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Latest Climate Change Vulnerability Index published

Multinational companies operating in the Asian growth economies will be exposed to ‘spiralling environmental risks’ over the coming decades, according to Maplecroft’s 5th annual Climate Change and Environmental Risk Atlas , which identifies Dhaka, Manila, Bangkok, Yangon, Jakarta, Ho Chi Minh City and Kolkata as the cities facing the most risk from the onset of climate change.

Maplecroft’s Climate Change Vulnerability Index (CCVI), which forms a central pillar of the Atlas, classifies seven cities as ‘extreme risk,’ out of a list of 50 that were chosen for their current and future importance to global business. Dhaka, Bangladesh, (ranked 1st), Manila, the Philippines (2), Bangkok, Thailand (3), Yangon, Myanmar (4), Jakarta, Indonesia (5), Ho Chi Minh City, Viet Nam (6) and Kolkata, India (7) emerged as the most at risk from the changing temperatures and weather systems that are predicted to take hold in the coming years.

The CCVI has been developed by Maplecroft to identify risks to populations, company operations, supply chains and investments in 197 countries. It evaluates exposure to climate related natural hazards; the sensitivity of populations; development; natural resources; agricultural dependency; research and development; government effectiveness and education levels.

With strong economic growth of above 5 percent forecast for countries such as the Philippines, Viet Nam, Indonesia and India in the next few years, the relevance of climate change to populations and business in the major commercial centres should not be underplayed, states Maplecroft in its analysis. Long-term changes in temperature and rainfall patterns could have devastating effects on ecosystems, human health, industrial processes, supply chains and infrastructure.

“As global corporations expand into the emerging growth markets, their operations and supply chains will become exposed to a complex set of climate risks that have the potential to disrupt business continuity,” states Maplecroft’s Head of Maps and Indices, Helen Hodge. “It is essential for companies to identify where suppliers, assets and personnel are most at risk and plan for the long term.”

‘Extreme risk’ cities may see an increase in frequency and severity of key hydrological and meteorological events. Recently, we have seen major flooding in Yangon in 2008, Bangkok 2011 and Manila 2012, and such events could become both more frequent and severe in the future. Long-term changes in temperature and rainfall patterns could have devastating effects on ecosystems, human health, industrial processes, supply chains and infrastructure.

The vulnerability of cities in the growth economies stems not only from their exposure to climate related hazards, but also the sensitivity of their populations and the poor capacity of governments to support local adaptation measures to combat the potential effects of climate change.

A further 19 cities are classed as ‘high risk’ in the CCVI, including the important commercial centres of Mumbai (8) and Delhi (20) in India; Lagos, Nigeria (10); Johannesburg, South Africa (13); Rio de Janeiro, Brazil (21); and Hong Kong (14), Guangzhou (18), Shenzhen (19), Wuhan (23) and Shanghai in China (24).

Chicago, London, St Petersburg, Paris and Madrid were the only four cities to be classified as low risk.

http://maplecroft.com/about/news/ccvi_2013.html

•Date: 16th Nov 2012 • Various •Type: Article • Topic: Operational risk management

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