Storm clouds ahead for businesses that ignore climate risks
Thomas Ho says businesses that fail to prepare for the disruptions caused by global warming will simply lose competitiveness - and customers
The World Bank's latest "Turn Down the Heat" report unfolds like a summer horror film. Bangkok is 40 per cent submerged. Philippine fishermen struggle to achieve half their normal catch, while Vietnamese rice farms are flooded with salt water. Coastal Asia's favourite tourist spots are ravaged by storms, its cities are seared by heat and its citizens compete for a shrinking food supply. The main culprit? Climate change.
In response, World Bank president Jim Yong Kim vowed to conduct his core business - poverty alleviation - through a "climate lens". I suspect most other businesses will soon need to do the same. But has this realisation sunk in?
Most climate discussion to date has focused on mitigation or prevention. Responding to public expectations, regulator demands and energy prices, a growing array of businesses are taking action to improve energy efficiency and reduce carbon emissions. Considerably less attention has been paid to adaptation, or preparing for climate volatility.
Preparation - or building resilience - is essential.
The World Bank report amounts to just the latest in a series of red flags. Temperatures, sea levels and frequency of extreme weather events are rising at an ever-increasing rate. As the pace of change accelerates, so will the consequential costs.
Asia's geography makes it particularly vulnerable. Weather-related disasters have more than tripled in the region over the past 30 years. Populations and investments are concentrated near coastlines, increasing their vulnerability. And o nly 6 per cent of Asian assets are insured.