Letters from Sendai – No 3: Let’s do this together: The quest for private sector engagement

Posted on 17 Mar 2015 in

The United Nations World Conference on Disaster Risk Reduction (WCDRR) continues in Sendai, Japan this week. Swenja Surminski writes from the conference…

The devastating cyclone in Vanatu last weekend is a stark reminded of the urgency to make progress in the field of disaster risk reduction. Nonetheless, the scenes in Sendai this week are not too dissimilar from the marathon climate change negotiations we have come to expect each December.

It’s not only the style of the talks in Sendai that seem similar to a UN Climate Change Conference. The substance of the discourse here at the WCDRR seems familiar too.

Towards a new framework

What appeared to be a relatively uncontroversial discussion about the guiding principles for disaster risk reduction has now become a hot debate. There is plenty of talk about funding streams between developed and developing countries, of conditionality of commitments, and of justice and fairness. This is perhaps a sign of progress.

We are moving away from the rather toothless, ten-year-old Hyogo Framework for Action, but the current direction of travel still remains unclear.

Despite some optimistic comments from several negotiators, we are not yet certain that we will come away from this conference will an agreement. There are rumours that the adoption of a new framework will be delayed. Those who thought that disaster risk reduction is a relatively straightforward issue might have to think again.

Momentum for private sector engagement

The need for private sector engagement continues to be discussed, and it seems to be working. As one of the principles of the Hyogo Framework for Action, you’ll find references to private sector engagement in almost every official briefing document and concept note here.

A surprisingly high number of private sector representatives are here in Sendai. Most visible of these are the Japanese businesses showcasing their approaches to disaster preparedness. Delegates can experience earthquake drills, see solar powered emergency flood response kits and learn about the latest advancements in remote sensing for droughts.

Several global companies are represented through the UN Office for Disaster Risk Reduction’s Private Sector Advisory Group, whose member companies have all agreed to involve their peers and customers in the debate about climate resilience, as well as to integrate climate resilience into their investment streams.

There is an undeniable momentum. More and more companies are waking up to the business opportunities within the disaster and climate risk field.  However, far too often the discourse between public and private sector stakeholders seems to get stuck at the first hurdle. There may be a shared vision, but roles and responsibilities are far from clear, and misperceptions can hamper practical action.

Evidence of private sector responses

A new working paper from my colleagues at the Grantham Research Institute provides some useful observations on private sector responses to climate risks.

As the paper explains, there is growing understanding of what stimulates private sector action and how companies respond to new risks and opportunities, as well as what prevents many of them from engaging.

The outcome of this private sector engagement is far less clear. Does it make communities more resilient? Is there potential mal-adaptation? How do companies themselves measure success? These questions are being raised here in Sendai, but the discourse is largely limited to one sector: the insurance industry.

This is not surprising. The insurance industry has a long track record, particularly in risk assessment and data gathering. Insurance companies have also worked for many years with and different stakeholders in disaster and climate risk.  However, this conference in Sendai is focused very much on just a few leading global companies and the financial sectors in low- and emerging economies are not necessarily part of the discourse.

In many countries the capacity of the private sector to develop tools and products in response to disaster and climate risks is still very low – and examples of knowledge transfer within sectors are still rare. This is where private sector engagement might be most needed.

This is the second in a series of four commentaries by Grantham Research Institute members attending the UN World Conference on Disaster Risk Reduction in Sendai, Japan.