Private Sector Initiative - Showcasing good practice

Partners of the initiative are already carrying out significant work on adaptation. Fifteen stories of how business can help the poor adapt whilst increasing profitability.

  1. Allianz Group: Insuring against climate impacts and rewarding sustainable business practice

  2. BASF:  New technologies for climate change adaptation

  3. Caisse des Dépôts: Climate-proofing infrastructure 

  4. Cisco Systems: Improving governance through technology 

  5. Deutsche Post: Responding to disasters 

  6. International Union of Railways: Climate-proofing future investments

  7. McKinsey & Company: Learning about the economics of adaptation 

  8. Munich Reinsurance: Building alliances around climate insurance 

  9. Ricoh: Conserving forests 

  10. Sagawa Express: Climate Savers

  11. Siemens: Developing adaptation technology

  12. Sompo Japan Insurance: Providing weather index insurance in Thailand

  13. Suntory: Conserving water resources

  14. Thames Water: Adaptating business operations

  15. Veolia Environment: Advancing climate knowledge

Allianz Group: Insuring against climate impacts and rewarding sustainable business practice

Allianz have developed a number of adaptation-related products

  1. Insurance: Allianz first flood catastrophe bond global part of a USD 1 billion programme to mitigate the risk of severe, regional floods across a global fund. Eco-package Hungary, US a reduction in the premium for corporate property insurance when environmentally friendly products or materials are used.

  2. Micro-insurance: In India, Bajaj Allianz launched its first microinsurance product in 2003, and went on to cover more than 100,000 customers. The humanitarian crisis which followed the tsunami in 2004 prompted Allianz to team up with CARE International, an organization with extensive experience in microfinance in India. The partnership is focusing on providing tailor-made packages specifically for people who live near the coast and work in fishing, agriculture and plantations. In Indonesia, they are teaming up with GTZ to offer a microinsurance pilot product, Paying Keluarga (meaning family umbrella). In Egypt, Allianz have worked in collaboration with Planet Finance, Surety Fund and a number of European reinsurers to develop a pilot project offering death and disability insurance to more than 30,000 customers.

  3. Eco Trends Fund: The global fund invests in renewable energy, environmental protection and water enhancement projects. Approximately 20% of the fund assets are invested in emerging economies. As of June 2007, Ł938 million was under this fund management.

BASF:  New technologies for climate change adaptation

Coastal protection against floods:  BASF is aware that in many parts of the world, climate-related flood disasters cause devastating damage putting thousands of peoples at risk. The consequences of such disasters are not only flooding but also the loss of land. The regions at greatest risk are already raising the height of many of their dike systems to as much as 9 meters. BASF is offering an innovative and environment-friendly solution to provide effective and stable coastal protection. Through a specially developed elastomer polyurethane system (Elastocoast) dikes are protected by absorbing the force of the breaking waves and slowing down the water masses.

Plants with higher stress tolerance:  Environmental factors like heat and cold often determine the quality of the harvest. Climate-induced more extreme weather conditions can put plants "under stress", so that they don't provide the expected yield. That why BASF's researchers are developing stress-tolerant plants that are more resistant to extreme weather conditions such as drought. This is to optimize crop plants such as corn, soy and wheat.

Reforestation through promoting sustainable development:  BASF initiated the foundation Espa§o ECO (Brasil) in cooperation with GTZ. Espa§o ECO focuses on promoting sustainable development by transferring knowledge and technology, especially through the implementation of solutions in eco-efficiency, environmental education and reforestation. Currently, superabsorbers are being trialed for a reforestation project in the Brazilian rain forest. These superabsorber polymers have an enormous water absorption capacity and can effectively store it in soil, thereby increasing water storage capacity.

Caisse des Dépôts: Climate-proofing infrastructure

In 2008 Caisse des Dépôts has launched an international research programme on adaptation focussed on designing and funding infrastructure. It is run by Mission Climat, Caisse des Dépôts research centre on the economy of climate change and carbon markets. Because infrastructure has a long lifecycle and requires considerable financial investment, it is essential to take into account climate change in the design of new infrastructure and modify old infrastructure if necessary. This requires active and effective debate between public decision-makers, companies and experts in climate change, as well as the development of economic tools adapted to this type of funding. The research programme is structured around two topics: An analytic topic which analyzes the economic tools to be set up and Application modules which are supported by concrete infrastructure management examples.

The international research programme addresses four themes (North-South problems; cities and local government; water, agriculture and forests; industrial infrastructure; the financial sector) as well as economic and financial instruments.

The first concrete application of the research is the launch of a Cities and climate change club: Aimed at French local authorities who require additional information on their role in this area, the club aims at clustering knowledge on both management and financial issues within the scope of infrastructure and climate change. It focuses on possible mitigation and adaptation measures involving urban infrastructure and its funding. Three annual meetings are organized for French local authorities and public service companies water and energy use and supply, buildings and land development, transportation to discuss climate change and infrastructure with economics experts. The first meeting was on energy infrastructures (how to adapt them to climate change and reduce greenhouse gas emissions); the second one was on flood risks management.

Cisco Systems: Improving governance through technology

The Climate Change practice of the Cisco Systems Strategy & Innovation Group (IBSG) is researching an initiative to reduce emissions from deforestation in developing countries with co-benefits for climate change adaptation and the conservation of forest ecosystems. Cisco Systems is developing innovations that help to address the market and governance failures which allow this practice to continue.

To this end, they are developing proof-of-concepts and prototypes which help manage decision making processes in deforestation hotspots by monetising forest property rights so that carbon sequestration services can be priced and managed. The 'rainforest skin' is an open network platform for real-time, highly distributed mass remote sensing, certification and monitoring of carbon stocks and flows that generates trust and enables collaboration between different actors in government, communities/NGOs/scientific organizations and the private sector. This platform will use a 'mash-up' of geo-referenced satellite, unmanned aerial vehicle and multiple ground based sensor networks to estimate the forest's carbon stock and flow dynamics and then allow for trading and risk management of this new commodity.

This effort is part of a wider global sensing and monitoring R&D collaborative effort with NASA and other partners to co-develop a Planetary Skin that goes beyond carbon sensing in rural and urban environments into critical sectors including water, food productivity and risk management.

Deutsche Post: Responding to disasters

Deutsche Post have identified Disaster Management as one of the four areas of their global CSR engagement (alongside Health, Education and Environment), in order to respond to more frequent and severe weather events and to assist the international community in responding to major natural disasters exacerbated by climate change. Activities include Disaster Preparedness, and Relief and Reconstruction. Having supported relief efforts for many years, in 2005, Deutsche Post initiated and launched a global humanitarian partnership with the United Nations (specifically the United Nations Development Programme (UNDP) and the United Nations Office for the Coordination of Humanitarian Affairs (UN OCHA)).

By the end of 2007, Deutsche Post established a global network of DHL Disaster Response Teams (DRTs). The DRT network consists of three regional teams (DRT Asia-Pacific, DRT Middle East and Arica, DRT Americas). DRTs are made up of expert volunteers and respond to formal requests from UN-OCHA and national governments. All of them have now been trained and equipped and ensure that the DHL DRTs are ready for deployment anytime and anywhere.

In addition to its Disaster Response engagement, in collaboration with UNDP and the government of Indonesia, Deutsche Post have developed a training concept to reduce the effects of natural disasters over the long term, by preparing airport authorities to improve their response in times of disasters. Deutsche Post's work in Indonesia was a focussed effort designed to find a robust approach to disaster preparedness that could be transferred to and implemented in other at-risk countries.

International Union of Railways (mixed public and private membership): Climate-proofing future investments

The Internation Union of Railways (UIC) has undertaken an extensive feasibility study analyzing the impacts of climate change on rail transportation infrastructure and taking stock of ongoing and planned work on climate change adaptation in European, Canadian, Australian and Indian railway companies. This includes case studies of the UK West Coast and the German Rhine Valley. This led to the Adaptation of Railway Infrastructure to Climate Change (ARISCC) project proposal that will produce information on the costs of adaptation, risk assessments, potential damages, a toolbox for identifying vulnerable assets and locations for a given line, a good practices collection and options for adopting standards to climate-proof new and existing infrastructure to climate change impacts.

McKinsey & Company: Learning about the economics of adaptation

McKinsey's Climate Change Special Initiative is a cross-functional and cross-sectoral effort, which brings insights, experience, and expertise from all parts of the firm to help advise the world's leading institutions on the impacts of climate change. McKinsey are working to deepen the understanding of climate change; its implications for industries such as travel and logistics, biofuels, and financial services; and are also working on climate change strategies, low-carbon operations, low-carbon growth markets, and risk management. To this end, McKinsey recently created the Social Sector Office (SSO) to ensure the best capabilities of McKinsey are available to help leading institutions address societal challenges.

In order to further knowledge on climate change adaptation, McKinsey is undertaking studies on the economics of adaptation - the physical impact of climate change on the social and economic well being of societies around the world - through a partnership between the firm's Climate Change Special Initiative and the Social Sector Office. Efforts are focused on providing pragmatic fact based information to decision makers by assessing the impacts of climate change as well as a range of adaptation measures including risk avoidance, risk reduction, and risk transfer. Efforts in this area are emerging as McKinsey is collaborating with lead international organizations such as the UNFCCC.

Munich Reinsurance: Building alliances around climate insurance

The Munich Climate Insurance Initiative (MCII) was launched by Munich Re in April 2005 in response to the growing realization that insurance-related solutions can support adaptation to climate change as advocated by the UNFCCC and its Kyoto Protocol. This initiative brings together insurers, experts on climate change and adaptation, NGOs and policy researchers intent on finding solutions to the risks posed by climate change. MCII provides a forum and gathering point for insurance-related expertise on climate-change impact issues.

MCII strives to fulfill four objectives:

  1. Facilitate insurance-related solutions to help deal with the impact of climate change using the combined resources and expertise of the public and private sectors;

  2. Conduct and support pilot projects for the application of insurance-related solutions in partnerships and through existing organizations and programmes. Identify success stories and disseminate information on the factors necessary to design and implement effective climate insurance-related mechanisms. These activities will focus on developing countries but will at the same time involve the evaluation of insurance solutions that have been used in developed countries;

  3. Promote insurance-related approaches in cooperation with other organizations and initiatives and within existing frameworks such as the United Nations, international financial institutions, international donors and the private sector;

  4. Identify and promote loss-reduction measures for tackling climate-related events.

MCII was founded by representatives of Germanwatch, IIASA, Munich Re, the Munich Re Foundation, the Potsdam Institute for Climate Impact Research (PIK), the Swiss Federal Institute of Technology (SLF), The Energy and Resources Institute (TERI), the Tyndall Centre, the United Nations University Institute for Environment and Human Security (UNU-EHS), the World Bank, and independent experts. The group is open to new members (e.g. representatives of other insurance or reinsurance companies, climate change and adaptation experts, NGOs and policy researchers) seeking solutions to the risks posed by climate change.

Ricoh: Conserving forests

Ricoh carries out conservation projects as part of corporate social responsibility. Working with non-profit organizations and local residents, Ricoh implements nine forest ecosystems conservation projects in eight countries. Ricoh is financing these projects through a social contribution reserve to which 1% of annual profits are allocated. Ricoh has completed three such multi-year projects in 2007 (Restoration of Temperate Forests and Giant Panda Habitats in Wolongin; Restoration of Satoyama in Bangladesh; Conservation and Restoration of Forests at World Heritage Sites in Sri Lanka) and two further projects in China and Brazil were initiated in 2008.

Sagawa Express: Climate Savers

Sagawa Express has developed and is putting into practice the Climate Savers Program to reduce emissions and mitigate the impacts of climate change.

Siemens: Developing adaptation technology

Water management

SkyHydrant system:  To help the UN achieve the goal of reducing the number of people without access to clean water to one half of today's level by 2015, a team from Siemens Water Technologies has developed the portable water-purification system SkyHydrant and established the SkyJuice Foundation to ensure the system will be used effectively in developing countries and disaster areas.  SkyHydrant purifies unclean water by pumping it through a membrane of ultra-fine fibers. The result is exceptionally pure drinking water that surpasses World Health Organization (WHO) quality specifications. The system does not require electric power or purification chemicals, and with annual costs of less than 20 euro cents per person, it is affordable for even the poorest communities in developing countries, including those communities affected by climatic disasters. To date, the SkyJuice Foundation has installed around 450 systems in 16 countries on 4 continents.

Water Purification - Desalination Power: Siemens has won a competition staged in June 2008 at the first "International Water Week" exhibition in Singapore. The Singapore government announced at the exhibition that it was providing USD 3 million in research funding for the "Singapore Innovative Technology Challenge." The goal was to find a technology capable of cutting in half the cost of converting seawater into drinking water and thus help the government's efforts in establishing a secure water supply for the country. The concept of Siemens was not to desalinate seawater by means of energy-intensive heating and vaporizing processes, but by channeling water through an electric field. This reduces energy consumption per cubic meter of water from the ten kilowatt hours (kWh) common at conventional facilities to just 1.5 kWh. Even the best of the previous technologies based on reverse osmosis used twice this amount of energy.

Pure Water: Recycling Wastewater: Siemens has assisted the Singapore government in supplying much needed fresh drinking water as about half the country's requirement of water currently needs to be imported from Malaysia. Siemens provides a wastewater purification system which filters water to required World Health Organization (WHO) and the U.S. Environmental Protection Agency (EPA) standards. A water purification plant in Kranji is now being expanded. By 2012, its capacity will be boosted to 210,000 mÂł per day in order to meet 20 % of the city's water requirements. The additional expansion is possible because the Siemens recycling process is cost-effective and much cheaper than other water purification methods such as desalination. Concerned about water resources, a number of delegations from other Asian countries have also expressed their in this technology.

Building management

State-of-the-art technology by Siemens is making it possible to reduce energy consumption in buildings by up to 30 %. Buildings, such as the New York Times Building (NYTB) and the 30 The Bond office complex in Sydney, demonstrate what can be achieved for people and the environment when sensors, special materials, energy supply systems, and information technology interact in an optimal manner. Siemens have developed building management systems that automatically monitor and control the air conditioning, water cooling, heating, fire alarm, and generation systems.

Sompo Japan Insurance:  Providing weather index insurance in Thailand

Sompo Japan Group is developing a new Weather Index Insurance scheme for farmers in northeast Thailand as an option for adaptation.  Since 2007, Sompo Japan Risk Management and the Japan Bank for International Cooperation have been jointly studying risk finance schemes that utilize insurance, identifying weather index insurance as the most effective scheme.
Most farmers in north-east Thailand, where there is a shortage of water resources, rely on rainfall.  As a consequences, harvests can fluctuate greatly depending on meteorological conditions.  The development of weather index insurance requires highly reliable long-term meteorological data.  Khon Kaen Province has relatively precise meteorological weather stations, making it a suitable target for product development.  Insurance coverage as well as penetration rates are low - Thai farmers are unfamiliar with insurance and struggle to pay back loans taken for agricultural equipment.  In response, Sompo Japan decided to develop a new scheme to sell an insurance product with loans from Thailand's Bank for Agriculture and Agricultural Cooperatives (BAAC).  Between April and June 2008, Sompo Japan made a trial product, prepared fliers in Thai for the product, and conducted interviews with local farmers.  BAAC expects the product to succeed;  in May 2009, a simulation for full-scale product development was started and Sompo Japan is preparing to launch the product in 2010.

Suntory: Conserving water resources

Suntory Limited is making the conservation of water resources the axis of their environmental activities in line with their corporate message "Water for Life, Suntory".  Suntory are carrying out work to protect water sources and forests ("Forests of Natural Water") focused on the forests that serves as sources of water for their plants in cooperation with national and regional administrations across Japan.  The company has opened the Suntory School of Forest and Water to provide environmental eduction for elementary school children.  In addition to these activities, the company also has a long-running "Save the birds" campaign and is supporting bird conservation through a designated fund.

Thames Water: Adaptating business operations

Thames Water are adapting to the impacts of climate change as part of core business strategy.  Thames Water's Strategic Direction Statement (SDS) outlines how Thames Water will respond to a wide range of issues including climate change, leakage and improving water efficiency whilst delivering high quality customer service from 2010 to 2035.  The SDS was a culmination of Thames Water's largest-ever public consultation exercise, which included discussion groups with customers, stakeholder workshops, interviews with MPs and an online consultation, prompting over 2,600 individual comments.  The SDS has identified three main areas for action between 2010 and 2015:

  1. Water Resources - climate change has been specifically taken into account through headroom.

  2. Sewerage/Sewer Flooding - improve the understanding of catchments and climate change with respect to sewer flooding between 2010 and 2015. Also - uplift design standards for new assets to a 1 in 30 year level of flood protection.

  3. Flood Resilience - Thames Water have undertaken assessment using Environment Agency guidance looking at the potential risk of a 1/100 flood + 20% and are developing a staged plan to improve protection between 2010 and 2020. They have also worked closely with financial regulator (Ofwat) on the development of an analytical framework to assess asset resilience to flood hazards.

Thames Water are actively building capacity both in terms of assets and employees to ensure that their business is able to respond effectively to the impacts of climate change, working within their business and with local communities. In 2008, Thames Water started to actively engage their supply chain on climate change, adaptation, carbon and sustainability.  A workshop was held.  Thames Water have challenged their suppliers to consider their contribution to climate change, what adaptation actions they need to take to ensure they can maintain service levels to the business as climate change impacts increase and to also to begin to assess the carbon intensity of the goods and services they provide.

Veolia Environment: Advancing climate knowledge

The Veolia Environment Institute is a think tank founded in 2001 in France as a non-profit organization, by the company Veolia Environnement.  It is dedicated to promoting long-term thinking and to anticipating the trends that will mark the interactions between society and the environment.

The Institute develops three instruments to achieve its objectives: a research programme led in collaboration with academic partners, a series of international conferences, and a scientific editorial policy.  Besides other areas of concern (economic dimensions of the environment, links between health and the environment, urban growth imperatives, society and environmental issues), climate change is a focal point of investigation.  Some examples of major projects that have been carried out by the Institute include:

  1. comparing the ecological footprints of different models of energy consumption in the urban areas of developing countries;

  2. exploring issues raised by the Stern Review Report on the Economics of Climate Change;

  3. studying "factor 4" scenarios in the most advanced economies;

  4. providing forum for discussion about the energy, environment and poverty nexus in India;

  5. assessing technology and policy solutions during the Climate 2050 Conference in Canada.

These activities mark the Institute's determination to ground its actions and its future plans in ongoing fruitful dialogue with academic and international circles. All the results are available thanks to an open access policy.

The Institute derives much benefit from the diversity of situations in which the Veolia Environnement Company has been professionally involved worldwide. These potential case studies constitute an extremely precious resource of data and represent a vast field of observation and analysis for the think tank's scientific partners.

In return, the Institute's work offers to the Veolia Environnement Company a long-term vision of the major challenges that the environmental services sector will be likely to face in the coming decades. For Veolia Environnement more particularly, the management of GHG emissions is a responsibility and more often an opportunity to develop expert services for the benefit of its clients.