Scores of people and millions of animals are known to have died in bushfires that have raged across Australia for months. On top of this tragic cost to human life and nature, the cost to the Australian economy could reach as much as $70 billion, once the impact on private property, public infrastructure and tourism is taken into account.
So much of this could have been averted.
In 2018, a study by the Australian Securities and Investments Commission of 60 of Australia’s listed companies found that just 17% identified climate risk as a material risk to their business.
For the first time, the World Economic Forum’s Global Risks Perception Survey shows that climate concerns — extreme weather, climate inaction, biodiversity loss, manmade disasters and major natural disasters — are the top five long-term risks facing the world that respondents think are most likely to occur in the next 10 years.
Natural disasters caused by human ecosystem disruption and climate change already cost more than $300 billion per year. As demonstrated in Australia, left unchecked, these risks have the potential to harm millions of people, destabilize the global economy which relies on nature for jobs and protection from natural disasters worth $125 trillion every year, and leave businesses — and the communities and economies that depend on them — vulnerable to collapse.
The year ahead presents a unique opportunity for the world to de-escalate the risks looming over us. In 2020, governments are expected to step up their commitments to the Paris Agreement on climate, renew their commitments to the environment under the Sustainable Development Goals, agree to a new global biodiversity framework and negotiate a treaty to protect ocean life.
But we can’t take it for granted that governments will do the right thing. The staggering failure of the world’s leading polluters to reach an agreement on reducing carbon emissions at the COP25 climate talks in Madrid last month is a classic example of how too many governments are still hitting the snooze button in the face of our planet’s loudest alarm.
Business has a pivotal role to play to ensure that governments do what’s needed. The historic 2015 climate change conference — where the Paris Agreement was reached — set an excellent precedent, as companies including HP, Intel and Siemens helped build momentum for a deal to be done and numerous CEOs used the summit to announce ambitious commitments to decrease their carbon footprints.
This year business needs to go even further. Business for Nature, a global coalition established last year by a group of leading businesses and environmental organizations, including the World Wildlife Fund (WWF), wants to seize the chance that 2020 presents to secure what we’re calling a New Deal for Nature and People — a comprehensive program to set nature on the path to recovery by 2030. Business for Nature has developed five ambitious policy asks on nature, which businesses must call on governments to support.
Forward-thinking companies can also future-proof their business from the inside, like the hundreds of companies that have already committed to reducing their carbon emissions and shifting to 100% renewable energy. They can drive positive change by investing in the natural habitats where the greatest conservation impact can be had in the regions in which they operate. Investors, meanwhile, must recognize the value of nature and the costs of its degradation, systematically factoring it into their decision-making, as the world’s biggest fund manager BlackRock committed to last week.
The benefits of sustainability are often striking. Research published in 2018 indicates that climate-smart growth could deliver at least $26 trillion in economic benefits through 2030, while a shift to more sustainable agriculture, combined with forest protection, could deliver more than $2 trillion per year.
The costs of action are dwarfed by the costs of inaction, as those companies whose failure to manage the risks they were facing will surely attest. This month marks a year since PG&E, California’s largest utility firm, accumulated billions in liabilities from California wildfires.
As smoke from Australia’s bushfires reaches communities half a world away in South America, it should surely surprise very few that environmental threats now monopolize the risks facing our world. If we ignore these risks, we do so at our own peril.