Climate Change: Business is sitting up, taking note and taking action

16 September 2009 Santam

Dylan Thomas’ famous words of ‘Do not go gentle into that good night/Rage, rage against the dying of the light’ in some ways sum up a growing groundswell of interest and action on the part of business as it squares up to the enormous and pervasive challenge of climate change. That much was evident as the second day of the Ecocentric Journey Conference, hosted by Santam, UCT's Centre of Criminology and Partners for Change, got underway in Cape Town. The dying of the light in Thomas’ poem is allegorical with the reality of a warming planet; business is demonstrating that it will rage against it.

In his opening address, Johan Strümpfer, of Partners for Change, noted that even a complex assessment of the many, many factors which affect and are affected by climate change tend to amount to nothing more than an oversimplification. “In climate change, we are faced with complexity which cannot be dealt with effectively. But the bottom line is that what we have right now is an earth system which has a fever. The earth is sick; in the same way as the body reacts to pathogens, it is raising its temperature to uncomfortable levels to force action or change,” said Strümpfer.

The illness? “There are too many people thinking and living like we do.”

Delving into what he calls the hierarchy of beliefs which form the basis of dealing with climate change, Strümpfer said strategies can be formulated around the following assertions:

  1. That climate change is happening (although this is not universally accepted).
  2. That humans are causing it (which takes an inductive leap; while some say it is a natural phenomenon, the bulk of scientific evidence supports human activity as the cause).
  3. That society and the general way of living are reliant on activities that cause climate change.
  4. That responses to the issue require a change in how we think, what we value and how we act.
  5. That humans need to have a very different set of value systems if we are to deal with climate change.

“The point it that the way we think and believe is critical in maintaining the system that causes climate change,” Strümpfer stated.

That should provide ample insight into the enormous magnitude of the problem and the potential solutions. Change is not easy, despite the fact that it is a constant. “Even general business changes which happen in the normal passage of time have the capacity to force business to do things fundamentally differently,” said Strümpfer. To give an idea of the size of climate change as a business challenge, he plots ‘normal change’ at centimeter high on a graph. On the same scale, Strümpfer believes climate change would measure 100 metres or more. “If even the small ‘normal change’ with which companies must deal is enough to keep managers busy, the massive scale of the issue is apparent.”

Given that, as in many other vertical industries, expectations for the future are based on evidence from the past, Strümpfer said a real problem is presented for insurers. “Actuarial calculations are based on historical data; it is increasingly apparent that now, they cannot do that. The basis of risk rating has to shift to models based on climate and derivative models. A new philosophical framework and toolset is required. The change is of such magnitude that it is not yet appreciated by the actuarial or insurance industry,” he said.

Many other professions, too, will have to shift from the philosophical bases from which they operate today.

“The change required is radical; it is a transformational change: The whole world needs to think differently – fundamentally differently. The value systems have to change. Climate change is in itself complex,” Strümpfer stressed.

But he believes it can happen. “The growing interest and action that is being taken by businesses, like Santam, bodes well. Given the nature of their business, short term insurance is a key pivot in moving towards action and can have a knock-on effect on society. The task is huge, but through a systems approach and by personally changing our habits and ways of living, we can make a difference.”

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