Legarda: Industries Should Innovate, Go Green to Adapt to Climate Change

Senator Loren Legarda today said that the corporate sector should innovate towards sustainability and green development, or continue to face the growing threats of climate change.

Speaking before more than a hundred advertisers representing different companies, Legarda named industries, such as building and construction, finance, and food and beverage, which are threatened by risks posed by environmental trends.

“In general, climate change affects operating costs, markets for products and availability of raw materials, and the changing weather patterns and extreme weather events could also cause business interruption and infrastructure damage,” she said at the General Membership Meeting of the Philippine Association of National Advertisers (PANA).

Citing a 2013 report of the United Nations Environment Programme (UNEP), GEO-5 for Business: Impacts of a Changing Environment on the Corporate Sector, Legarda said that the increasing temperature of the Earth’s atmosphere, while seen as a threat, should actually promote ingenuity and innovation in the private sector.

For instance, in the building and construction industry, higher material costs due to availability constraints will be a challenge. But there will be a growing demand for green and sustainable infrastructure and buildings that are disaster-resilient.

Green building designs can generate up to 30% in energy savings, reduce carbon emissions by 35%, reduce water use by 30 to 50% and save 50 to 90% in waste output.

Meanwhile, in the insurance industry, a great concern is the increased cost of insurance claims resulting from extreme natural hazards. Re-insurer Munich Re experienced a 38 percent quarterly drop in profit partly due to the severe floods in Australia in 2010 to 2011, when claims exceeded US$350 million.

The industry can adapt by developing insurance products that would promote climate change adaptation and mitigation such as paying claims that encourage rebuilding homes and commercial buildings that are more energy-efficient after a loss.

The UNEP study also showed that the food and beverage industry is likely the most exposed to the effects of climate change because it is dependent on water resources and various raw materials from agriculture, livestock and fisheries.

“Companies should know and make known the risks and how climate change could affect their business. Mitigate and adapt to the changing climate by reducing the company’s negative impact on the environment. Create business strategies that advocate for ecosystems protection and consider the environmental changes ahead. Have a business continuity plan (BCP) that ensures business resilience and the welfare of employees following the impact of a disaster. Mainstream disaster risk reduction into corporate planning and investment decision-making. Work with the government and other sectors in finding solutions,” Legarda explained.

“The changing environmental landscape poses various challenges that would likewise transform the business landscape, but forward-thinking companies will see adaptation as an opportunity to innovate and contribute to improving the environment,” she added.