International Sustainable Banking Network Forum Climate change Business opportunities, good practices, tools. Dr James Allan, Associate Director

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1 International Sustainable Banking Network Forum Climate change Business opportunities, good practices, tools Dr James Allan, Associate Director Lagos, Nigeria, 3-4 March 2014

2 Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 2

Extractives including mining, oil and gas and service

pharmaceuticals FMCG, agri-business, consumer goods and

3 Customers include c.400 multi-nationals, over 34,000 users and growing Extractives including mining, oil and gas and service providers Finance, insurance, export credit, multi-lateral orgs. and ICTs Chemicals, construction, infrastructure pharmaceuticals FMCG, agri-business, consumer goods and tourism Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 3

Maplecroft s Global Risks Portfolio scope our dashboard Political Economic Social Environment Dynamic Risk Governance Framework Legal and Regulatory Environment Human Rights Risk Complicity and Rule

4 Maplecroft s Global Risks Portfolio scope our dashboard Political Economic Social Environment Dynamic Risk Governance Framework Legal and Regulatory Environment Human Rights Risk Complicity and Rule of Law Climate Change and Environment Regime Stability Rule of Law Human Security Climate Change Vulnerability Political Violence Judicial Independence Labour Rights and Protection Emissions and Energy Use Terrorism Corruption Risk Civil and Political Rights Sustainable Energy Business and Macroeconomic Risk Corporate Governance Access to Remedy Ecosystems Services Expropriation & Resource Nationalism Regulatory Framework OTHER Water Security Societal Forced Regime Change Respect for Property Rights Poverty and Human Development Environmental Regulatory Framework Structural Risk Growth Environment Food Security Natural Hazards Risk Complicity with Oppressive Regimes Growth Performance Digital Inclusion Natural Hazard Economic Exposure Democratic Governance Investment and FDI Education Socio-economic Resilience Supply Chain Complicity Risk Trade and Capital Flow Openness Capacity to Contain Infection Hydro-meteorological Risks Societal Resilience Macroeconomic Stability Influenza Pandemic Risk Tropical Storm and Cyclone Risk Economic Diversification Working-Age Population HIV/AIDS, Malaria and TB Geophysical Risks Resource Security Middle-Class Growth Health and Safety Seismic Risk Infrastructure Readiness Human Capital Transport and Communications Tsunami Risk Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 4

5 World Economic Forum Global Risks 2014 Report No. Global Risk 1. Fiscal crises in key economies 2. Structurally high unemployment/underemployment 3. Water crises 4. Severe income disparity 5. Failure of climate mitigation and adaptation 6. Greater incidence of extreme weather events 7. Global governance failures 8. Food crises 9. Failure of a major financial mechanism/institution 10. Profound political and social instability Environment Climate Change and Environment Climate Change Vulnerability Emissions and Energy Use Sustainable Energy Ecosystems Services Water Security Environmental Regulatory Framework Natural Hazards Risk Natural Hazard Economic Exposure Socio-economic Resilience Hydro-meteorological Risks Tropical Storm and Cyclone Risk Geophysical Risks Seismic Risk Tsunami Risk Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 5

How do you identify, understand, manage & monitor these risks?

6 How do you identify, understand, manage & monitor these risks? How can a multinational company with 400 sites across 60 countries assess its exposure to climate change? How can an investor assess and compare the potential impact of climate change on long term company performance? How can a food and beverage company with thousands of suppliers uncover environmental risks (e.g. water shortages, drought) that are hidden within it s supply chain? Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 6

7 Climate Change Vulnerability Index 2014 (CCVI) Vulnerability = Exposure x Sensitivity x Adaptive capacity Maplecroft 2013 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 7

National ranking and subnational analysis CCVI in Nigeria Exposure Sensitivity

cities Mean annual temperature to increase by 1.1 to 2.5 C by 2060s and 1.4 to 4.

1mm / yr Proportion of rainfall in heavy events increases by +4% to +13% by 2090s

land use, transportation, industry, financial services, settlements, health.

8 National ranking and subnational analysis CCVI in Nigeria Exposure Sensitivity Adaptive Capacity Nigeria ranked 6 / 197 in CCVI Lagos ranked 9 th out of 50 cities Mean annual temperature to increase by 1.1 to 2.5 C by 2060s and 1.4 to 4.6 C by 2090s Sea level rise 3.1mm / yr Proportion of rainfall in heavy events increases by +4% to +13% by 2090s Impacts on every sector of Lagos State including: agriculture, water resources, land use, transportation, industry, financial services, settlements, health.. Maplecroft 2013 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 8

9 Maplecroft s Supply Chain Management Tool Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 9

10 Add supplier locations to compare against climate change vulnerability Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 10

11 Assess overall exposure across supply chain Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 11

12 Assess overall exposure across supply chain using multiple risk indices Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 12

13 Rank suppliers by risk, prioritise risk management Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 13

14 Use mapping platform to view risk variation within country Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 14

Match key risks with supplier information Risk assess your entire supply chain Pre-assess new suppliers Manage the risks of individual suppliers Record risk

15 Match key risks with supplier information Risk assess your entire supply chain Pre-assess new suppliers Manage the risks of individual suppliers Record risk management proficiency Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 15

16 Concluding thoughts and CCVI scores for SBN members SBN Member CCVI Score (Rank out of 197 countries) SBN Member CCVI Score (Rank out of 197 countries) Bangladesh 0.15 (1) Mongolia 8.32 (141) Brazil 6.90 (102) Nigeria 0.75 (6) China 4.63 (61) Peru 7.73 (125) Colombia 6.49 (94) Philippines 0.93 (9) Indonesia 2.69 (38) Thailand 3.39 (45) Lao 2.49 (33) Vietnam 1.58 (26) Maplecroft 2014 The Towers, St Stephen s Road, Bath BA1 5JZ, United Kingdom t: +44 (0) e: info@maplecroft.com w: maplecroft.com Page 16

17 Thank you for your attention. For more information please contact e: t: +44(0) w: Maplecroft The Towers, St Stephen s Road Bath, BA1 5JZ, United Kingdom