Companies and Climate Resilience: Mobilizing the power of the private sector to address climate risks

Report
from Red Cross Red Crescent Climate Centre
Published on 19 Aug 2019 View Original

by Edward Cameron, Julie Arrighi, Fleur Monasso, Pablo Suarez, Eddie Jjemba and Carina Bachofen
Illustrations by Rebeka Ryvola

Executive summary

Climate impacts are intensifying around the world with serious implications for the humanitarian community. Rising average global temperatures are leading to more severe weather events, changes in disease vectors, and exacerbating food and water insecurity. The impacts on the vulnerable and marginalized communities are acute and disproportionate, in particular affecting the development aspirations of women, children, migrants, the urban poor and indigenous peoples.

The private sector is an essential partner in reducing the impacts of climate change and extreme-weather events on vulnerable people. The innovations, products, services, political influence, capacity to shape behaviour, and investments of both multinational corporations and small and medium-sized enterprises (SMEs) are essential for enhancing the resilience of marginalized and vulnerable communities across the world in the face of climate variability and weather extremes. This paper argues for the Red Cross and Red Crescent Movement (“the Movement”) to reimagine its engagement with the private sector in addressing the humanitarian consequences of climate change.

The private sector has emerged as a source of significant climate leadership. More than 6,000 companies and investors from 120 countries, representing at least US$36 trillion in revenue, or half the global economy, have made ambitious climate commitments. Most of these are focused on the reduction of greenhouse gas emissions. It is now time for those companies to demonstrate leadership on climate resilience.

There are two key entry-points for the Movement to partner in mobilizing private-sector leadership on climate resilience. First, businesses can do a better job of diagnosing climate risk, both for their supply chain as well as for the frontline communities that service that supply chain. Most private-sector risk analysis is focused on analysing hazard and exposure and does not include the third critical element of vulnerability analysis. Failure to understand the vulnerability of people and assets amplifies the climate and disaster risk facing a business. The Red Cross Red Crescent can play an important role in collaborating (with technical expertise) on analysing and reducing vulnerability, especially in at-risk communities.

Second, businesses need to broaden their understanding of climate resilience, specifically by recognizing how human, social, natural, physical, financial and political capital assets can become integral parts of a successful enterprise risk management system. These six types of capital assets are building blocks to private-sector resilience and they are closely aligned to the Movement’s definition of the six characteristics of a disaster-resilient community. Leveraging these strong parallels and potential interplays can help to catalyse resilience-building across private-sector supply chains and within vulnerable communities. The humanitarian community has a pivotal role to play in mobilizing the private sector through the provision of expertise and a commitment to partnership.