Prioritizing Climate Resilience During COP27
The next decade is a critical moment in history: a turning point to establish the policies and investments necessary to limit the global average temperature to the Paris Agreement goal level of 1.5 degrees Celsius. It’s also a critical moment to begin to adapt to a warmer world.
Rising global average temperature is associated with widespread change in weather patterns, as evident by the recent extreme climate events impacting countries around the globe. In the face of such disasters, such as the historic flooding in Pakistan and Nigeria, or devastating hurricanes throughout North America and the Caribbean, there is a tendency to focus on recovery rather than risk prevention.
Recovery is obviously critical, as extreme weather is expected to continue to occur in today’s already-warmer world. Incidents like heat waves and large storms often cause illnesses and loss of life, disrupt essential services, and lead to population displacement, especially among vulnerable populations. But resilience and preparedness are an equally important – though often overlooked – aspect in the fight against urgent climate risks.
BCIU member Marsh McLennan highlighted this topic during the United Nations Climate Change Conference (COP27) which takes place in Sharm El Sheikh, Egypt, November 6 – 18. As a supporter of the Race to Resilience and the headline sponsor of the Resilience Hub, Marsh McLennan is collaborating with the UN to increase the level of ambition and finance given to building resilience.
Race to Resilience
The UN has two major initiatives at COP27, the Race to Net Zero and the Race to Resilience. The UN Race to Resilience is a global initiative to encourage non-state actors to help vulnerable communities build resilience to the physical impacts of climate change, such as extreme heat, drought, flooding and sea level rise.
Climate adaptation will be a future necessity, as even in a 1.5 scenario, the environment will still be volatile, exposing vulnerable communities to climate shocks. In general, the current procedure surrounding climate events is focused on recovery and rebuilding communities after disasters have already occurred. In fact, according to a Congressional Research Service report on the FEMA Disaster Relief Fund, only seven percent of funding from 2010 to 2019 was spent on mitigation.
“The status quo fails to prevent severe hardship for many individuals and traps communities in a cycle of recovering from the last disaster and failing to invest in preparations for the next,” says Francis Bouchard, Managing Director of Climate at Marsh McLennan.
What does climate resiliency look like? In urban areas, it means healthy spaces that support resilient livelihoods and allow for green recovery post COVID-19. Rural areas need to be more adaptive while protecting nature, with agricultural supply chains equipped to thrive in the face of climate change. It is necessary to increase investment to safeguard coastal areas in order to both protect communities and the natural ecosystems that support livelihoods and economies.
“There is ample opportunity for creative solutions in climate adaptation to mitigate the worst consequences of climate change and rebalance efforts toward proactive adaptation,” Bouchard says.
In a resilient world, both the population and nature don’t just survive climate shocks – they thrive in spite of them. Building climate-resilient communities, however, hinges on a series of factors, including finance and investment, disaster risk management, and community-level adaptation strategies, among others. In other words, marrying adaptation and mitigation.
The Role of the Private Sector
It’s important to note that Race to Resilience initiative is focused on non-state actors. The private sector is a key partner to government and communities in advancing mitigation, financing, and adaptation for climate change. On average, every dollar spent on pre-disaster risk reduction saves six dollars in damages. There is an opportunity here to align economic and social interests: Analysts at Bank of America estimate the climate adaptation market to be worth $2 trillion per year by 2026.
“Our hope is that with a greater understanding of the insurance industry’s role, we can advance solutions that usher in a new era of climate risk management,” Bouchard says.
Companies, especially those within the insurance sector, are uniquely positioned to embed climate change strategies into every aspect of their businesses. The sector, which already works to understand and incentivize risk reduction behavior, is equipped to drive transformation through risk financing, risk analytics, impact investing, strategic philanthropy, and stakeholder engagement. That’s why Marsh McLennan will help mobilize the insurance sector in support of the Race to Resilience initiative by championing the disaster risk reduction initiative, a campaign that features 17 projects that are redefining the role of insurance in global disaster planning.
Establishing risk-aware, climate resistant communities will rely on collective action focused both on adaptation and mitigation. But this also presents a wide menu of solutions for stakeholders to create their own best methods for impact to help build a more resilient world for all.