I remember 2014 as the year of climate science. The unfolding of the IPCC Fifth Assessment Report, and, in the US, the publication of the National Climate Assessment and the first Risky Business report brought to new levels our collective understanding of how devastating climate change would be for human and natural systems.
2015 saw growing recognition of the economic risk brought about by climate change – coming not just from the community of dedicated climate activists that have been raising the alarm for years, such as C2ES, Ceres’s Investor Network on Climate Risk (INCR), and the CDP, but this time coming from the world’s largest and most influential financial players.
A few key reports stand out: Mercer’s study on Investing in a Time of Change, Standard and Poor’s warning of climate change impacts on corporate and sovereign risk ratings, and Bank of England Governor Mark Carney’s famous speech on the “tragedy of the horizons.” All these studies, punctuated by a slew of catastrophic extreme weather events across the globe, point to the devastating systemic costs to our economies and our communities if we do not better prepare and adapt to climate change.
This alarm is starting to turn into action and concrete steps. Just in the past weeks, the Financial Stability Board, also headed by Mark Carney, announced an industry-led task force headed by Michael Bloomberg to develop voluntary, consistent climate-related disclosures in financial markets. The United Nations announced a private sector Working Group headed by private equity firm SigulerGuff to mobilize private sector investment in climate adaptation and resilience. The United Nations Global Compact and Caring for Climate launched a report providing concrete guidance and a conceptual framework on how corporations can adapt to climate change while helping reduce social and environmental vulnerability. What these initiatives speak to is the need for standardization in how we measure, quantify and disclose climate change risk.
In the public sector, Governments have a key role to play in supporting private sector-driven initiatives to build social resilience and grow technological and financial solutions. 2015 saw governments treading new waters with regard to climate risk and resilience. In California, Governor Jerry Brown issued Executive Order B 30-15 directing state agencies to identify vulnerabilities by sector and to infrastructure and property. The City of San Francisco established the first-in-the-nation mandate to assess infrastructure risk posed by sea-level rise, promptly echoed by a similar mandate from President Obama for all federal agencies. The White House also worked to empower and challenge the private sector to develop new data-driven tools for climate adaptation through the Climate Data Initiative. And finally, the Paris agreement negotiated during COP21 includes extensive provisions to finance and implement climate adaptation measures.
The challenges ahead of us remain tremendous – deepening our understanding of how to best forecast and quantify social and economic impacts of climate change, measuring progress towards resilience, developing common metrics of success are only the very first steps towards bridging the adaptation gap. I believe 2016 will see critical new developments to help the world prepare and adapt to climate change. We’re ready for the challenge.
Emilie Mazzacurati, December 18, 2015.