12 key messages have been formulated that describe the role of business in climate change adaptation
1. The most significant driver for businesses to get involved with climate change adaptation is to protect the resilience of their own operations and of their value chain (both suppliers and customers). Assessing risk and planning for business continuity will be central to any adaptation strategy. This is already a concern among owners and operators of critical infrastructure who make long-term investments and need to safeguard their networks and services. Overall, however, enterprise risk management systems tend to be relatively limited in Asia and emerging sustainability risks such as climate change are not well-integrated.
2. More and more, companies are identifying the business opportunities of long-term climate change, such as water technologies (e.g. seawater desalination plants and water-saving initiatives, agricultural improvements (e.g. drought and saltwater-resilient seeds, alternative farming practices), and insurance solutions to climate change risks (e.g. weather index insurance).
3. The science of climate change remains uncertain, creating a gap in information on the expected impacts at the national or subnational level and the business risks associated with these impacts. It is quite rational for profi t-oriented businesses to avoid investments with long-term uncertainty. In order to understand business risks and integrate these risks in business strategies, the private sector needs improved climate information services.
4. Existing information on climate change and its associated risks is not currently useful to businesses. Climate information needs to be more geographically specifi c and tailored to particular industrial sectors to support business planning. In general, there is a lack of expertise, knowledge, and know-how relating to all aspects of climate change adaptation within businesses. Capacity building is required at all levels.
5.Any approach to climate change adaptation needs to be linked to a broader development agenda, and efforts to build the resilience of the poor must be prioritised. This could be an interesting entry point for businesses that are becoming more interested in proactively contributing to sustainable development.
6. Climate change adaptation requires responsible business practices that contribute to the sustainable development of an economy and society. Functioning ecosystems and sustainable livelihoods are key to building resilience to climate change. Proactive business approaches to protecting ecosystems and contributing to sustainable livelihoods, especially for vulnerable communities along their value chain, will need to be more effectively promoted.
7. Climate change adaptation projects can be a signifi cant part of a company’s corporate social responsibility (CSR) strategy, particularly when linked to community investment programmes, responsible supply chain management, inclusive business practices, and “bottom of the pyramid” (BoP) products and services. Innovative, community-based climate change adaptation can be an important element of CSR. Increasingly, businesses will need to screen their community investment projects for climate risks to ensure that project outcomes are not undermined by a changing climate in the long term.
8. The most common need expressed in the adaptation community in terms of private sector engagement is additional funding. However, existing public adaptation responses and fi nancing mechanisms, including Offi cial Development Assistance (ODA) efforts and the fi nancial architecture of the UN Framework Convention on Climate Change (UNFCCC), are not clear in their direction, alignment, and effectiveness. The incentives for businesses to provide additional funding and targeted investments are limited.
9. There are opportunities to tap into business fi nancing for adaptation. However, business can play an even greater role in climate change adaptation by contributing expertise, effective planning and management approaches, and fast moving innovative capacity. Through responsible business practices, products and services, as well as corporate community investment programmes, business can help to build resilient economies and societies.
10. National governments across the region have developed action plans to mitigate and adapt to climate change, but translating these plans into effective policy and regulatory mechanisms is in an early stage. Public consultation on climate change action plans and programmes is often inadequate and engagement with the private sector has been particularly limited.
11. National adaptation strategies will be most successful if they bring together partners from government (national and local), civil society organisations, and the private sector. Stakeholder engagement processes therefore need to be wide ranging and include both large and small business.
12. Some businesses are recognising the need to prepare for future impacts of climate change. They are looking for guidance from national governments to better understand the impacts of climate change, the business implications, and the response options. Many businesses would welcome the certainty regulation would bring, if it is fair and implemented evenly.
SOURCE / CSR Asia Centre