One of my 2014 resolutions is to embrace the communication strategy and efficiency of the climate change discussion, because up to this point its been a mis-mash of scientific essays, op-ed pieces, and sound bites that ultimately die a quick death on the back pages of the Daily Planet or the margins of (isnert news website). In doing so I couldn’t help but notice the amount of Twitter activity around the hash tag #ClimateRisk2014, which captured the thoughts and quotes presented during the 2014 Investor Summit on Climate Risk at the United Nations last week in co-presented by the CERES group. The event serves as the preeminent forum for leading global investors to discuss the implications of climate change for capital markets. One key topic headlining this year’s summit included investments in climate friendly and sustainable energy sources. International constituents agreed during the 2010 Summit that $1 trillion per year in green energy investments would be necessary to limit the rise in global temperatures to only 2 degrees Celsius by 2050. Bloomberg reported the global investment value in 2012 at $281B, far short of the target value necessary. This years summit brought together more than 500 global finance leaders to discuss the latest climate science trends and their implications on investment portfolios, efficient energy technology and climate conscious investment opportunities. Maybe the most paramount of goals was to discuss the financial community’s role supporting energy policies on a domestic and international ongoing basis. The topic of Climate Change was then carried over into this last week’s World Economic Forum in Davos, Switzerland. Though a bit wider in its range of topics, key ideas were shared from politicos and business leaders alike on how to tackle what could be the defining issue of this century. It was interesting to read the summary of events and quotes (hat tip to The Guardian) on how the climate change issues acing the best and brightest business leaders are not overly complex or unique from company to company. Dan Rourke, Chair of the Global Agenda Council on Sustainable Consumption noted that when speaking with CEO’s, often times they struggled to promote sustainable business models due to the short-term thinking of investors and board members, as well as false consumer interpretation of green product under-performance. The battle is now more than ever a matter of convincing all parties of the benefits of sustainable practices to the bottom line. Bloomberg ran an interesting article 1/27 about Coca-Cola’s internal planning around climate change and its impact on their supply chain around the globe (commonly referred to as Supply Change Risk* in the Enterprise Risk Management world). The key themes posed are “How does climate change affect my business?”, “What are the investment consequences (or opportunities)?” and “Who will be the winners and losers?” When the question moves from degrees Celsius or millimeters of sea rise to the cost of sugarcane and corn syrup, it’s easy to see why manufacturers and retailers alike have dedicated resources focused on the matter. It’s clear that climate change will most certainly seep further into the regular rounds of discussion within progressive companies and at-risk industries. There still exists a space for more targeted communication to the end-user on potential impacts and risk mitigation strategies, and we should see companies and talented individuals fill this space in the years to come. And the efforts are no longer focused on convincing the existence of climate change, and instead target options to rise above the impacts and create business models that are pro-environment, sustainable and profitable. -PMB_Z
* We saw this concept magnified following the 9.1 magnitude earthquake and subsequent tsunami in Tohuku Japan in 2011. A large portion of the semiconductor manufacturing industry, which runs countless gadgets and appliances in our everyday lives, were impacted thus resulting in supply chain risk jumping to the forefront of risk discussions. It also brought to light another topic popular at this years WEF in Davos; building more sustainable cities in the face of climate change and natural hazards.