The transition towards a low-carbon economy is as urgent as ever. 2018 was the fourth-warmest year on record, and climate change is multiplying the frequency and intensity of extreme weather events, with devastating effects anytime typhoons, floods, heatwaves, droughts, or wildfires are recorded. Tragically, more than 11,000 people lost their lives in the catastrophic events of 2018, and Swiss Re Institute reinsurance company estimated around 155 billion dollars of global economic losses due to natural and human-made disasters.
Climate change was among the hot topics at the World Economic Forum Annual Meeting, which took place last week in Davos, Switzerland. Large-scale changes from governments, companies and individuals were solicited by most speakers, highlighting the need to establish stronger public-private partnerships to tackle the environmental issue more effectively, with time-intensive programs.
Among the measures, the financial and business community favoured, particularly interesting is the possible introduction of a new tradable asset class to better support large infrastructure projects in the low-carbon economy spirit. By improving transparency, it could allow traders to accurately evaluate the potential effects of adverse climate and attract investors towards long-term resilience-building options.
Promoting a sustainable economy is also essential. Organisations committed to zero-emission policies, energy efficiency and responsible waste treatment need to be encouraged and supported, as they highly contribute to mitigating climate change consequences. An improved risk-based, consistent regulatory framework for environmental, social and governance (ESG) investments was extensively debated in Davos, as it could strengthen the relevance of sustainability in corporate finance decisions.
However, in the worldwide effort to improve resilience, businesses have to play their role, first of all by minimising the environmental footprint of products and processes, but also by accelerating their preparation to face natural disasters or critical occurrences. This starts with the implementation of crisis monitoring tools to early detect adverse events and possibly defuse emergencies before they turn serious.
Only if planning crisis response in advance, and efficiently orchestrating it in action, organisations can react to undesired events – and relieve the burden on government budgets for post-emergency support.