“To thrive, or even just to survive, businesses increasingly need to understand the root causes of what affects their operations, not just the symptoms.” - Dialogue in Expect the Unexpected. KPMG 2012
The Insurance sector:
Globally the insurance sector is becoming increasingly concerned about the implications of climate change on their business, which is already being manifested by increasing weather related losses. The insurance industry has responded to this challenge by primarily focusing on refining its risk predictions and assessments, with a view to more appropriate pricing and contracting of climate change related risks however there still remains a gap between the scale and accuracy of predictions that climate scientists can provide and what is required by the insurance industry.
The case study centres on the challenges experienced by South Africa’s largest short-term insurer, Santam. The objective of this case study was twofold:
1) To understand how changes in the landscape were affecting current and future risk exposure to wild fire, flood and sea storm; and
2) To understand how best the insurance industry could respond to ensure its own viability, as well as build the resilience of the socio-ecological system as a whole.
More information regarding the initial phase of assessment of the case study can be viewed in a collaborative publication with the UNEP Finance Initiative:
http://www.unepfi.org/fileadmin/documents/insurance_changing_risk_landscape.pdf
The Food & Beverage Industry:
This industry sector is reliant on long supply chains, ultimately founded in agricultural production of raw materials. As such this industry is very aware of the commercial risks associated with meeting demand with supply chain management where the input parameters (e.g. water availability and productive soils) are increasingly uncertain and vulnerable. This has lead to leading multinationals such as The Coca Cola Company and SABMiller, conducting water footprinting and watershed risk assessments.
In collaboration with the WWF – SABMiller partnership, the objective of this case study was to examine water-related risks to hops production and to identify suitable water risk management responses that improve the resilience of hop farming operations. The case study undertook to:
1) Provide a comprehensive, integrated and systems (social ecological systems) view of the water context faced by hop producers;
2) Provide a dynamic and future oriented view of water related risk to hop farming operation;
3) Provide practical response strategies that can be taken to reduce water related risk.
More information relating to these case studies are be viewed at the following links:
http://www.csir.co.za/publications/pdfs/Sciencescope-lowres.pdf (Pg 42)
http://www.csir.co.za/enews/2011_mar/04.html
