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How Small Businesses Can Manage Climate Change Risks in South Africa

How Small Businesses Can Manage Climate Change Risks in South Africa
August 23, 2022 gnuworld
small business climate change

In this article, we explore ways that small businesses can manage climate change risks in South Africa.

It’s common to feel powerless (and therefore do nothing) in the face of climate change. However, serious effects of climate change – from fires to flooding – are already here.

Even with limited resources, there are steps small businesses can take to manage the risks and protect themselves.

Below we discuss:

Growing recognition of climate-related risks

Awareness of the risks of climate change is growing among companies.

In the 2022 Allianz Risk Barometer, business executives ranked climate-related risks higher than ever before as a global business risk.

Rather than just “watching” as the frequency and severity of weather events increase, companies are realising the need to manage the risks at a practical level.

For 2021, global insured catastrophe losses were in excess of US$100 billion. More than half of the losses came from floods, heavy rain, thunderstorms, tornados and winter freezes.

Allianz Risk Barometer respondents are most concerned about climate-change related weather events causing damage to corporate property (57%), followed by business interruption and supply chain impact (41%).

Ultimately, the biggest fear for companies is not being able to produce their products or deliver their services.

Climate change risk assessment

Key climate change risks affecting South African businesses include:

  • damage to property and infrastructure
  • extended power cuts
  • workplace disruption and insurance delays
  • disruption to supply chains
  • water and other resource shortages.

However, climate change risks aren’t the same in all parts of South Africa, or even across different towns or suburbs. They’ll depend on where you’re located and what your business does.

For example, flooding is obviously more of a concern near coastlines – and fire is a greater risk in dry areas, near stretches of open veld or mountains. Running out of water is a concern in specific, drought-affected regions.

This in-depth risk assessment checklist was developed for use by small businesses in Queensland, Australia – but it’s equally useful for South African conditions.

It provides a step-by-step guide to figuring out which climate-related risks could affect your business, and how.

Ways small businesses can manage climate-change risks

There are many ways small and local businesses can assess and manage climate change risks.

Consider location

Investigate climate change risks in the area your business is located. It may make sense to invest in basic precautions to make your premises more resilient to fires, storms, flooding or rising sea levels.

These precautions don’t have to be sophisticated or wildly expensive to offer some protection.

Guard against infrastructure disruption

Climate risk analytics can help you identify the risk of disruption to production facilities or transit of goods.

For many businesses, it makes sense to identify alternative suppliers, in case of disruptions.

Depending on the nature of a business, it may also be a good idea to identify possible alternative approaches to storage or warehousing.

It could make sense to invest in a reasonable volume of backup inventory, to protect against interrupted production. A risk-cost-benefit analysis can aid this type of decision making.

Extreme weather events increase the risk of disruptions to power, water and telecommunications infrastructure.

Especially given South Africa’s on-going load shedding, it could be time to consider investing in an on-site backup power or solar power solution. One or more tanks for added water storage could also be warranted.

Ensure productive work conditions

Climate change is increasing the frequency of extreme heat events that impact productivity.

A risk assessment will show how to ensure safe and productive working conditions through, for example, installing a green roof, air conditioning or enabling flexible working hours.

Prepare for disasters

It’s essential to put in place a disaster recovery plan to protect your employees, your premises and productivity. Planning could include an emergency shelter.

Collaborate with stakeholders

Engage and collaborate with all your business stakeholders, including staff, clients, customers, suppliers, investors and landlord. Strong relationships can help you manage climate risks and help share the costs during and after a disaster.

Diversify your business

How sensitive are your current products and services to climate change? Consider how such sensitivity can be reduced or made more resilient. Explore new, less climate-sensitive products and services.

Diversifying your products and customer base can limit the impact of disruption due to climate-change events.

Insure your business

After assessing your business for climate change risks, put appropriate insurance cover in place.

Managed workspace as part of business continuity plans

Coworking and serviced office space can help small businesses ensure business continuity, by providing flexible workspace and connectivity whenever it’s needed.

Managed workspace offers everything businesses need to operate, already set up and ready to go.

The provider – rather than your business – assumes responsibility for maintaining the physical facilities and amenities.

For small businesses, this saves on costs and time. It also means that using managed workspace is a way for small businesses to manage certain risks, including climate change risks.

The Workspace offers a range of affordable workspace packages. We also offer emergency office space for rent by the day, week or month. Simply book online, for workspace when and where it’s required (with backup generators) in Gauteng.

Contact us online or call 0861 250 259 for more information about serviced office space or coworking at The Workspace.

Contact us to find out more

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