Companies and climate resilience: Mobilizing the power of the private sector to address climate risks

The private sector is an essential partner in reducing the impacts of climate change and extreme-weather events on vulnerable people. This paper argues for the Red Cross and Red Crescent Movement (“the Movement”) to reimagine its engagement with the private sector in addressing the humanitarian consequences of climate change.

The paper also identifies two major shortfalls that prevent businesses from realizing resilience in their own operations and beyond. First, businesses can do a better job of diagnosing climate risk, both for their supply chain as well as for the frontline communities that service that supply chain. Most private-sector risk analysis is focused on analysing hazard and exposure, and does not include the third critical element of vulnerability analysis. Failure to understand the vulnerability of people and assets amplifies the climate and disaster risk facing a business.

Second, businesses need to broaden their understanding of climate resilience, specifically by recognizing how human, social, natural, physical, financial and political capital assets can become integral parts of a successful enterprise risk management system. These six types of capital assets are building blocks to private-sector resilience and they are closely aligned to the Movement’s definition of the six characteristics of a disaster-resilient community. The humanitarian community has a pivotal role to play in mobilizing the private sector through the provision of expertise and a commitment to partnership.