Danish climate scientist and TV weatherman Jesper Theilgaard has told risk managers from some of Europe’s leading companies that they should not treat climate change as a “Doomsday” scenario. Instead, he said, they should look for the business opportunities in helping to mitigate the possible impacts and make local adaptions to the changing environment.
Theilgaard was the keynote speaker at the Federation of European Risk Management Associations (FERMA) Seminar held in in Brussels on 20 and 21 October. He said: “The biggest risk in dealing with climate change is to treat it as Doomsday and think there is nothing we can do about it. It is very important when we talk about climate change that it is not as a Doomsday scenario but as risks and opportunities.”
Theilgaard gave the Seminar an overview of many inter-related ways that the emission of greenhouse gases is continuing to change the environment from more extremes of weather, higher sea levels, toxic air pollution and the migration of disease agents and crop pests. There are, he advised, certainly enormous risks but also great opportunities in developing long-term mitigation and local adaptations to these changes.
For example, there will be a mismatch between different parts of the world in terms of the supply of fresh water. Today, it is very expensive to supply fresh water in places where there is a shortage. Alternative sources of energy are not new technology, but we need better ways to integrate diverse energy sources into the electrical grid. Such problems can provide opportunities for companies to innovate.
He added, “Another very important area for investment is medicine and fighting diseases and pests as they migrate poleward. We see common tropical diseases like Dengue Fever, West Nile Fever and malaria spreading – and indeed Ebola, as it is now. Insects and other pests are migrating, and our plants and trees are not able to resist. There is great need for investment as we have to be ahead of these changes.”
According to Theilgaard, for much of Europe, increased flooding is probably the greatest threat from climate change, as a result of more extreme storms and rising sea levels. “Europe has a lot of coast line where there are big cities. We are thinking about the effects of climate change now, but we have a large stock of older buildings and infrastructure which has not taken climate change into account” he said. “The infrastructure issue – bridges, roads and railways – is an important one for corporates to consider even if their own buildings are generally resilient.”
Carl Leeman, FERMA’s spokesman on the environment, comments, “The extent to which the business community will accept and promote the shift to a low-carbon economy and see climate change as an opportunity for new business as well as a risk to current models depends on a number of factors. One risk is the uncertainty of the development by the insurance industry of viable solutions to natural catastrophe exposures in view of the concentration of risk inherent to natural catastrophes. There are some special natural catastrophe insurance solutions, but non-physical business interruption coverage is still not readily available.
From the corporate world, we can take various actions. We must further decrease our CO2 emissions, but we should also look at our expansion plans in emerging and non-emerging markets. More precisely, apart from the commercially best location, we should also look at the technicality of that location. Is it a flood area, an earthquake area or a storm area, and act accordingly.
“There is a big role for our engineers and R&D departments who should have a mentality of never stopping to search for more environmentally friendly solutions.”
The increase of natural disasters related to climate change was mentioned in FERMA’s response to the EU Green Paper on the insurance of natural and man-made disasters in July 2013. FERMA continues to argue that large-scale solutions are beyond the capabilities of a single company. A collaborative approach through partnerships that encompasses the major stakeholders, such as public authorities, is key. Coordinated planning rules and access to public data on weather and vulnerable zones across Europe are important. FERMA will continue to take a view in the debate to support innovative solutions and measures to adapt and mitigate the outcome of a changing climate.
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