SA business faces climate threat

[Paul (Pepe) Freemantle]

Cape Town - An expert has warned that climate change presents challenges for companies in the way they do business and how they respond to the environment.

"The question is: 'How does business position itself in a changing environment?' There are changes to land use, which affects water quality and the flow of water," CSIR climate expert Professor Deon Nel told News24.

He said that while business was not a uniform institution and could not be expected to respond to climate change as one body, there were varied challenges to particular enterprises.

The agriculture and mining sectors are particularly vulnerable to the environment and also consume resources on a large scale, but they transfer a large percentage of their risk to insurance companies.

"There needs to be something that brings together shared risk and business needs to be externally engaged. The insurance industry is extremely sensitive to climate change," said Nel.

Threat

Natural disasters such as the floods in India and Australia resulted in huge claims to the industry, which has experienced a rise in claims blamed on climate change.

South Africa is not isolated from these trends, said Nel, particularly as there is more development in areas at risk of flooding.

"Climate change risk is absolutely applicable in the South African context. In the Garden Route area, there has been an increase in severe storms, resulting in R2.5bn in damage as a result of the decreased buffering capacity of the ecosystem," he said.

As more development encroaches on sensitive ecosystems, these systems are less able to absorb weather extremes and shield populations downstream.

In its water report, the CSIR found that South Africa's ecosystems were critically under threat.

"Our ecosystems are in a shocking state," said CSIR researcher Dr Jeanne Nel.

"Up to 85% of our estuaries are critically endangered and in the last five years we've been able to map the zone of an estuary. Our big systems are in trouble," she said.

Unique challenge

The acid mine water threatening Gauteng was also an environmental threat caused by hasty development, but how to deal with it presented unique challenges, Professor Nel said.

"A lot of the problem with acid mine water is with old mining companies who don't even exist anymore."

He agreed that development would happen, but said that the insurance industry would have to change its role in how it managed risk.

"We need to be sensible about how to develop and the insurance industry needs to move from being a risk carrier to a risk manger."