of scenarios

Corporates and financial institutions are beginning to respond to the TCFD recommendations, assessing both risks and opportunities, in preparation for reporting and disclosure.

“Scenario analysis is a critical forward-looking tool to address challenges and acquire key information”, Mary Shapiro, Special Advisor to the Chair, TCFD & Former Chair, US Securities and Exchange Commission.

The TCFD recommendations strongly advocate for the development and use of scenarios when analysing climate risk. To that effect, a Technical Supplement has been developed alongside their recommendations, titled ‘The Use of Scenario Analysis in Disclosure of Climate-Related Risks and Opportunities’. As noted by Andrew Blau, Director of Deloitte Advisory Strategic Risk, “scenarios are powerful tools that that allow for the exploration of different plausible futures in the face of uncertainty”. The uncertainty around both the impacts of a changing climate, and the policy and regulatory responses, present significant new challenges when compared with other environmental problems facing society – a point highlighted by Lord Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics. The scale of the effects stemming from physical impacts of climate change and from policies formulated to promote a lower carbon economy is enormous. How the world will respond to these new drivers of change is still uncertain. Traditional models and forecasting tools fall short when it comes to dealing with complex problems with such considerable unknowns.

Scenarios can help corporates and financial institutions broaden the horizons in their planning processes whilst increasing their flexibility and adaptability. Andrew Blau also considered how the development of scenarios can challenge users to develop ‘outside-in’ thinking, embrace diverse perspectives, and take the long view. The reward for these efforts is the ability to examine how a company’s strategies may perform, offering an improved view of changing risks and opportunities going forward. Scenarios can play a significant role in helping corporates ’ develop their own view of the world, but it is important to understand what they can and cannot offer within the context of disclosure and as a strategic business-planning tool.

Exploratory narratives, not descriptive predictions

A vital point highlighted by many presenters during the course of the conference was that scenarios are hypotheses, not predictions of what the future may look like. They provide a narrative, either qualitative or quantitative, which ‘describes a path of development leading to a particular outcome’ (TCFD Recommendations Technical Supplement). “[Scenarios] should be thought of as a means for discourse on important variables such as policy and technology possibilities in the future”, noted Dr Elmar Kriegler of the Potsdam Institute for Climate Impact Research (PIK).

Which scenarios to use?

At the conference, companies such as Shell and BHP Billiton showcased how they have developed and deployed a variety of scenarios to help think through various energy transitions. Shell discussed how they make use of different types of scenarios: from published ‘context exploring’ scenarios used to consider external issues that may affect their business, to ‘decision-centered’ scenarios, which are part of their internal decision-making processes. It was also noted that scenarios can either be borrowed from other organisations or developed internally.

Scenarios are not forecasts; they are explorations of possible futures, and multiple scenarios can be created to revise alternative views. Presenters referred to the importance of exploring several scenarios to gain different insights and noted that there are thought to be over 100 transition pathway scenarios.

A general set of principles for the use and development of scenarios emerged from the conference, which could help guide organisations through scenario selection.

Principles to bear in mind around the use of scenarios

The development of scenarios will require board level leadership and a continuing resource/time commitment by companies. Scenario development is iterative, and scenarios will need regular resets to ensure they reflect the present-day jump-off point. On day two of the conference, held under Chatham House rules, presenters identified a number of key principles for companies to bear in mind when developing and using scenarios, including:

  • Use multiple sources for data and narratives, and search out insights from new sources.
  • Ask: what do I have to believe for this scenario to be plausible?
  • Be sceptical of scenarios that look like the past.
  • Use the most up to date data and reference sources.
  • Ensure your scenarios reflect the variety in spatial, political, social, regulatory and environmental factors within the countries and sub-national areas in which you operate.

Physical risks are not yet being given due prominence compared to transition risks

The conference was notable for its focus on transition to low- carbon energy pathways, and the use of scenarios to help companies assess their transition risks. There was, however, very limited discussion of physical climate risks and the use of physical risk scenarios to explore implications for the performance of corporates and financial institutions.

Acclimatise sees a few key reasons for this. It is notable that there is more guidance in the TCFD recommendations on transition risks, and verifiable and auditable metrics for transition risks are already available and easier to evaluate within the context of business models in all sectors. It is also easier to adjust transition risk scenario outputs to fit into existing business and financial risk appraisal systems. Finally, there are many published comprehensive transition risk scenarios from multiple sources, e.g. International Energy Agency (IEA), Deep Decarbonization Pathways Project (DDPP).

Scenarios exploring the impacts of a changing climate (physical risk) for corporates and financial institutions are less well developed. We have a robust and authoritative science evidence base produced by the Intergovernmental Panel on Climate Change (IPCC) setting out possible changes in our climate. There are also several excellent sector impact models together with integrated assessment models (IAMs), which use climate model outputs to explore risks at the sectoral, system and spatial levels over time. These models, however, do not cover all sectors and geographies in a comprehensive, consistent way,

and there are knowledge gaps. For instance, while the ‘transportation’ and ‘materials and buildings’ industrial sectors are highlighted for disclosure by TCFD, there is a lack of comprehensive assessments of physical risks facing these sectors. Further, physical risks to specific investments in these sectors will be determined by the location, design, condition, and operation of physical assets.

The development of metrics which enable adaptation and resilience to be evaluated over time and across sectors is an emerging area of knowledge, and best-practice has not yet been established. These issues create challenges for corporates and financial institutions in using the available information to populate their own business scenarios, or to use scenarios produced by third parties, as envisaged by the TCFD. Progress on the development and application of physical risk scenarios falls short of what is required, as demonstrated by the lack of presentations and discussion on physical risk at the conference. Developing physical risk scenarios is complex due to the inherent challenges in trying to understand and evaluate the physical risks and opportunities generated by a changing climate. Impacts from physical risks may also only become apparent over longer time frames, sometimes spanning periods that go beyond the current strategic thinking of corporates and financial institutions. Yet, understanding and addressing the materiality of physical risks, and identifying opportunities will be a vital piece of determining the overall success and long-term sustainability of these organisations, and will be a crucial step for building the resilience of corporate portfolios, as noted by Dr Fiona Wild, Vice- President Sustainability and Climate Change, BHP Billiton.

Acclimatise – experts in physical risk for responding to TCFD recommendations

Acclimatise has worked on physical climate risk and adaptation with corporates and financial institutions for over a decade, helping them identify and respond to physical risks and to take advantage of emerging opportunities generated by a changing climate. We have witnessed the corporate, societal and environmental benefits stemming from the promotion of resilience-building strategies.

At present, we are supporting a Working Group of 16 international banks through a pilot project organised by the United Nations Environment Finance Initiative (UNEP-FI) to meet the TCFD recommendations and develop a harmonised process for the banking sector. We are helping the Working Group develop scenarios and analytical approaches to better understand physical risks and their impact on assets and investment portfolios. We believe the ability of firms to embrace risks and opportunities, and factor them into strategic planning will improve their performance, and create a more resilient banking sector, able to meet the evolving needs of customers as they respond to a changing climate.

Acclimatise is also working for the European Bank of Reconstruction and Development (EBRD) and the Global Centre of Excellence on Climate Adaptation (GCECA) to develop risk, opportunity and strategic metrics for the financial services sector to assist in TCFD disclosures. A major conference will be held on 31 May 2018 to present the results of this work.

While many tools, data sets, studies, and reports exist to analyse physical risks for fixed assets, aggregating these across a portfolio, sector, or country requires a fresh approach. With our guidance, corporates and financial institutions can begin to embark on their TCFD journey.

To discuss how your organisation can meet TCFD requirements, and assess and disclose physical climate risks and opportunities, please contact Laura Canevari: L.Canevari(a)

Further information:

  • The TCFD was established by the Financial Stability Board in response to a request by the G20 Finance Ministers and Central Bank Governors who recognised the potential implications of climate change for the global financial system. The TCFD recommends corporates and financial institutions assess both risks and opportunities, in preparation for reporting and disclosure. Disclosure is recommended in four areas: governance, strategy, risk management, and metrics and targets. The TCFD recommendations, which were issued in June 2017, have helped bring climate risk to the corporate reporting agenda, and many cor- porates and financial institutions are now taking action to include climate risks and opportunities in the annual financial reporting. Documents from the TCFD, including the recommendations, technical supplement, and annex on implementation can be located here:

  • United Nations Environment Finance Initiative:
  • Global Centre of Excellence on Climate Adaptation:

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Cover photo by William Bout on Unsplash.
CDKN paper showcases lessons learned from working on climate compatible development at different scales

CDKN paper showcases lessons learned from working on climate compatible development at different scales

A recently released working paper by the Climate & Development Knowledge Network, CDKN, showcases lessons learned from seven years of climate compatible development in Asia. The report looks at ten CDKN initiatives that were carried out in India, Indonesia, Nepal and Pakistan, and offer a wealth of experience about climate compatible development at different scales.

The authors argue that effective design is key to working with scale, as such it is analysed through two different lenses in the report. Firstly, it uses ‘pathways’ to describe the different strategies to work with scale, they fall into three broad categories:

  1. Short-term multi-scale pathways that are research-led, and succeed in building awareness, but fall short of embedding new practices.
  2. Short-term multi-scale pathways that adopt a hybrid action and research approach from the outset, and succeed in embedding new practices at some scales (mainly locally), but not at others.
  3. Longer-term multi-scale pathways that take an action research-led approach, and succeed in embedding new practices at multiple scales.

Secondly, through analysing the pathways, the authors suggest that the following principles enable effective, multi-scale pathways for climate compatible development:

  • Get into action early, by encouraging the use of action research approaches.
  • Adopt a flexible and adaptive management approach to project and pathway development, consistent with an action research framing.
  • Extend initial short-term project investments into longer-term pathways, but only in cases where innovation is taking hold in practice as well as in understanding.
  • Adopt flexible points of entry, responding to opportunities as well as more carefully planned approaches.
  • Draw on a rich and flexible toolkit of knowledge brokering and knowledge networking practices, with particular attention to ‘knowledge bridging’ between sectors and between scales.

Acclimatise worked on one of the projects that this paper draws from. Acclimatise supported CDKN India in working with the government of Uttarakhand to deliver a state-level climate change vulnerability and risk assessment (VRA), intended to support the delivery of the State Action Plan on Climate Change (SAPCC). Acclimatise’s primary role was to ensure that the scientific knowledge resulting from the VRA linked to the implementation of the SAPCC and facilitated decision-making in the state. Our team worked with a range of stakeholders including the state government, scientists, community-level organisations, research institutions and the private sector to build awareness and assess capacity for planning adaptation action. This led to the creation of the “Agenda for Climate Action”, a set of policy briefs that enable the results of the VRA to guide climate resilient decision making in Uttarakhand, taking into account international, national and state-level priorities, as well as evidence at the community level.

In the new working paper, Jennifer Steeves of Acclimatise states that “working at different scales requires expertise in working with different types of organisations. CHEA [Central Himalayan Environment Association] was very competent at the local (community) level – but other expertise was needed to link this work to the district- and state-level VRA and bring this work into policy. One of the roles we took in Acclimatise was to link partners and help them avoid working in silos.”

Learn more about the Uttarakhand project by watching the video. The outputs of the project can be found by clicking here.

Analyising existing data infrastructures for climate services

Analyising existing data infrastructures for climate services

By Elisa Jiménez Alonso

The Horizon 2020 project EU-MACS (EUropean MArket for Climate Services) is in full swing and our research is showing first results. Acclimatise and EU-MACS partner Twente University finalised a report analysing the existing climate data infrastructure, and how it may inhibit or stimulate the European climate services market.

The research involved mapping and cataloguing relationships of organisations involved in the climate data infrastructure value chain, as well as interviewing a few experts to gain further insights and corroborate the literture research. Furthermore, a usability survey was designed and carried out to evaluate a range of climate data websites and portals. Finally, the research analysed data infrastructure governance putting emphasis on the processes of data infrastructure governance in Europe.

Analysing relationships in the climate services value chain.

The findings show that the quality and success of climate services highly depend on whether they will fit user needs. Thus, embedding users as integral and equal partners in the co-construction of climate services is of utmost importance. Bridging the gap between user needs and what providers think users need should be seen as an essential part of climate services development.

The report also developed a series of six hypotheses to be tested during future phases of the EU-MACS project:

  1. A common data format and a common convention for data records and exchange will boost services and the popularisation of climate data use.
  2. Role-specific data finding aides (e.g. effective search functions and clear navigation), offered with real human interactive support, are crucial for successfully establishing and maintaining data provider/ user relationships.
  3. Climate services philosophies sometimes seem to pin all hopes on either a good portal or a good set of aides; the solution, however, seems to be more of a combination of both, plus a good overview of available data sources, functional methods and active human (personal/personnel) engagement facilitating how users interact with both portals and aides.
  4. The ultimate task of a good data infrastructure governance is to emancipate it into a ‘knowledge infrastructure’ with greater usability and real-world application by other sectors (e.g. use of data by the mining sector).
  5. Boundary objects can provide the chance to let disparate knowledges and interest, positions and conventions converge. There are numerous items that may enhance cooperation across the boundary of climate sciences into other domains, for example use cases that show the value of climate services (i.e. the business value) to users operating in other, non-climate services, sectors (e.g. aviation or road engineering).
  6. It makes sense that free and open climate data is made accessible through a portal (e.g. Copernicus C3S) when flanked by support and tutorials that enhances inclusivity of a broader user base. Portals need to increase user experience to maximise impact. Freely available data, when it is not combined with appropriate levels of support, can be problematic.

Download the full report “Analysing existing data infrastructures for climate services” by clicking here.

Cover photo by Michal Osmenda (CC BY 2.0): Weather station on Mount Vesuvius.
Climate change impacts and adaptation on Southwestern DoD facilities

Climate change impacts and adaptation on Southwestern DoD facilities

By Acclimatise

A newly published Strategic Environmental Research and Development Program (SERDP) report completed by a team comprised of researchers from the University of Arizona and Acclimatise assessed climate change impacts and adaptation on Southwestern US Department of Defense (DoD) facilities. The project aimed to:

  1. develop and pilot-test approaches for climate risk assessment;
  2. evaluate climate adaptation best practices in a series of case studies, and
  3. evaluate approaches and needs for climate services to support adaptation planning compatible with DoD decision-making needs and processes.

In a four-year long process the project team interacted with DoD personnel in risk assessment workshops and case-study pilots at four installations in the Southwest, through participatory processes. They conducted interviews and convened workshops with personnel, in order to identify gaps, needs, and opportunities for infusing climate adaptation thinking and practice into DoD operations. These interviews also helped evaluate promising approaches to climate services, that mesh with military culture, leadership, and practice. Current obstacles to adopting climate adaptation measures and possible solutions to overcome these obstacles were also explored.

The research team found that integrating climate change risks into decision-making processes creates active engagement as it focusses on current challenges that can be dealt with now. Furthermore, adopting publicly available data and decision-making tools can help bases with limited resources to undertake climate risk assessments comprehensively. Finally, the study showed that while base management was receptive to climate-related actions, day to-day priorities dominate decisions and resource allocation. This is further complicated by the fact that there is rarely designated funding for climate adaptation, forcing base management to allocate already scarce funds to other competing and iften immediate priorities. Thus, mainstreaming climate into existing priorities could help tackle such budget issues.

Installations are the “front lines” of climate adaptation in the DoD and their emphasis allowed the researchers to develop a unique strategy tuned to the needs and challenges of this organizational level, including (1) assessing data and information needs, (2) assessing Base wide risk, (3) engaging personnel, (4) communicating climate change information, (5) mainstreaming climate change into DoD practice and policy, (6) addressing DoD institutional norms, leadership and partnerships, and (7) providing climate services for DoD installations and supporting DoD climate services capacity. This model shows great promise to speed the incorporation of climate adaptation planning at all levels of the DoD.

Download the full report by clicking here.

Cover photo: U.S. Air Force photo by Airman 1st Class Chris Drzazgowski/Released – U.S. Air Force Airman 1st Class Koleton Mitchell, 25th Operational Weather Squadron weather forecaster, participates in a 7-mile-long ruck alongside fellow Airmen at Fort Huachuca, Arizona, one of the bases that participated in this research.