Climate change continues to be at the top of the agenda for both developing and developed nations. It brings with it unprecedented challenges. This uncertainty has brought about the need for governments and businesses alike to create climate-resilient societies and markets.
Mark Boshoff, Head of Climate Resilience and Sustainability Strategy at Nedbank Commercial Banking, looks at how businesses can make the right choice – one that will not only ensure that their business models are climate resilient, but that they contribute to the fight to save the planet.
Resilience is broadly defined as the ability to bounce back. Boshoff characterizes climate resilience and sustainability as something everyone in a business is responsible for; from level one employees right up to the CEO. He says to create climate-resilient strategies, businesses need to think of the acronym MAT: Mitigate, Adapt and Transform.
“You can mitigate by first cleaning up your own act, by reducing your carbon footprint, reducing your emissions, and trying to get it going on that basis. It also looks at what happens when that event strikes you: Do you have adequate insurance? Are your supply chains in a position so that you can reorganize them?” he asks.
Risks
As with any major global shift, climate change not only poses risks to the planet but also risks to your business operations. Boshoff identifies the following four risks:
• Financial Loss: Your company can be sued for being a polluter;
• Infrastructure and Supply Chain: You need to look at how you can protect your infrastructure and insure it to mitigate loss in the event of a disaster;
• Reputation: How do stakeholders and the communities you do business in perceive you?
• Stranded Assets: Insuring your business isn’t obsolete in a few years.
Boshoff explains stranded assets by saying: “You’ve got to be very, very certain that you don’t have a business that is running some kind of operation that is going to be obsolete in a couple of years’ time. Think, for example, of fossil fuels and coal mines, not because they are necessarily bad, but because industries are moving away from them and you don’t want that to be your sole offering, or your only product or only asset.”
Opportunities
It isn’t all doom and gloom, as climate resilience can also present businesses with the opportunity to pivot and expand into untapped markets, like the renewable energies sector.
“One of the opportunities is the demographic that is involved here. Think of millennials – they are very, very aware of climate change. They are the generation that is going to inherit this planet and if they decide that your company may not be on the right track, they can very quickly boycott you. Just think of the power someone like Greta Thunberg has got,” he adds.
Nedbank leads the way in its sector and is known as the ‘green bank’, helping businesses see the opportunities in climate resilience by creating various funding mechanisms to support the shift to more sustainability-focused business models.
