Page 52 - IRMSA Risk Report 2021

3.8

EXTREME WEATHER EVENTS, NATURAL DISASTERS
AND CLIMATE CHANGE

The annual World Economic Forum (WEF) Risk Report 2020 presented 5 of the Top 10 global risks as being environmental-related,
including extreme weather events, natural disasters and the planet’s elephant in the room – climate change. South Africa, which
pollutes above its size in a global GDP comparison, while featuring a significant portion of the world’s vulnerable biodiversity and
unique ecosystems, is particularly exposed to climate risk, which exacerbates disasters and extreme weather.

SCENARIOS FLAGS SUCCESS STORIES
COUNTRY FLAGS C F
OWNING OUR FUTURE Private sector companies have shown
1. LEADERSHIP innovative approaches to addressing
climate risks. For example, to address fire
2. INSTITUTIONAL CAPACITY and flood risks, where many insured losses
3. POLITICS have been paid out, Santam is working with
municipalities to strengthen their resilience
4. SOCIAL COHESION and capacity in reducing and mitigating such
risks. In the retail sector, Woolworths is
5. NATIONAL POLICY
working with NGOs to clear alien vegetation
6. SERVICE DELIVERY in water catchments, to improve water
security for its suppliers. Critical to note is
7. INEQUALITY that in both these examples, the companies
8. ECONOMY are creating climate adaptation benefits
PERPETUAL FAKE IT UNTIL WE not just for themselves or their customers
HANGOVER MAKE IT, OR NOT 9. GLOBAL TRENDS and suppliers, but also for the broader
10. CLIMATE community.
C – CURRENT (2020/21) F – FUTURE (2030)

Climate change has already had a significant effect on South Africa’s weather patterns, with examples across all categories of extreme
events and disasters impacting the country. Climate risk and its corresponding extreme events and disasters affect government,
business and all levels of society, whereby particularly in countries like South Africa, the vulnerable are most drastically impacted –
linking to increased inequity, social unrest and other risks. Covid-19, while highlighting the effects of “slow boil” catastrophic events such
as pandemics and climate risk, has also been extremely costly, potentially setting back action on climate change and disaster planning
and management.

TOP 5 CHALLENGES TO ACHIEVING TOP 5 RISK TREATMENT OPTIONS AND
TARGETS OPPORTUNITIES
1. Climate is changing quicker than cities, communities and 1. Raise awareness in government, business and civil society.
businesses can adapt, and there is a lack of scientific
decision-ready data to inform and prioritise effective
interventions.
2. A rapidly urbanising, growing population that must be 2. Stronger collaboration across sectors and stakeholders in
accommodated in an environment of low economic addressing these risks – leadership by government and big
growth. business is required.
3. A lack of knowledge about how our individual and our 3. The adoption of sustainable practices by all: water-
organisation’s daily actions affect our future exposure sensitive practices, energy-efficient design, passive design
to these climate change and weather-related events. principals in buildings, resource use reduction, etc.
4. Land-use planning falls on local municipalities that are 4. Call on big business and investors to increase pressure
under tremendous pressure. on reducing dirty assets whilst promoting sustainable and
green investments.
5. Continued low awareness in government, business and 5. Use of technology and innovative financial solutions to
civil society. improve resilience and reduce the Risk Protection Gap
(RPG).

FACTS AND FIGURES
• The 2017 Knysna Fires cost more than R3 billion in damages and were the single largest insured loss in SA history at around R2
billion, closely followed by floods in KZN later the same year, which were estimated to have caused R2 billion in losses.
• SA contributes more to global carbon emissions per capita than its G-20 peers, with a particularly dirty energy industry – SA 9
tCO2 / capita vs G-20 average of 7.5 tCO2 / capita.
• The UN Environment Programme (UNEP) launched the first global insurance industry guide in June 2020 to tackle a wide range
of sustainability risks including climate change.
• South African companies, including those in the energy sector such as Sasol and Eskom, are starting to move towards reducing
CO2 emissions and promoting green energy projects.
Source: https://www.unepfi.org/psi/underwriting-esg-risks/; https://greenbook.co.za; Climate Transparency, 2019; Knysna Fires Report, 2018; WEF, 2020

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