Climate-smart investment is in the best interest of businesses in Africa

The answer is a large-scale, long-term focus on science, disaster mitigation and recovery intervention

The 2019 climate action summit hosted by UN secretarygeneral Antonio Guterres urged corporations to take strong measures to stem climate-related disasters. Archbishop Emeritus Desmond Tutu wrote a piece published by the Financial Times on October 3 that advocated boycotts, sanctions and divestment to put pressure on corporations to take radical measures to halt further damage to the earth’s climate.

Youth activist Greta Thunberg is driving a mass movement lighting fires under governments, corporations and leaders to do much more.

But the economic aspects of Cape Town’s experience with the 2018 drought suggest we should take a more nuanced approach, building on the self-interest of the business community in climate disaster mitigation and response.

Data released by Western Cape (and Cape Town) trade, tourism and investment entity Wesgro shows how damaging the drought and water shortage was for the tourism industry, as it undoubtedly was for agriculture and the shortterm insurance sector. In the Cape’s tourism sector, year-on-year growth in total foreign direct spend a useful measure of the level of expenditure by tourists while on holiday from a high in 2016 of 13% to 2.2% in 2018. Booking trends indicate that, in light of the recent drought crisis, many tourists either postponed or switched their holidays to other destinations.

In the Western Cape, the total number of visitors maintained small year-on-year growth of 0.2% in 2018. But revenue is down, with declines in both guest nights and average daily rates of hotel rooms (-3% in 2018). Five-star hotels experienced the largest percentage decline in guest nights (-4% in 2018). The jobs created directly from the tourism sector decreased from a high of 198,417 in 2016 to 174,893 in 2018.

While you cannot attribute the adverse economic conditions solely to the drought (or the threat of a drought), these statistics should give pause for thought to business leaders and strategists. Droughts are projected to become more frequent under climate change. Built-in resilience in sectors such as tourism (occupied by an industrious and resourceful workforce) can be relied on only up to a point.

There is a real risk of continued decline within the tourism industry of both revenue and jobs slowed created in the local population if no targeted investment is made to combat the growing threat of natural disasters. While 2019 has shown signs of recovery, another few years of lower-thanaverage rainfall could easily result in a similar situation as in the recent past. What must business leaders do in response to these trends?

The short answer is large-scale, long-term investment in climate science, disaster mitigation and recovery intervention. Several academic papers and reports have been published on the lessons learnt from the Cape Town crisis. While creative (but sometimes severe) short-term demand-side actions were effective in limiting water usage, it was clear that there was a systemic issue arising from a long-standing lack of investment in infrastructure.

Beyond climate-smart investment, business leaders should be exerting maximum pressure on those with political power to invest in infrastructure. One without the other will still greatly affect business when a disaster occurs. Having a long-term mindset in industry and the government will ultimately result in economic benefits, as well as the additional benefit of a healthier and happier workforce and population.

The risks to the tourist economy intersect with other industries. Beyond tourism, most directly affected by the events of Day Zero are the shortterm insurance industry, agriculture and related food logistics and distribution. SA companies do business domestically, regionally and continentally, and are therefore exposed to other climate-related risks beyond SA Mozambique being hit by cyclone Idai being one example.

SA companies have a substantial footprint on the African continent, in mining, telecommunications, digital-subscriber TV, financial services/banking, logistics, leisure, retail and consulting businesses. Given their exposure to disasters and catastrophes on the continent, it is in the self-interest of SA businesses to invest in climate science and meteorological services across our vast continent.

Where can companies invest to help combat these risks? As a first step, building reliable infrastructure for advanced early warning systems is key. Across Africa the number of weather stations has actually decreased over the past few decades. More needs to be done to produce accurate and precise weather data, to provide the basis for forecasting systems to produce warnings. While there are excellent examples of endeavours to improve data coverage and reliability (such as the Enacts initiative led by Columbia University), more resources need to go into this essential foundation of forecasting disasters.

Next, it is essential to translate and interpret the data meteorological services provide. Therefore we need to provide actionable climate services, which must have the capacity to provide a detailed overview of climate and weather with the end-user in mind. In this way, those involved in industries from tourism to agriculture and the health sector would be able to act on forecast information to best adapt to the warnings of any incoming extreme weather conditions.

We also need to build a highly technical workforce with relevant expertise in climate science, disasters and recovery. This requires investment in science and technology education at every level. Moreover, high priority should be given to identify and enhance the work of centres of research excellence around Africa, which will no doubt require considerable financial investment. One such example is the University of Cape Town’s climate systems analysis group, but there are others on the continent too.

Finally, businesses and philanthropists should invest in building NGOs that translate complex science into understandable public education messages to encourage, promote and encourage behaviour change among ordinary citizens. It is difficult for ordinary citizens in poor countries to do the right thing when their day-to-day existence is consumed by the sheer desperation to survive. They must be assisted in developing climatesensitive habits.

Because they will acquire the expertise, some of these same NGOs could double up as entities that hold governments to account for their climate-sensitive policies, budgets and operations.

Governments rarely do the right thing unless pressed to do so. Holding the executive branch of government to account is the role of parliamentary oppositions, but some are too weak or distracted by internal problems to focus on the big picture, and this is the biggest picture of all.

● Parks is a postdoctoral research fellow at the Earth Institute. James, a former DA federal chair, is a visiting professor of political science and (nonclinical) paediatrics at Columbia University.