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Global Assessment Report on Disaster Risk Reduction 2013
From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction |
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Global Assessment Report on Disaster Risk Reduction 2013
From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction |
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Public domain global disaster risk information developed for the GAR has been available since 2009iii and similar information published since 2004 (UNDP, 2004
UNDP (United Nations Development Programme). 2004.,Reducing Disaster Risk, a Challenge for Development., Bureau for Crisis Prevention and Recovery., New York.,USA.. . World Bank. 2005.,Natural Disaster Hotspots: A Global Risk Analysis., Washington DC: World Bank.,. . But this information is not generally included in business surveys, economic forecasts and country briefings that guide investors and credit ratings. Even in high-risk countries, disaster risk is rarely mentioned, contrary to quality and availability of labour, access to export markets, political and economic stability and incentives, such as tax breaks. Forecasters consider disaster risk too uncertain and volatile, particularly over the relatively short periods that are used for forecasting, to allow the integration of expected impacts into economic growth projections (see Box 12.2).
Global reference reports such as the International Monetary Fund’s World Economic Outlook and the Organization for Economic Co-operation and Development’s Economic Outlook do not include disaster risk into their economic modelling, possibly owing to the difficulty of estimating disaster risk per se and lack of consensus on the possible impact of disasters on economies.
Even in a weather-sensitive sector such as agribusiness, forecasts in 2011 and 2012 did not consider disaster risk-related factors in their projections. Thus, the risk of a global food spike posed by the 2012 drought in North America was not identified (see Chapter 10).
In these projections, other risk factors and uncertainties, such as fluctuating crude oil prices or exchange rates, are considered but disaster risk is not. Despite recent weather-related impacts on global commodity markets, these projections claim to provide “a baseline for further analysis of alternative economic or policy assumptions” and to analyse the conditions for “increasing agricultural productivity in a sustainable manner” (Ibid.).
Similarly, as Box 12.3 shows, even while water levels were rising in Thailand in October 2011, none of the major forecasting agencies and analysts warned of potential impacts on economic activity. This was certainly not because information on flood risk was not publicly available, iv but more likely because of a low level of awareness of disaster risk by economic forecasters and risk analysts and the difficulties of incorporating disaster risk-related metrics in their work.
12.4
Winds of change
Recent efforts of investor groups concerned with climate change have begun to show results with 10 percent of global investment managers now integrating environmental, social and governance (ESG) issues into their investment process (IIGCC, 2010
IIGCC (Institutional Investors Group on Climate Change). 2010.,Climate Impact Reporting for Property Investment Portfolios: A guide for Pension Funds and their Trustees and Fund Managers., Report of the Institutional Investors Group on Climate Change., London,UK. . Increasingly, companies, investors and governments are recognizing that more transparency in business practices, the spread of investment portfolios and patterns of natural resources consumption may create opportunities for greater efficiency and effectiveness in business operations (CDP, 2011
CDP (Carbon Disclosure Project). 2011.,DP Water Disclosure Global Report 2011: Raising corporate awareness of global water issues., Report written for Carbon Disclosure Project by Deloitte., London,UK. . Regulators are also requiring that businesses disclose hidden risks. For example, the Climate Change Act in the United Kingdom in 2008 led to a requirement that companies in the energy, water and transport sectors publish a report on the risks posed by the impact of climate change. And the Canadian Securities Administration (CSA) has issued similar guidance (Calvert, Ceres and Oxfam, 2012). Although currently these requirements only refer to climate related risks, in the future they could also address other disaster risks, for exam-
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