Furthering the case for climate change adaptation and mitigation, Nichole Chan, Consultant at Corporate Citizenship in South East Asia, explores why it’s time for businesses to fully account for their environmental risks.
Are we fully accounting for environmental issues with our operational risks? The most successful companies are able to identify and mitigate most of their risks ranging from financial to security, social media and so on. I’m going to admit I’m more on the science side of things, and in my head, I believe most of us aren’t doing enough to address these environmental risks, whether it be in terms of resilience and adaptation, or prevention and mitigation. Already businesses are beginning to experience the strain of limited resource availability, as well as the impacts of climate change, and the conversation is slowly changing. Having worked for a number of years within the environmental engineering space, I may I have a different perspective than some of my CSR colleagues.
I see some patterns slowly emerging both in terms how environmental risks are manifesting themselves, and of addressing certain operational risks related to the environment.
The summer after I left New York City for Singapore, it was hit by one hurricane. Hurricanes affecting NYC were already thought of as extremely rare, unicorn sort of events—but then the next year—an even more powerful hurricane hit. Sandy damaged areas of southern Manhattan, New Jersey and so on, totalling to an estimated between US$78B to US$97B in direct damages (Kunz et al, 2013)*, and on a personal note, Sandy’s storm surge destroyed some of my friends’ family homes on Rockaway Beach where I used to spend summers digging in the sand and BBQing.
Similarly, it is well known that Southeast Asia will bear the brunt of climate change issues during the first half of this century (IPCC, 2014), and we see this prediction already manifesting. To name a few very clear examples of adverse weather events that society, governments, business were not adequately prepared for: droughts in northern Taiwan affecting manufacturing industries earlier this year (AmCham, 2015), unexpected, heavy flooding in Thailand in 2011 damaging production equipment and merchandise at manufacturing facilities (World Bank, 2012), and powerful, frequent, and destructive typhoons in Philippines known to wreak havoc on local communities and businesses (Sano, 2013). There is much debate over who is responsible for adapting and mitigating these risks.
Here in Asia, some governments and nations are already trying to visualise, predict, finance, and adapt against such events, following closely the path taken by the most progressive Western nations around the world. In others, you see businesses taking up the traditional government roles, where they improve infrastructure both for themselves and for the communities where they operate. And of course, in others where we see a disarray of various activities which doesn’t really stack up, where there’s such a predominant focus on the short-term economic gain rather than the long-term future of the nation and businesses that operate there.
Although there are some initiatives—they don’t always add up to enough risk management, prevention, and preparation. And, even still, the execution of this preparation is inconsistent. Like other parts of the world much of the debate around who is accountable goes on and on and on. But the thing that strikes me the most is, while we spend all this time arguing about who pays, the science isn’t debatable. And our precious time to adequately defend and prevent ourselves against the worst that could happen is growing short.
*Kunz, M., Mühr, B., Kunz-Plapp, T., Daniell, J. E., Khazai, B., Wenzel, F., & Zschau, J. [2013]. Investigation of superstorm Sandy 2012 in a multi-disciplinary approach. Nat. Hazards Earth Syst. Sci. Discuss., Vol. 1, Issue 2:625-679. doi: 10.5194/nhessd-1-625-2013