Businesses are urged to build resilience to climate change impact…. Africa: A hub for innovation

Businesses are urged to build resilience to climate change impact…. Africa: A hub for innovation

HARARE, The likely failure of efforts to meet internationally agreed targets for global warming require businesses to act now to adapt to the risks related to climate change. New report from Zurich outlines risk management recommendations for companies to best respond, and is released as Climate Week NYC begins.


With measures to slash greenhouse gas emissions set to miss their mark, businesses should act now and prepare for a changing climate, according to a report by Zurich Insurance Group (Zurich). Published ahead of Climate Week NYC, a gathering of investors, governors and CEOs in New York this week, it recommends a three-step strategy to help companies strengthen their defenses.

The report, ‘Managing the impacts of climate change: risk management responses,’ provides risk management tools, and outlines approaches and best practices to help businesses respond to the growing threat of climate change.

“Our analysis suggests that the current level of efforts to keep global temperatures from rising over 2-degrees Celsius above pre-industrial levels will likely fail, so businesses should prepare for the physical consequences of a warming planet. Companies must know the magnitude of their climate risk, so that they can prioritize actions based on their particular circumstances,” said Alison Martin, Group Chief Risk Officer and Member of the Executive Committee. “It’s crucial for businesses to develop a climate resilience adaptation strategy and act on it now.”

The report examines two scenarios: one based on the failure to act on climate change, resulting in a steady rise in temperature and rising physical risk; the other assumes that effective measures are taken to reduce carbon emissions, with increasing transition risks to be managed in the shorter term.

It also details three steps companies can follow to develop a climate resilience adaptation strategy:

  • Identify the broad business and strategic risks;
  • Develop a granular view of the risks including individual locations;
  • Develop a mitigation strategy involving insurance and resilience, as well as strategic implications for business models.

Scientists agree that climate change will likely lead to more intense hurricanes with higher rainfall amounts and rising sea levels, which will result in more dangerous storms surges and flooding. As a risk management expert, underwriter and investor, Zurich understands the risks of climate change and supports the transition to a low-carbon economy.

Ms. Martin said: “At Zurich, we encourage building more resilient critical infrastructure, which can help our customers and governments adapt to climate change. We firmly believe in prevention as the best form of protection. Adaptation costs for climate change effects may be significantly lower than damage costs. For example, through our Flood Resilience Program, Zurich has demonstrated that every dollar spent on flood prevention measures on average saves five dollars on recovery efforts should a flood event occur.”

Ms. Martin said she hoped the Zurich paper can provide the necessary guidance for businesses to address their exposures to climate change risks.

Zurich Insurance Company

Africa: A hub for innovation

HARARE, With a population of more than 1.2 billion people, 54 countries, and foreign direct investment (FDI) totalling $59 billion in 2016, Africa presents organisations across industry sectors with ample business opportunities. Annalie Terblanche, product manager at SilverBridge Holdings, says that although the continent has long been viewed for its potential, the rate of technological innovation in recent times has seen it attract even more interest.

“Africa is well-known for its infrastructure challenges especially when it comes to fixed-line connectivity, reliable electricity, and access to drinking water. However, people across the continent have long embraced a culture of innovation to overcome these. An example of this is the growth of mobile telecommunications for more than two decades. Mobility has become synonymous with Africa as people and organisations are using it to address their accessibility needs,” she says.

So, even though fibre has become a key development priority in cities and urban areas, those in rural communities have come to rely on the likes of 3G and LTE to access services. And given the investment mobile operators are making across the continent to ensure reliable and high-speed access, even those living in highly populated areas are often opting for this as their preferred method of access.

Changing requirements

“It is in this age of innovation and mobile growth that entrepreneurs are starting their businesses. Many are receiving investment from several local and offshore sources. The way these start-ups are approaching business problems given the limitations of their physical environments, make them good value for international investors who are searching for people who can think out of the box.”

At a time when there is a sizeable unbanked population across the continent, circumventing the need for traditional accounts have resulted in a reliance on prepaid vouchers to buy anything from goods at informal markets to insurance and healthcare. This also provides financial services organisations with the ability to create business growth in previous untapped markets.

Granted, cash transactions are still part of the reality of doing business in Africa. But thanks to the increasing popularity of mobile money solutions like MPesa, customers (and insurers) have a viable alternative. It brings those without bank accounts financial inclusion in a broader ecosystem that was not possible before. Mobile money is much safer than carrying cash. Furthermore, it reduces a lot of the overhead and administration costs of managing cash for insurers and give them a more effective way to collect premiums. By better enabling users to manage their funds, additional benefits are unlocked. These can include anything from earning interest on savings to access micro-loans.

The continent has unique requirements spread across each of its 54 different markets. What works in one country will not apply to another. Companies must work closely with local partners to ensure they understand the dynamics of those areas in which they want to get involved in. This approach will not only highlight the innovative start-ups that are driving trends in those markets, but it will also enable businesses to better manage their strategic objectives.

“Yes, there are still significant obstacles to overcome in Africa. Even so, the excitement of working in such an open environment where the possibilities are limitless is too good to resist. Businesses are looking towards this more agile approach and following suit with their own enhancements to better meet the needs of those in the continent,” she concludes.

Silverbridge Blog