Hurricane Sandy, which struck the North East coast of the United States in late October 2012, is estimated to have caused $30 billion (£19 billion) to $50 billion (£30 billion) of economic losses making it the second costliest storm in American history. In comparison to the UK’s Great Storm of 1987, which was estimated to have cost the insurance industry £2 billion, Sandy is expected to cost £6-12 billion. Effects from the hurricane were felt around the world, including India, which suffered from subdued financial and business trading resulting in a depreciated rupee.
Much of the American media is now recognising the correlation between climate change and the increasingly severe weather events occurring across the US. Businesses are no longer in a position to ignore such risks; but it is clear that no one industry sector can tackle climate change alone. For some industry sectors, these catastrophic events will present the opportunity to respond with foresight, commitment and collaboration. Cross-sector partnerships are now a readily used mechanism to address global issues, combining multiple perspectives, expertise and skills. These partnerships not only help to cross the boundaries between traditionally opposing sectors, but fundamentally have the capacity to build long term sustainable solutions to social and environmental challenges.
How do businesses adapt and collaborate?
To achieve systemic change, business will need to collaborate with governments. For example, Governments of Least Developed Countries (LDCs), at the 2011 UNFCCC Durban Conference, adopted the Private Sector Initiative (PSI) of the Cancun Adaptation Framework which seeks to catalyse involvement of the private sector in the National Adaptation Plans for Action. But, cross-sector engagement at this scale is never a smooth process. Unique skills are needed to ensure benefits of combining public and private sector strengths, and not be stifled by the practical realities of conflicting organisational cultures and priorities.
At a smaller scale, cross-sector or business-to-business collaboration can increase business’ understanding of the potential impacts of climate change and to pursue the need for innovation. The Partnering Initiative has set up the Business Innovation Facility, a DFID sponsored initiative to support the development of inclusive business models, offering practical support and a community of cross-sector practitioners for businesses seeking innovative ways to address climate change.
It is clear we can expect more unpredictable and severe weather events. As the costs of these inevitably rise, it may be the much-needed wake-up call for more businesses and organisations to pool efforts, innovate and collaborate through cross-sector partnerships.
By Jessica Scholl, Programme Manager of The Partnering Initiative