FEATURE: Sustaining African businesses in a changing climate
Stanley Ijeoma of Schrodinger Limited – Abuja says the time is right for African businesses to manage for climate risk – and report on it.
Climate change adaptation is an area of growing concern for many developing countries as a result of the uncertain effects of a changing climate that pose significant barriers for development, especially as it affects achievement of the Millennium Development Goals. Therefore the challenge for Enviropreneurs like mine is to develop specific adaptation and mitigation measures, with focus on the ones that meet Africa’s most urgent and immediate needs because of the realisation that, in the long term, climate change adaptation needs to be supported by an integrated, cross-cutting policy approach.
The “Inconvenient Truth” is that climate change is already radically transforming the global socio-economic landscape, spraying threats and opportunities along its pathway as each and every organisation and business is bound to lose or gain some value from the climate change impacts that confront us daily. Even though the global trend has seen an emerging coalition of interest groups including consumers, shareholders, stakeholders, investors and regulatory agencies piling on the pressure of making the task of climate change risk assessment an increasingly important component of modern day strategic business planning elsewhere, this is yet to become a recurring fixture in the schedules of African corporate executives of public and private companies as we transit towards low carbon global economy.
I am of the opinion that African businesses that previously have not considered the types of business risks associated with the threats of climate change might need to be encouraged to do so to determine whether their businesses are susceptible to any such risks and, if so, whether those risks are of a sufficient magnitude to require compulsory regulatory disclosures.
Integrating environmental responsibility into the “DNA” of African businesses is essential if we are to continue to grow the African economy and create limitless opportunities for achieving profitability in a fast emerging low carbon global economy characterised by a changing global climate that will require massive investments in low-carbon programmes and technologies. Unfortunately, not many African businesses already recognise these emerging challenges and are very far from incorporating them into their overall corporate planning so as to strategically position their businesses to maximally reap from emerging “green” opportunities. Therefore it has become imperative that “climate risks” be assessed by African businesses during strategic planning because climate change is already affecting the political, social and economic context within which commercial decisions are made and this is what I want to highlight here so that experts in business sustainability elsewhere who feel a sense of urgency and passion for Africa can contribute their knowledge to help a continent with low capacity to deal with the consequences of climate in all its ramifications.
Africa should be carried along this global trend and must not be left behind because most of the projected future global economic growth is set to take place in developing countries of which Africa is very strategic and allowing climate change to wash away these potential gains would be dangerous to the economic empowerment of millions of Africans who are already enduring climate change induced food crisis. The current famine in parts of Africa has already been declared a global emergency by the United Nations and other multilateral organisations.
The United States of America’s Securities and Exchange Commission [SEC] has already taken a bold step in the direction of environmental responsibility with a clarification of existing regulatory requirements that may affect how companies track and report climate change business impacts, by issuing “Interpretive Guidance on Climate Risk to Business” on February 2, 2010. While this initiative is not technically a change in law, the Interpretive Guidance [IG] is widely seen as the future of the global business environment because it is expected to push the case for those seeking greater transparency in companies’ quarterly and annual reports on climate change impacts analyses as well as ecological footprint of businesses-some kind of environmental accounting. This means that in the coming years, the parameters used in judging a successful business or organisation will not be restricted to “financials” alone but also “Environmentals”. But we need to build capacity of African regulatory authorities to be in tune with these emerging scenarios because the US SEC “interpretive guidance” represents the direction to be threaded by a rapidly evolving regulatory landscape primarily affecting companies with significant carbon footprints.
The extent of success here will depend on how African Enviropreneurs are supported by their colleagues elsewhere to discharge their very strategic obligations as we transit to a global low carbon economy. The time for action is now and change agents all over the world are invited to join me in this crusade of helping African businesses to respond to the demanding challenges of our time, indeed the greatest challenge to development and prosperity for all Africans: climate change!
Mr Ijeoma represents Nigeria on the World Council for Renewable Energy. His article first appeared in Schrodinger Nigeria’s green blog.
Occasionally, CDKN invites guest bloggers from around the world to share their views on climate compatible development. These views do not necessarily represent those of CDKN and its Alliance partners.
Image: construction work, Nigeria, courtesy World Bank.