By: Matt Gergyek
Climate change is one of the greatest threats facing humanity today. By the end of the century, average global temperatures could rise by at least two degrees Celsius, according to a landmark study published by the Intergovernmental Panel on Climate Change. This is largely due to a dramatic increase in greenhouse gases in the atmosphere that trap heat caused by human activities such as burning fossil fuels, intensive agriculture, deforestation, and waste. NASA projects that if the global average temperature increases by just two degrees Celsius by 2100, melting ice will cause sea levels to rise between 0.2–2 metres in the next 80 years, causing severe flooding in coastal Asian cities, including Shanghai and Hong Kong.
Big business tends to be more closely linked to contributing to climate change than being concerned about its effects, but the private sector stands to suffer some of the greatest consequences. Rising ocean water, intense heat waves, and extreme weather events pose major threats to disrupting supply chains and destroying production and shipping hubs. One study estimates that the cost of climate change will rise to US$369 trillion by the year 2200.
The private sector needs to help change the narrative by playing its part in curbing the effects of climate change. To take steps to support this, IDRC has partnered with Business for Social Responsibility (BSR), a global non-profit organization that develops sustainable business strategies with its member companies, which include General Motors and Microsoft.
“Businesses…have no choice not to be involved anymore,” said BSR’s Climate Director David Wei in a podcast hosted by IDRC. “Climate change presents material risks to them as businesses, [and] a successful business in the future will be a climate resilient one.” Climate resilience, Wei says, refers to the capacity and adaptations the private sector must build to absorb stresses caused by climate change — not only for the good of their business, but for the good of all.
Developing countries have historically played very little role in causing climate change, yet they face the greatest threat. Wei indicated that many of these countries lack public funds to build resilience to climate change because their priority is on providing basic services. “There’s no point in hardening your factory wall if the road is washed out and you cannot get your workers inside,” he said. “Community resilience will bolster [a business’s] own resilience.” The IDRC-supported BSR project is exploring ways to leverage private sector financing to scale up adaptation efforts in developing countries by performing national policy assessments in Bangladesh, Indonesia, Malaysia, Mozambique, South Africa, and Thailand.
A report released by BSR and the Carbon Disclosure Project found that nearly three-quarters of the 75 supply chains analyzed believed that climate change could have significant impacts on their business operations, suggesting the private sector is receiving the message that climate change poses a real risk. However, only approximately half of them were working to manage this risk, exposing a gap between theory and action. “[There’s] the idea that [climate resilience] is a public good and therefore it sits firmly outside the role of the private sector,” Wei said. This project aims to bridge the gap.
“The social responsibility of business is broadening,” Wei said, and “there is a clear opportunity to have businesses build climate resilience. The potential impact … is necessary to have the just and sustainable world that we want to live in.”
Listen to David Wei’s interview on Climate Change Talks.
Learn more about mobilizing private sector investments to build resilience to climate change.