By Thabiso Rulashe, Strategic and Market intelligence Manager at Santam
From the Caribbean to the Far East, the increasing intensity of extreme weather events has once again thrust climate change to the forefront of public discussion. Just weeks ago, Hurricane Ida completely wrecked Louisiana’s electricity grid in the US, while both Greece and Siberia have struggled to contain wildfires that have had a crippling effect on their local infrastructure.
These events show that the effects of climate change are not just going to be felt in some far distant future by unborn generations. They are being felt now, by the people and businesses of today. It has never been more important to take stock and examine what we can do to fight it.
The Cost of Climate Change:
According to a recent report by Forbes.com, the global cost of climate change could reach as much as $1,3 trillion by the year 2026. That is around R20 trillion in today’s value. To put it another way, climate change could gouge more than 10 times South Africa’s national budget, out of economies across the globe. That is just in the short term. In the long term it is estimated that the global economy could be 37% smaller than it would have been if climate change had not existed.
What We Can Do:
We believe it’s imperative to focus on public-private partnerships going forward. All stakeholders must be committed if we stand any chance of really moving the needle. Here are some examples of ways this is already working:
- Back in March last year, Santam co-hosted the United Nations Environment Programme Principles of Sustainable Insurance (UNEP PSI) 3rd Annual African Market Event at Victoria Falls. The aim of the event was to bring together leaders within the African risk management and insurance ecosystem to share experiences and ideas that can grow a resilient, sustainable, responsible, and profitable African insurance sector.
- Santam Group, together with CENFRI, FSDAfrica, UKAid and InsuResilience, also conducted a climate risk brainstorming workshop for underwriters, climate and risk data experts, development partners and city governments to focus on how to address flood risk in urban cities.
- Santam Group also co-hosted the Climate Change Community of Practice (COP) with C40 cities representatives and other climate change practitioners to share climate change-related information and learn about how South African major cities are adapting to climate change.
- Through our FutureFit strategy, corporate citizens can embed forward thinking approaches into how we can narrow the risk protection gap and grow the business sustainably in the future. It’s critical we’re all working towards shared goals.
- To help at a more grass roots level, Santam Group has also deployed our resident meteorologist to equip our clients with the most up to date climate data. In fact, in one specific example, we put our resources to work to help several farmers in the pecan nut industry in the Northern Cape. In short, climate change trends in terms of temperature were analysed and that information was presented at an information day at Prieska in the Northern Cape. Roughly 180 farmers attended. The meteorologist also published a number of weekly short climate-related communications and held several radio talks. This is a prime example of how companies can put their resources to use on a much more tangible scale.
- Our Partnership for Risk and Resilience (P4RR) programme helps municipalities develop floods and fire disaster resilience through a range of pragmatic preventive measures. The programme has empowered 58 municipalities through improved disaster preparedness, via training and resources.
The point is that climate change and the risks it poses cannot be done on the state level alone. It is critical that members of the private sector involve themselves as best they can in order to help mitigate or potentially avert a climate disaster.
Where to From Here:
It is imperative that all sectors of broader society find ways to reduce their environmental impact if we want to put ourselves in the best position to fight climate change. No matter how small every action counts and if we all start somewhere, we can build a better future for everyone.
Another tool that will help map and track various climate trends over the coming years is the Green Book. Launched by the Council for Scientific and Industrial Research (CSIR), the Green Book is a state-of-the-art online climate risk assessment tool that allows municipalities across the country to assess climate risks and growth pressures up until the year 2050. Through our P4RR, we partnered with CSIR to pilot the Green Book in municipalities that were most at risk of being severely impacted by climate issues.
Follow the (Green) Money:
Perhaps one of the most impactful methods of combatting climate change lies in green financing, which is essentially the practice of investing in sustainable and green businesses. According to Deloitte Almost 400 investors, representing more than US$35 trillion in assets under management (AUM), have signed the Climate Action 100+ initiative, which is committed to pressurising the largest corporate greenhouse gas emitters to “curb emissions, improve governance and strengthen climate-related financial disclosures”.
In a similar vein, the Santam Resilient Fund (SRI), targets investments in companies that address environmental, social or governance needs. To date, the fund has focused largely on investment opportunities that promote clean/green and affordable energy and, as of 31 December 2020 it amounted to R125 million. The fund is managed by Sanlam Investments.
A recent BBC.com article reported that 56% of young people believe that the world is doomed by climate change. That does not have to be the case. Many scientists across the globe are still convinced that there is still time to avert disaster. Moreover, none of mankind’s most enduring accomplishments came from resigning ourselves to our fate. Santam, along with countless others, is rolling up our sleeves and joining in the fight to save our planet. If we all fight together, there is no telling just how much we could win.
