Nov 6, 2013

Business Planning for Climate Change- A 'Climate Change and the Bottom Line' Conference Recap

November 6, 2013
By Katia Blackburn


Climate change is real: It’s happening fast, it’s extremely expensive, and preparing for it requires a collaborative full-court press. Cascadians already getting traction with their preparation, protection and prevention strategies shared their experiences and plans at Climate Change and the Bottom Line conference, held on October 31.


Here is a summary of what was discussed at the event, which was hosted by Sustainable Seattle with co-presenters Climate Solutions, Riddell WilliamsSeattle Metropolitan Chamber of Commerce, UW Foster School of Business and UW Buerk Center for Entrepreneurship. The event took place at Anthony's Forum in Dempsey Hall at the University of Washington Foster School of Business. A video recording of the event will be released in the coming week. This blog will be updated with a link when it's available.

Ross Macfarlane, Climate Solutions, starts off the
conference with an introduction on climate policy.
The gathering of over 90 people opened with Climate Solutions’ business partnerships’ senior advisor Ross Macfarlane providing headlines on climate policy. His main focus: The Oct. 28 signing of the historic Pacific Coast Action Plan on Climate and Energy by Gov. Inslee, Oregon Gov. John Kitzhaber, California Gov. Jerry Brown and British Columbia Premier Gordon Campbell. The plan sets an ambitious agenda that includes placing a price on carbon in Washington and Oregon to complement B.C.'s carbon tax and California's cap and trade programs, with a goal to create a carbon market in this region, which represents the world's fifth-largest economy.

Macfarlane said he believes that the business leaders, community leaders, scientists and citizens of the Pacific Northwest have the ingenuity, willpower and creativity needed to apply both new and existing tools to “get the job done.”

Keynote Alex Kaplan, Swiss Re
In his keynote address titled "Public-Private Partnerships in Risk Management: Addressing the Costs of Climate Change", Alex Kaplan, vice president for global partnerships at Swiss Re warned that weather disasters are more frequent and more extreme, and the gap between the insured and uninsured portions of disaster response is growing substantially. In 2011, he said, there was $403 billion in disaster damages in the U.S. and only $126 billion were insured. Those uncovered costs fall mostly on government, in 2012 it spent $96 billion- more than the transportation department's budget.  “Let’s prefinance these disasters,” Kaplan said. “Let’s stop acting after the fact. Let's stop talking about disaster response and talk about resilience.”

Kaplan offered numerous ideas for addressing these issues. He suggested:

  • thoroughly assessing climate and other risks such as pandemics
  • documenting infrastructure and other assets to determine which are most effective and worthy of investment
  • making public-private investments in the infrastructure and insurance programs that, over time, will protect the most people, the most communities and the most local economies/GDP generators. One model to emulate which Kaplan called "the most robust catastrophe insurance model [in the world]" was that of Mexico, developed after the 1985 earthquake in Mexico City.

As part of his presentation, Kaplan referred attendees to Swiss Re’s Shaping Climate-Resilient Development report, which aims to provide decision-makers with a systematic way of answering these questions; Mind the Risk Report, which provides a global risk index comparing the human and economic exposure of 616 cities around the world; parametric insurance products, which are triggered based on the physical parameters of a catastrophic event; and to SmarterSafer.org, a national coalition of diverse voices united in favor of environmentally responsible, fiscally sound approaches to natural catastrophe policy that promote public safety.

Climate change is here: Adapting for the future

(L to R) Moderator, Alex Bernhardt, Guy Carpenter,
Matt Coleman, Nephila Advisors,
Bruce Howard, Avista Corp.,
 Ingrid Rasch, Earth Economics,
Amy Snover, UW Climate Impacts group,
James Rufo Hill, Meteorologist, Seattle Public Utilities

"Climate Change is Here" was the title of the kickoff panel. To start the panel discussion portion of the program, Amy Snover, director of the Climate Impacts Group at the University of Washington, warned that we must adjust how we plan for the future. For example, she said, we will see 6 degrees of warming by mid-century, with more extreme rainfall and more flooding. Questions to act on: Where is it safe to build? What areas will grow and how fast? How hot will it be and how do we prepare for heating and cooling? Her group, Snover explained, helps governments and business in the region understand scenarios and prepare for climate resilience.

When it comes to our diminishing snowpack, we are not in dire straits, at least not yet, said James Rufo Hill, meteorologist with SeattlePublic Utilities Climate Resiliency. Rufo Hill works with the UW and other regional and national scientists to obtain custom-tailored information that helps SPU make better decisions on how to manage water (potable and waste) programs for its 1.3 million customers. For example, he said, our region’s water supply depends on snowpack and rain, and the utility must adapt to the inevitable decline in snowpack. He assured the audience that SPU can change heights of reservoirs, add pumps, change the way they store water in reservoirs locally, and develop a portfolio approach to managing water. Conservation, meanwhile, has been and remains a powerful tool: The population served by SPU has gone up 30 percent since 1984, yet consumption has decreased by 30 percent thanks to rates management and conservation strategies.

(L to R) Moderator, Terri Butler, Sustainable Seattle
Crystal Raymond, Seattle City Light,
 Glen Hiemstra, Futurist.com,
 Shari Brown, Weyerhaeuser,
Matt O'Laughlin, K2 Sports
The second panel, "If You Make it or Move it” focused on facilities, logistics, IT, supply chain and energy. Crystal Raymond, strategic advisor for climate adaptation at Seattle City Light, said City Light is also adapting infrastructure to increase resiliency, while Matt O’Laughlin, Sustainable Action Team Chair at K2 Sports, has his team assessing the ramifications of a possible 70 percent reduction in snowpack by the year 2050, as well as improving sustainability practices at its manufacturing plant in the Bay Area and at its headquarters in Seattle.

Meanwhile, Bruce Howard, director of real estate and environmental affairs for Avista Corp. one of the top green utilities in the country — agrees with the Seattle utilities regarding the power of efficiency and conservation strategies. Avista is pursuing a variety of operations improvements including facility upgrades and rightsizing, and smart grid technologies.

Managing resources for the future is what Shari Brown, director for environment at Weyerhaeuser, is all about. Weyerhaeuser employs extensive modeling systems to look at weather, insects, disease and rainfall to forecast what species will survive pests, droughts and floods. The forest product giant is also increasing its production of biomass energy — already fulfilling 75 percent of its own energy needs — and is developing new wood products to replace petroleum products. For example, Weyerhaeuser is working on a product that replaces fiberglass. Not only is it made from an entirely renewable resource, it is considerably lighter in weight.

Innovation is inevitable when preparing for climate change. We will see "an awful lot of innovation...that is a good thing," said Glen Hiemstra, founder and owner of Futurist.com. Hiemstra encourages his clients to think more deeply and more long-term in their strategic planning processes, because, he said, that’s the only way that any real change will take place.

Economics of Climate Change

During the panel discussions, the economic impacts of climate change was repeatedly explored. Earth Economics retired executive and board member Ingrid Rasch explained how Earth Economics attaches a dollar value to ecological and economic “externalities” that are ignored in most planning processes. For example, she said, millions of people were displaced by Hurricanes Katrina and Rita, 150 miles of levees were destroyed, and $200 billion in economic losses were suffered. Earth Economics is helping to assess the true value of protecting the people, the environment and the economies of various regions, and is developing tools to help factor such values into future planning.

Matt Coleman, portfolio analyst at Nephila Advisor, said Nephila analyzes weather and financial performance data, quantifies the risk, and structures insurance products that pay if bad weather happens. It manages $9 billion from institutional investors, mostly pension funds. Much of Nephila’s role is to increase awareness of and education around integrating climate change risk into portfolio planning.
Brenna Davis, Virginia Mason Medical Center,
 Michael Yost, UW School of Public Health,
Jeff Hughes, Children’s Hospital

The final panel, "Breathe and Live" shared the health impacts of climate change. Extreme weather, compounded by poor air quality and asthma, will have an increasingly dramatic effect on human health and healthcare costs, said Michael Yost, associate chair of Environmental and Occupational Health Sciences at the UW’s Public Health Department. Working closely with the UW’s Climate Impacts team, Public Health predicts that extreme events happening on 1 to 2 percent of days per year will double or triple over the next 20-to-30 years. This will have a direct effect on emergency response, hospitalization and mortality rates, and will dramatically increase costs of healthcare. Also expensive, Yost said: Retrofitting non-air conditioned buildings in Western Washington so that people are protected from increasing temperatures.

As sustainability manager at Seattle Children’s, Jeff Hughes considers the operational, health and environmental costs of climate change. In case of water shortage or cut-offs, Children’s has dug its own emergency well. And, because asthma affects so many of its young patients, Children’s pays special attention to its own carbon footprint. For example, Hughes said, the four new wings being planned at the hospital will use 50 percent less energy than existing buildings. “From the CEO on down, we are all thinking about sustainability,” he said.

Brenna Davis, the director of sustainability at Virginia Mason Medical Center, is similarly proud of the various steps VM has taken to reduce its environmental impact and costs. Since 1995, VM has reduced energy use by 8 million KW hours across all of its facilities and was the nation’s first hospital to use lean management and the Toyota Production System to improve its operations. To "align our values with our actions," Davis shared that they work to promote healthy lifestyles and few staff commute by car. VM serves organic food in the cafeteria and 98% of the serviceware in the cafeteria is compostable. Meanwhile, Davis also is working on emergency planning surrounding climate change.

After the event, Sustainable Seattle Executive Director Terri Butler said, "I am really pleased by the turnout and by the many excellent ideas we heard today. Our next step is to form ongoing working groups to help regional businesses, nonprofits and governments strengthen their readiness and resilience in the face of growing environmental risk.”

Those interested in joining the next follow-on meeting or working group can email info@sustainableseattle.org. 


Katia Blackburn has been a Pacific Northwest journalist and strategic communications consultant for 35 years. She will complete her MBA in Sustainable Business at Bainbridge Graduate Institute this fall.


The event venue: Paccar Hall at the
University of Washington, Seattle, WA

Sustainable Seattle welcomes at the conference.
Panelists Ingrid Rasch, Board Member at Earth Economics and
Matt Coleman, Nephila Advisors, chat with a conference guest.
Terri Butler, ED at Sustainable Seattle

A festive conference attendee, it was a Happy Halloween!
Panelists Matt Coleman, Nephila Advisors,
Keynote Alex Kaplan, Swiss Re and
moderator Alex Bernhardt, Guy Carpenter

More photos of the conference can be found of Sustainable Seattle's Flickr page.



10 comments:

  1. We sat with our food directly outside of the place and it was perfect as I think the music really did a great job of filling up the space.

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  3. Thank you for organizing a conference around solutions. It really helps to read about concrete examples of how local and/or grass roots initiatives can make a difference and be scaled up / replicated in other places.

    Love Alex Kaplan's point: “Let’s prefinance these disasters. Let’s stop acting after the fact. Let's stop talking about disaster response and talk about resilience.” Isn't it time?

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    1. You are certainly welcome! We had a fantastic group of leaders in the room. Ones that know, yes- now is time we plan for our future!

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  4. I arrived late but this was a good conference, and Alex Kaplan of Swiss Re was very helpful re: insurance ideas.

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  5. Glad to know about this conference. It is such a big loss for me, becouse Alex kaplan gives very intersting and helpful life insurance tips. But I am happy to read this post and it is very helpful for me.

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  6. It's really good to read this post about the conference. Sounds good to me.

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    ReplyDelete