Scott Anderson

Friday Roundup ? 4/22/11: Adapting to Climate Change

Earth Day used to be somewhat limited to raising awareness about pollution and recycling in an effort to change consumer and corporate behaviors. And while we still need to be, as Thomas Friedman calls it, a “work in process” when it comes to improving our consumption and conservation habits, Earth Day – it seems – is also about recognizing reality. That is, the reality of climate change and the need to deal with it – ready or not.

Last year, the U.S. military for the first time ranked global warming as a threat to U.S. and international security; and has built contingency plans to prepare the symptoms of climate change, such as mass environmental refugees, resource conflicts and other humanitarian crises. Many, multinationals with sprawling supply chains to worry about have developed similar plans. But those most at risk are the impoverished, living in poorly-managed and/or densely populated cities. How can businesses and investors help them to adapt, and do so with triple bottom line results?

“These are the most exposed people and there is very little engagement with them,” Devyani Parameshwar, of Intellecap, recently told me. “At the same time, (private stakeholders) are missing out on tremendous opportunities.”

For the past year, Intellecap has worked with the Rockefeller Foundation and the Asian Cities Climate Change Resilience Network (ACCCRN) to unearth those opportunities for a new report, Opportunities for Private Sector Engagement in Urban Climate Change Resilience Building (UCCRB). It identifies such “resilience” builders as private firms that can provide products and services that not only serve essential health, food, water and finance needs, but also simultaneously bolster infrastructure and prepare for disaster.

The study targeted ten cities in Asia – apropos of the fact that 60 percent of global population growth will be concentrated in Asian urban areas during the next three decades. The researchers called out nine opportune UCCRB sectors: micro-insurance, healthcare, water management, affordable housing, waste management, information and communication technology, livelihood promotion, microfinance and off-grid renewable energy. They posit several insights for increasing private sector engagement, and they advocate business resilience to climate change – in and of itself – is a “strategic angle” that will nudge open doors with other stakeholders, e.g. governments, economic development groups and infrastructure developers.

This resilience needs to be baked into the long-term value proposition of a particular business, which could, as researchers describe it, “cross-subsidize disaster response, which rarely has an associated business model.” A rudimentary example: Using solar energy systems to power water pumping stations – this reduces flood risks during rainy seasons or emergencies, but also powers the grid the rest of the time.

On the same topic, the World Resources Institute has an interesting look at how one Bangladeshi community is harnessing microloans and new floating crop techniques to adapt to climate change. Although it is more policy focused than investment focused, WRI’s flagship World Resources Report this year was about decision making for adaptation to climate change.

Though the topics of recycling and pollution continue to be relevant today, the work of these organizations show us that we must innovate toward an even greater goal – simultaneously tackling the inextricably linked issues of poverty and environmental degradation, driven by the urgency of climate change.

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