Making the Case for Responsible Corporate Adaptation
We have seen a surge in corporate social responsibility (CSR) programs over the past several years, party because they make for great optics. In reality, however, more companies now realize that improving the lot of people and the planet is good for business. Now Four Twenty Seven, which describes itself as a social enterprise focused on building climate resilience through social innovation, has issued a report that urges companies to view climate adaptation not only through the lens of risk management, but as a moral imperative.
Published as the COP21 talks in Paris wrap up, as part of Four Twenty Seven’s Caring for Climate agenda, this analysis attempts to make a business case for adapting to the risks posed by climate change. While articulating why climate change poses challenges such as water scarcity, threats to public health and regulatory uncertainty, the report also makes it clear that addressing such risks also presents business opportunities. At the highest level, the report’s authors suggest companies take a four-pronged approach in order to support local communities while protecting their business:
- Invest in people, from those who work within a firm’s supply chain to its employees and customers
- Participate in efforts to protect ecosystems, watersheds and natural resources that have an impact on a company’s business
- Share knowledge and technical resources, instead of hiding behind the veneer of “proprietary information”
- Ensure that a company’s operations do not put additional stress on the local public infrastructure and community assets
The results, insists Four Twenty Seven, can strengthen a business that will in turn benefit from improved operations and competitiveness, see its value chain protected, find new business opportunities, and burnish its brand reputation.
The report tries to bolster its concussions by summarizing case studies of global companies currently undertaking climate resilience projects. Some of these examples are compelling. For example, Mars Inc. has invested in clean energy projects while working with rice and cacao farmers in order to improve crop yields while taking on new best practices, including reducing its water consumption. Allianz, the global insurer with a large agriculture-based clientele, has been involved in a program that helps to protect rice farmers from climate risks while enhancing crop insurance programs throughout Southeast Asia.
Other examples, however, could invoke some head-scratching. Nespresso is lauded for its investment in agroforestry, while the fact that the popularity of coffee pods is creating a massive waste problem is overlooked. And the jury is still out on whether Coca-Cola will really return 100 percent of the water used within its operations back to local communities and the environment.
While focused on what the private sector has accomplished and how it can do even more on the climate resilience front, the report also offers advice for policymakers. Government agencies can do more to present data-related local climate change risk in a format that businesses can easily incorporate in order to make the best possible decisions; fold climate change considerations into all planning processes and regulations instead of having them in a separate silo; and clearly communicate climate adaptation and resilience efforts so that investors are properly informed.
Image credit: Leon Kaye
Published earlier today on Triple Pundit.