Climate ChangeD.

17 Jul 2017|Added Value

Climate change has been a topic of interest and concern for over a decade. In 2006/07, Al Gore’s disquieting film: ‘An Inconvenient Truth’ along with Nicholas Stern’s calculation of the monumental cost of climate change, shook people out of their apathy. Initially, people felt overwhelmed by the immensity of the task. But slowly, a group of pioneering individuals and businesses began to put strategies in place to lower their carbon emissions by rethinking transport, shortening supply chains, revisiting production practices, dematerializing, reducing energy consumption and cutting waste. They quickly discovered that many of these initiatives improved quality of life and reduced costs, thus encouraging them to double down on their efforts.

Unfortunately, certain passive businesses and governments have taken much longer to climb on board. Some have succumbed to simple inertia while others have fallen prey to misguided ideologies or ‘fake news’ calling climate change into question, often financed by fossil fuel interests.

The reality is that the climate has already begun to change. Each of the 16 years of the new millennium has surpassed the previous year for the hottest temperature on record. Our seas over the past decade have risen at double the rate of previous years. South Florida and Bangladesh are seeing the most immediate impacts, but projections put cities from New York to Accra at risk in the next twenty years. It’s no surprise, then, that Trump’s recent withdrawal from the Paris climate Agreement has prompted such overwhelmingly strong condemnation from all but the most retrograde local governments, citizens and businesses across the US and the world. Importantly, some of the world’s biggest financial advisory firms and fund managers are beginning to speak up, as seen in the unprecedented vote by Vanguard and BlackRock against Exxon Mobil on a recent shareholder resolution demanding greater climate disclosure.

Today we can no longer restrict our focus to just stopping climate change. The question ‘what happens if?’ is now necessarily coupled with ‘what happens when?’. Brands and businesses thus require a 2-pronged strategy that includes both prevention and adaptation.

Below are but a few examples of how smart companies are adjusting to this new paradigm: innovating to adapt to inevitable climate change while also putting in place strategies to prevent or even reverse its effects.

Jackson Family Wines, best known for its Kendall-Jackson Chardonnay, sees the future… and it is drier and hotter than ever before. As a result, one of the largest family-owned winemakers in the US has put a strategy in place to adapt to sharp decreases in rainfall. At Jackson’s winery, newly dug reservoirs are connected to a gravity-fed drip irrigation systems that pull water downhill and through the vineyards. Drones detect moisture by monitoring changes in leaf color to assess the need for irrigation, while a solar powered weather station anticipates cold spells, launching wind machines that circulate warm air to protect the vines. New rootstocks are being planted to go deeper for water. Owls are on hand to naturally prevent swallows and crows from eating early-ripening fruit before harvest. Chardonnay blending tanks are sanitized with ultraviolet light instead of water. And, in recognition of California’s serious water security issues, the family has chosen to expand northward, recently purchasing three wineries in Oregon.

Munich Re: The insurance sector is no doubt one of the most directly affected by climate change, and so best placed to talk about it. Yet, according to Mindy Lubber of Ceres, “despite the fact that they are on the front lines of extreme weather events, insurers are still giving the issue short shrift.” Not Munich Re. This company first warned about planetary weather changes in 1973 and immediately put a Geo Risks Research Department in place to study the subject. Half a century later, their prescience is notable.  In 2016, climate-related natural disasters represented nearly 85% of all global insured losses.

Munich Re continues to leading the charge to both address and adapt to this situation. They offer risk management solutions for the full spectrum of natural disasters; they have recently developed micro-insurance products to shield farmers in poorer countries against weather losses; and they are a leader in insuring clean-fuel projects that will help to prevent future temperature rises.

Danone Wave: Agribusinesses, meat and dairy farming in particular, are significant contributors to climate change. Livestock is estimated to contribute 15% of global greenhouse gasses. This is because cattle emit methane when ruminating and this gas has 24 times the warming effect of CO2. A recent call to action from 40 investment companies urged agribusinesses to begin the transition away from meat and dairy. Danone is one company that has heard the call, as demonstrated by their recent acquisition of the plant-based company WhiteWave. Emmanuel Faber, Danone’s CEO explains this move as a means to “leverage consumer trends and expectations for healthier and more sustainable eating and drinking choices”. Danone is also working to build resilience into their food and water cycles by actively partnering with smallholder farmers, training and supporting them in modified tilling techniques to better sequester carbon in the soil and planting of certain cover crops to reduce the need for fertilizer.

Unilever is another company that has been paying close attention to the impacts of climate change. They know their growth will come from countries experiencing water shortage and are proactively seeking to address this reality.  In 2016, they launched Sunlight 2-in-1 Handwashing Laundry Powder in South Africa, a country which is experiencing its worst drought in over 30 years. The product includes SmartFoam technology to reduce the need for rinsing which represents up to 70% of water usage. The campaign included raising awareness and water saving education for local residents. A similar approach was used in India – another country experiencing severe drought – In the US, Unilever’s Dove brand took a different approach, partnering with and cross promoting Delta Faucet Company at Lowes to promote the sale of water saving showerheads while promising a better shower experience.

In their new book, Climate of Hope, Michael Bloomberg, Entrepreneur and Former Mayor of New York and Carl Pope, lifelong environmentalist and former Executive Director of the Sierra Club, remind us that the best way to reach climate skeptics is for more people to tell climate success stories.  The book talks about how taking action makes us healthier, extends our lifespan, saves us money and creates jobs that strengthen our economy. This isn’t just wishful thinking. The innovation section of this month’s newsletter highlights ten inspiring examples of how new technologies and creative ideas will make it easier for the above and other companies to continue down the climate prevention/adaptation road.

Many solutions have already been identified; others are close at hand. So rather than wringing hands we should all be rolling up our sleeves and getting to work.

Written by Leslie Pascaud, Executive Vice President Branding and Sustainable Innovation, Teiko Uyekawa, Steven Ebert, Kantar Added Value

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