“Climate risk” or the risk from “changes in climate” has believers and non-believers. However the changes we do see month on month and year on year is there in the science and the data. The impact of “climate risk” can be direct and visible. Or it can be indirect or invisible and takes time and manifest itself in totally unforeseen ways. Climate risk affects every aspect of human life. The effects on individuals, communities, business, investors and government is however quite different.
Source : From the TCFD 2017 final report release.
Climate changes that have an “environment”, “social” and/or “governance” impact include …
- Floods. From rainfall and/or being in a flood zone. Too much water, higher flows within too short a period of time. Crop damage. Change in flow of rivers. Loss of lakes. Lakes forming in new areas. Urban catastrophes.
- Drought. Prolonged lack of rain over long periods of time. Change in seasonal availability of water. Crop damage. Over time soil erosion. Drop in yields every subsequent year. Effects of deforestation.
- Heat. Rising and higher temperatures over days, times of day has impact on human behavior, productivity and output. Higher energy costs for cooling.
- Cyclones. Hurricanes. Tornadoes. Humongous weather events. Rise in ocean temperature.
- The switch and transition to Renewable Energy, (RE) from fossil-fuels energy, sustainability and resilience for “energy”, “heating” or “cooling” as the case maybe. Add mobility energy to these basic needs.
- Increased forest fires due to climate change factors. Damage to plant & machinery, equipment, vehicles due to any or all of these factors. Failure in communications systems from all this.
- Cold. Has an effect again on human behavior, apart from higher energy costs. Reduced equipment life-times.
- Migration away from these physical geography “zones”. Migration into more perceived “amenable zones”.
- Change in consumer behavior. Household income, outflow and expenses due to any or all of this. Collective actions in urban apartment complexes to rural communities.
- Customers and Vendors in the chain of business for any “entity” affects the success of that entity on a local, regional, country and planetary level.
- The need for the 4 R’s across all value chains. Reduce. Re-use. Recycle. Recover (in that order).
- Air quality. (Indoor and outdoor). Water quality. Food quality (Ingredient sources).
- Impact of dairy, animal husbandry for “food security”. Food from the oceans, rivers and lakes. The life-cycles costs of a meat-based diet.
- The cascading nature of “climate risk”. One thing can lead to another, and another with logarithmically increasing risk. Points of no-return and existential threat at micro and macro-levels are feasible.
A currently globally accepted framework for understanding and action around climate change is an “ESG framework”. This brings “finance & money” factors to 3 disparate pillars. The “E” pillar of environment, “S” pillar of social and sustainability, and a “G” pillar of Governance.
Of course all this varies from industry to industry, the weightage between “E”, “S” and “G”, GHG (Green House Gases) emitted up or down a value chain, volume of fossil-fuel use, within or outside national borders, developing world or developed nations, indoor vs outdoor implications, periods during a year, day and night, which part of the world you are in, mountains or plains.
Environment factors may include energy consumption, water consumption and quality, air quality, waste management, natural resource preservation, crop security, steady supply chains, animal welfare, bio-diversity etc.
Social factors may include human rights, wild life food products, food consumption, community engagement, health and nutrition, supplier relations, work-life balance, human capital, re-skilling, green skilling, workplace safety, data privacy etc.
Governance factors may include Board composition and independence, ethics and values, conflicts of interest, transparency and disclosure, Reporting, statutory compliance, taxes management, lobbying, political contributions, whistleblower treatment etc.
A business “entity” and its footprint within its controls may have a Geographic spread. In multiple countries and states with in that country. Urban offices, factories in suburbs. Sourcing from rural areas, Distribution, warehousing, re-sellers, logistics across geographies affected by climate factors. However not only “internal” within control factors but “external” beyond control factors add to the “VUCA or BANI” of Climate Risk. (VUCA = Volatility, Uncertainty, Complexity, Ambiguity. BANI = Brittleness, Anxiety, Non-Linear, Incomprehensible By nature of Climate Risk).
We also try to differentiate ourselves from any competition between 2 imperatives ….
- We can do the “checkbox” stuff of “routine ESG”. Disclosures, financial reporting, compliances, regulatory requirements, reviews and audits, enhancing your ESG footprint while investor facing, customer facing, vendor facing or public facing.
- What all of us are really interested in, is partnerships that is making a “planetary” difference. “Genuine Green”. This has to include the individual, the Green Entrepreneur, The Youth Ambassador for L.I.F.E., the team, the tribe, the community, the geography, the localization, the state, the country, the region, the globe … mainly the planet and all humanity.
With “CVC Group” a key partnership, especially for scale is the SCGJ (Skill Council for Green Jobs) a skills council of the Govt. of India and CAF (Charities Aid Foundation). This allows us to focus on our core-competencies while helping to implement larger Government schemes, integrated to international UN SDG, IPCC and other such programs, while providing smaller grass roots level boots-on-the-ground actual “Community driven transition to a Green Economy”. 12 districts identified as “Standout Proof-of-concept”, combining net-zero DRE (Distribute Renewable Energy), CEA (Controlled Environment Agriculture), Nutritional vegetables with off-take guarantees, Digitization of Agri-Tech and Clean-Tech as viable and needed at 10 x cost benefit. Make in India.
If you are an investor or a bank with a portfolio of loans you want granularity and numbers, measures & metrics about the probability of all this and the likely impact. A prioritization of the top-5 or top-100 risks for any business. Updated and managed after an initial assessment, perhaps every quarter.
At “Riskpro” we are continuously improving and manage a “Risk library” on “climate changes” which is the basis for being able to “as best” quantify “climate risk”. An IoT enabled, backend platform scalable software is clextra from “Edgevalue” that can deliver from the cloud. While climate and related expertise comes from “CVC Group of companies”. Boots on the ground comes from both, Riskpro (200+) and CVC Group (200+ and more Green Entrepreneurs and Youth Ambassadors for Life YAL) planned for extensive urban and rural reach pan-india.
The “risk register”, probability, impact, cognition of each line item, control, automation of controls where feasible, audit trails, people authority, accountability and responsibility to mitigate each over sustained periods of time. Impact in dollar terms, probability based on data and velocity based on periods of time you can select for each. We will facilitate and enhance what you are already doing. Help you move the needle from “individual” responsibility to “collective, collaborative, social, community” functionality for the environmental to get addressed.
Your risk framework can be as simple as a 5-level Risk Maturity Model. 1 = Initial, 2 = Repeatable 3 = Defined, 4 = Measure, 5 = Optimized. You could do this upstream and downstream across UN SDG 17 goals, Scope 1, Scope 2, Scope 4 and Scope 3 emissions (Carbon equivalents of all Green House Gases) and have this audited, monitored and verified with a “Green Certificate”. These will be the basis for ESG frameworks, financial disclosures, balanced scorecards, statutory compliance, reducing borrowing costs, lowering expenses, managing disaster, crises handling preparedness, ensuring business continuity.
If you wish to select one or more disclosures such AICPA & CIMA supported IFRS S1 & S2, SSAE SOC, TCFD, SASB, GARP GRI, NGFS, BRSR (India) … we can enhance your existing processes with data-acquisition, report writing, report reviews, compliance and regulatory aspects, internal and/or external audits, public facing reviews and more. We can also prepare you for any such assessment, apart from connecting you to our partners to achieve certification, where available and applicable.
While “risk” is the downside, it’s the basis for ensuring progress, growth, scale, improvement … first ensuring sustainability, resilience and a community driven transition to a comprehensive green economy. Leveraging “CleanTech”, AgriTech”, digitization and AI leverage. But first list your risks.
At “Progress Partners” the strengths is years of compliances focus on statutory and legal compliances. While India centric, each country or region needs a partner for localization. Several products offer automation in this space – however will need boots on the ground. Especially for the emerging “S-pillar” of ESG. We have evolved a “concierges desk” concept that every entity can deploy internally or with staff-augmentation from us and leverage our the clextra platform (or equivalent global cloud platform) to genuinely align toward UN SDG goals on the entity, community, CSR, regional or related footprints of interest.
At “Edgevalue” with our cloud, platform, software, tool, enabler “clextra” we have a list of freebie self-assessments related to ESG and Green to comprehensive scalable aggregation of all data (you decide) to meet your ESG and Green initiatives. Climate Risk is so large and VUCA - BANI unfathomable, BUT you have to start somewhere ….
A list of self-assessments (organization-wise), but scalable to 100 odd portfolio companies or even 1,000,000 organizations globally from the same platform …
- ESG Self-assessment on 37 parameters between E, S and G factors.
- Green self-assessment how are you doing on 20 parameters, self-rating placing you on a 5-level Green Maturity Model. 1 = Initial, 2 = Repeatable, 3 = Definable, 4 = Measured, 5 = Optimized. Also recognizing … effort, activity, output and outcomes on each of these key 20 factors.
- Green Houses Gases Calculator. Per-se a list of all possible potential factors, with current IPCC GWP (Global Warming Potential) current numbers and giving you an indicator of your Carbon Dioxide Emissions equivalent periodically.
- Green House Gases CO2e Breakup. (Assuming you have approximate data already) binned into Scope 1, Scope 2, Scope 3 (supply-chain, upstream and downstream emissions), and Scope 4 (avoided emissions).
- Map your existing practices to BRSR (India SEBI-top-1000) reporting principles and the UN SDG 17 principles. Know visually where you stand.
- As Scope 3 emissions and supply-chain, third-party assessments are a real bottle-neck for large organisations with many small, MSME and micro-contractors, we also a quick Vendor Self-Assessment. (On 55 generic parameters NOT including ESG or Green) This can be integrated with the clextra eDMS (electronic Document Management System) to upload all related documents. This is ideal for “remote” management of entire cycles for small loans, micro-finances etc.
- Clextra “Artwork feature” also supports data-layers over physical maps (including Google, Ordinance, your own), schematics, photos etc. to map all climate risks based on physical location and local considerations.
- A potential website integrated, one-customer in each country is our clextra “Circles of Sustainability”. For example each and every town in India can be self-rated on 28 parameters (7 each on Economics, Ecology, Politics and Culture. Each of the 28 has a 9-point rating scale, which can be exposed to the public from your website. This can be a driver for driving digital traffic and starting many a conversation.
While all the above are “models” that can be pen & paper, documents, reporting, dashboards etc. off-line, we suggest you taking it as a package hybrid of “tool + services” to get the best start to your “Climate Risk” management journey.
Further at “Edgevalue” we offer “innovative and creative” approaches. This is extremely important to solving large complex problems such as climate risk, which at first glance, seem to have insurmountable problems. We have already indicated VUCA and BANI. Add Design Thinking, Scenario Planning, Defense strategies, Havard Problem Solving method, McKinsey hypotheses … and you get what we can mobilize to genuinely address your situation. We understand data, patterns, infographics, video, social media, visual arts, dance and music, people behavior.
Our starting point can and should be the basis for getting all these benefits and more. Do share with any of us, what in this document catches your eye.
Start talking to any of us in any of the organizations mentioned on the following page ….
Putting all this together we now offer an entry product-service for “ESG-MRV” (Measuring, Reporting & Verification) with a focus on the E-pillar and within that Scope 3 GHG emissions which are the most difficult to identify, measure, mitigate and mange – HOWEVER with the most rewarding benefits, tangible and intangible, monetary and perceived. Talks to us about of “ESG-MRV” offering. Not ignoring the “S-pillar” and “G-pillar”, we offer a “Just Green Certificate” as in Social Justice and a community driven transition to a green economy being more important the paperwork, theory and regulatory checkboxes. Talk to any of us.
Contact ….
Casper Abraham
+91 98450 61870
Bangalore, Karnataka, INDIA
Edgevalue
“clextra” cloud backend, tool, software, platform for any or all of this “automation”. IT, Digital, cloud, AI advisory services.
Founder, CEO & Principal Architect (clextra)
http://edgevalue.com AND http://edgevalue.com/clextra
CVC Group of companies ….
Focus on DRE ()Distributed Renewable Energy), CEA (Controlled Environment Agriculture) and, Health & Nutrition, (water and waste management) “scalable” programs in 12 districts in 4 India states (Jharkhand, Gujarat, Tamilnadu, Karnataka) to become net-zero, sustainable and resilient leverage Green Entrepreneurs and Youth Ambassadors for L.I.F.E. as a Centre Of Excellence with SCGJ Govt. of India and CAF India.
We also offer “High-end advisory” services to Boards, Stakeholders & Top-Management in all topics in this document.
Group Advisor
Key partnership Venture ….
To achieve any alignment with planetary, global and national implications we are a part of the “community” that is a part of ….
SCGJ …
Skills Council for Green Jobs is a skill council of the Govt. of India (MSDE) Ministry of Skills Development and Entrepreneurship. CVC Training Services Pvt. Ltd., Bangalore Is a “Centre of Excellence” for SCGJ.
… and CAF India
Charities Aid Foundation has for more than two decades now, been providing strategic advisory and management support to corporates, foundations and individuals to ensure optimal impact on philanthropic investments