Historically, companies lost money as a result of the weather, sometimes a significant percentage of their profit margins, and it was generally accepted that there was little to nothing they could do about it. But recently, the outlook has changed, and there is an unprecedented increase in the number of companies who insure, or are about to insure, against the consequences of unfavourable weather. Long confined to the ranks of fate, the consequences of weather on a business’s profits are now manageable like all other risks. Many understand and welcome this development, while others struggle.
Over the last ten years, we have met many business leaders, treasurers, CFOs and marketing analysts seeking to better understand the vulnerability of their business to the daily vagaries of weather. In most cases, the a priori assumption was that whilst weather was affecting sales, production costs, yields, prices or results, it was an external factor not worth attention, investigation or the allocation of resources. Whether the agricultural sector, manufacturing, transport, tourism, retail, mining, or beverages, the conclusion was always the same: these companies had always lived with the weather, and accepted its effects, and there was no reason to change that.
DOI: 10.15200/winn.145881.12906 provided by The Winnower, a DIY scholarly publishing platform
Where government have failed and the private sector remains oblivious, new voices propose innovative solutions ahead of Cop21
Is your company prepared for the consequences of climate change in 2100? Even in 2050? Of course not. Annual reports and five-year planning cycles do not contemplate such timelines, any more than the profit-rewarding bonus system of the c-suite does. However, the private sector continues to be inundated with reports and studies providing projections for events that may affect enterprises in this distant future, themselves based on current projections of macro-trends. These terrifying but irrelevant (and unreliable) statistics are of little use to the current planning cycles of the average business, yet the public sector is providing them in the hopes that the private sector will be motivated to step in and take the lead in responding to climate change, making the practical and timely changes that cumbersome and intractable bureaucracies have not been able to do. We now have the tragedy of the commons meets the tragedy of the timelines.
However, where governments and international bodies have missed the mark, and the private sector remains struggling to understand its role, a dark horse has emerged in the climate change crisis. Weather risk management specialists reveal the relevant data, the financial consequences and the risk management solutions that could finally successfully join the public and private sector together in the fight against climate change and make an international agreement within our grasp. The only question now is, is it too late for Cop21?
DOI: 10.15200/winn.144361.10683 provided by The Winnower, a DIY scholarly publishing platform
In just over 200 days, France will be hosting the 21st session of the Conference of the Parties to the United Nations Framework Convention on Climate Change. Politicians will try to find solutions to keep global warming under +2°C by the year 2050. The objective is abstract. It is also a long way away. Since there is no “global” government, COP 21 is likely to end with no more than a list of good intentions. Firms however are “global”. What if we approached COP 21 in a different way this time?
In March 2015, the average temperature across global land and ocean surfaces was the highest in the 1880–2015 record, surpassing the previous record of 2010. In fact, the temperature in the first three months of the year was also the highest in the 1880–2015 record, surpassing the previous record of 2002 . Since 1992 in Rio de Janeiro, conference after conference, politicians and lobbyists have tried to engage economic actors into new ways of working to stabilize the climate.