Nature-based actions within and beyond corporate supply chains can be taken today to boost resilience to shocks like floods, droughts and other extreme weather, explains Urs Dieterich, from the Landscape Resilience Fund
Business climate strategy, much like a Rubik’s cube of choices and challenges, had a whole new dimension added earlier this month, when the Intergovernmental Panel on Climate Change (IPCC) offered a stark warning on the drastic need to improve climate adaptation and resilience worldwide.
To cut through the jargon, most businesses are focused on mitigation – efforts to reduce emissions – in their climate strategies. Climate adaptation, or efforts to build climate change resilience, has now been thrust into the spotlight.
The findings of this report are stark. The world’s top scientists all agree that 3.6 billion people now live in landscapes that are ‘highly vulnerable to climate change’ with the worst impacts ‘strongly concentrated among the poorest vulnerable populations’.
When the UN Secretary General Antonio Guterres says that “adaptation saves lives” and “delay is death”, the world should be poised and ready to take action. Just as many companies have risen to the net zero challenge, there is no time to waste on locking in climate adaptation as a core pillar of a business strategy.
Doing so is not only good environmental or social policy and practice. Early adopters of adaptation strategies are simply being smart: they will be able to secure their supply chains and broaden their social license to operate in the pantheon of climate leaders of the future. But many businesses may feel that the challenges of reducing emissions to net zero are already seismic. Adding another dimension – adaptation – does not have to turn that Rubik’s cube into a dodecahedron horror show, especially for those already on a climate journey.
The good news is that we’re about to see an explosion of innovative solutions geared towards helping us all survive, even thrive, in a changing climate. Businesses have already learned a lot from reducing emissions and many are moving on to nature-based solutions, which have huge adaptation potential.
The new IPCC report is also unique in that – for the first time – it points to specific solutions that show how private companies in particular will play a pivotal role in advancing the adaptation paradigm. It’s time to get cracking.
So, there’s a lot to do, but where to start? Given that over half of global GDP is dependent on nature and its services, there are nature-based actions to take within and beyond corporate supply chains to become more resilient to climate shocks like floods, droughts and other extreme weather.
The key will be working with nature instead of against it. In other words, prioritising farming and forestry practices which build on and mimic natural processes that, according to the IPCC report, ‘support food security, nutrition, health and well-being, livelihoods and biodiversity, sustainability and ecosystem services’.
Against this backdrop, companies can start making investments into adaptation by mapping out where their raw materials come from and helping local suppliers switch to nature-aligned practices. While transitioning to climate-resilient agriculture or forestry does come with initial costs, such as from training farmers, zoning, soil treatment, treeplanting, and reduced yields during the transitioning phase, there is a strong and increasing upside. Ironically, such patient and smart investments – if happening soon enough – will become increasingly profitable the more dire the climate crisis becomes.
Agroforestry creates multiple revenue streams from a variety of crops, only limited by the imagination of the business owner or farmer. From this we see an improved microclimate, greater water storage capacity, and erosion control. All of this diversification creates redundancy and protects against catastrophic losses of crops as well as landslides and fire risk to name a few.
Over time, such resilient systems are likely to outperform conventional methods and yield the high-quality commodities that today’s consumers demand. In a future of extreme climate where large areas are rendered all but unsuitable for agricultural production due to degradation, this could become a major competitive advantage.
Investing in local processing capacity ensures greater value capture and builds a platform for climate-resilient economic development. It also brings more capital directly to farmers and poor communities.
Scaling funding for adaptation continues to be a challenge and only a handful of ventures are currently focusing on this. The Landscape Resilience Fund (LRF) is a truly transformationational initiative in this space. Founded in 2021, the LRF was co-developed by WWF and South Pole, with Chanel coming on board as an anchor investor, to fund adaptation in at-risk landscapes.
The goal of the LRF is simple: fund rural companies and projects that have the greatest potential to protect people and nature in landscapes facing disastrous climate change impacts. From struggling cocoa growers to forest-dependent rattan producers, the LRF provides soft loans, builds local capacities, and seeks to catalyse private investment. All with the goal of ensuring climate-smart ideas flourish into growth businesses as germination cells for landscape resilience.
As the IPCC warns, we must prepare for the massive climate challenges that are yet to come, and we must start learning how to do that, today. There is much work to be done and the first business to grasp the nettle will be able to secure their supply chains while investing in nature and communities that need all the support they can get.
It’s time for businesses to step up their game and begin investing in adaptation.
Urs Dieterich is managing director of the Landscape Resilience Fund.