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Climate Change And Business Sustainability

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<p>In geographical terms, a significant portion of Nigeria's territorial area lies along the shores of the Atlantic Ocean, boasting an 853 km long coastline. Millions of people live in Nigeria's coastal cities and towns, largely depending on the natural resources of the aquatic ecosystem for their sustenance and economic livelihoods.&nbsp;</p><p>The situation is similar in the hinterland crisscrossed by a network of rivers, lagoons, and lakes that defines the country's unique ecological and topological footprints.</p><h2><span style="font-size: 14pt;">Environmental Issues in Lagos State&nbsp;</span></h2><p>A peculiar case study is Lagos State, with a coastline of 180km, a population of over 24 million people, lying 2 meters below sea level, and classified by experts as the most vulnerable city to the adverse impacts of climate change in Nigeria.</p><p>Lagos State, the heartbeat of Nigeria's economy, has been experiencing rising sea levels on an annual basis, including tidal surge that is often attributed as the primary cause of flood whenever there is a prolonged rainfall between 2-3 days.</p><p>With the annual rainfall pattern usually occurring between the months of April-October and predominantly in the southern part of the country, it is normally expected that seasonal flooding may occur from time to time but quickly drain into the lagoons and ocean without causing necessarily substantial damage to life and property.</p><p><strong>Causes of flooding</strong></p><p>Aside from ecological disasters, man-made problems are major contributing factors to flooding in the country.</p><p>Examples of such problems are:</p><ul><li style="list-style-type: none;"><ul><li>Inadequate drainage channels</li><li>Indiscriminate dumping of waste in river channels and the lagoon</li><li>Poor waste management practices</li><li>Violation of physical planning regulations and building codes, deforestation activities, and removal of vegetation which serves as a natural buffer against flood impacts.</li></ul></li></ul><p>&nbsp;</p><p><strong>Recent Flood and its Socio-Economic Impacts</strong></p><p>The recent flood experienced across the country this year between August &ndash; October was unprecedented in terms of the magnitude of destruction. It wreaked on economic activities, human lives and properties, and particularly on the livelihoods of several farming communities.</p><p>Nigeria previously experienced massive flooding in 2012 and 2019, but nothing compares with the scale and impact of this year's flood affecting 33 out of the 36 federations along the coast and in the dry savanna Northern ecology.</p><p>Local and international media reported quoting Sadiya Umar Farouq, Nigeria's Minister for Humanitarian Affairs, Disaster Management and Social Development, on the effects of the massive flooding. It was stated that over 600 people were killed, 1.4 million people physically displaced and now sheltered in temporary camps, 82,000 homes destroyed, and a total of 110,000 hectares of farmland completely submerged and destroyed,further exacerbating the food insecurity challenges in the country.</p><p>In this global era of climate change of unusual and unpredictable weather patterns, Minister Sadiya was quick to lay the blame on the doors of State Governments for not "making adequate preparations for the floods."</p><p>The direct economic impact of the flood was felt in the business operations of major organizations, which were caught completely off guard and suffered huge financial losses.</p><p>An example is the case of Olam Company's 4,500 hectares of rice farm worth US$15 million in Nasarawa State, where the floodwater completely submerged and destroyed infrastructures such as dykes, canals, and drainage worth another US$8 million.</p><p>Nigeria's NLNG 22 MTPA processing facility plant was also forced to declare a force majeure on 18 October 2022, citing the flooding in the operational areas of their gas suppliers. According to the company's official statement, "The notice by the gas suppliers was a result of high floodwater levels in their operational areas, leading to a shut-in of gas production which has caused significant disruption of gas supply to NLNG."</p><p>Nigeria relies heavily on oil and gas exports as the mainstay of her economy and to meet rising domestic energy demands. The global gas supply is already threatened by the Russian-Ukrainian conflict, adversely affecting the cost of living of millions in Europe, America, and Asia.</p><p>The flood also caused extensive damage to public infrastructural assets and major Federal Highways linking the north to the south, e.g., the Abuja-Lokoja-Okene Expressway and the East-West Road - the gateway to the oil-producing areas of Delta, Rivers and Bayelsa coastal States, disrupting the distribution of general petroleum products to fuel stations across the country. &nbsp;</p><p>According to a media report, the Federal Government is waiting for the floodwater to recede before ascertaining the extent and value of the damage caused to the roads, bridges, and highways across the country, likewise the total value of real estate properties destroyed that may run into billions of dollars.</p><h2><span style="font-size: 14pt;">Need for a Collective Approach&nbsp;</span></h2><p>From the foregoing analysis, there is a clear and present danger of Nigeria's key economic sectors of Oil &amp; Gas, Mining, Agriculture, Manufacturing Real Estate, Transportation, Banking &amp; Finance, Tourism, and other general services coming under severe climate change threats that floodwaters can together submerge in one sudden blow of a major ecological disaster.&nbsp;</p><p>Furthermore, it is highly debatable if any "adequate preparation" can ever be humanly made to completely combat the menace of flood from ever occurring in developing and developed economies due to the adverse effects of climate change and global warming.&nbsp;</p><p>It is now imperative for national governments, business organizations, and civil society organizations to collaborate and jointly develop and implement an Action Plan to mitigate climate change impacts and adapt local technologies toward addressing the climate crisis we face.</p><p>The responsibility to make "adequate preparations" to combat climate change impacts is a shared responsibility of both the government and the governed, with clearly identified roles, goals, and targets.&nbsp;</p><p>We all have distinct and mutually compatible roles to play in the sustainability agenda to prevent us from embarking on a "Highway to Climate Hell," as graphically warned by the UN Secretary-General Antonio Guterres at Egypt's COP 27 summit.</p><p>At a business level and on a sectoral basis, business leaders must do a comprehensive strategic assessment of floodwater risks and their impacts on the following areas:</p><ul><li style="list-style-type: none;"><ul><li>Business continuity plan</li><li>Contractual clauses</li><li>Location of operational sites, including backup/ business recovery sites</li><li>Supply chain issues</li><li>Transportation/product distribution</li><li>Employee health and safety issues</li><li>Energy</li><li>Insurance coverage</li><li>Credit facilities (availability and repayment terms)</li><li>Internal/external corporate communication strategies</li><li>Government's preparedness/capacity to handle emergencies over an extended period.&nbsp;</li></ul></li></ul><p>&nbsp;</p><h2><span style="font-size: 14pt;">National Policy on Climate Change 2012, Lagos State Climate Action Plan 2020-2025</span></h2><p>Lagos State, Nigeria's commercial capital, is adjudged to be the 5th largest economy in Africa in terms of Gross Domestic Product (GDP) with an aggregate value of US$79.256 Billion, which is the equivalent of 24 African Countries' GDP put together in billion dollars.</p><p>Lagos State accounts for over 60% of the country's industrial/commercial activities and serves as a major financial service hub, with most banks having their head offices and branch operations in the city.</p><p>However, this socio-economic status of Lagos comes with enormous environmental issues and puts heavy pressure on the government's limited resources to effectively address these problems.</p><p><strong>Zero-Carbon Lagos by 2050</strong>&nbsp;</p><p>A key feature of the Lagos State Climate Action Plan 2020-2025 developed by the government with the input of international experts and other relevant public and private stakeholders is an ambitious commitment to a zero-carbon Lagos by 2050.</p><p>The Climate Action plan document mirrors the strategic objectives, vision, and mission of the National Policy on Climate Change 2012 and aligns its goals/plan of action with those of the Paris Agreement on Climate Change.&nbsp;</p><p>In its climate risk assessment, the document identified the following major sectors as sources of total GHG emissions in the State:</p><ul><li style="list-style-type: none;"><ul><li>Energy (Generator) use in buildings and industry (55.1%)</li><li>Transport (19.6%)</li><li>Waste (25.3%)</li></ul></li></ul><p>&nbsp;</p><p>Finally, the Lagos State Government outlined 5 main goals, and 26 action points to reduce sensitivity, mitigate risks, increase adaptive capacity, and build resilience to climate change impacts.</p><p>See the diagram below for a summary of action points, targets, and implementation timeframes.<strong><span style="font-size: 10pt;"><em>&nbsp; &nbsp; &nbsp;</em></span></strong></p><p style="text-align: center;"><span style="font-size: 10pt;"><img style="float: left;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Kehindepic5.png" width="775" height="661" /></span><strong><span style="font-size: 10pt;"><em>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; </em></span></strong></p><p style="text-align: center;"><strong><span style="font-size: 10pt;"><em>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Source: Lagos Climate Action Plan: Second Five Year Plan 2020-2025</em></span></strong></p><p>The Lagos Action Climate Action Plan is a bold and commendable step by the government in articulating a clear roadmap toward addressing climate change impacts in the State.</p><p>However, a fundamental omission as it concerns the governance of the Lagos Climate Action Plan is the non-inclusion of civil society organizations, traditional institutions, and experts in the composition of the State Climate Change Council chaired by the State Governor.</p><p>While it is noted that the State Climate Change Forum and the State Technical Committee on Climate Change, both chaired by the Commissioner of the Environment and Water Resources, provide for some representation of selected NGOs, academia, youths, women, and vulnerable groups. The leadership of these strategic organs ought not to be concentrated in the hand of one political officeholder who also serves as the Vice Chairman of the State Climate Change Council.</p><p>International best practices on informed and inclusive participation recommend a representative of a civil society organization chairing the Forum while an academia or climate change expert presides over the work of the Technical Committee.</p><p>Stakeholder inclusion, including broad and adequate representation, are desired goal in attaining climate change objectives that cannot be left solely in the hands of politicians and civil servants who usually hold offices for a temporary or a limited period.</p><p>While identifying sources of public and private funding for climate change mitigation and adaptation programmes, the document was silent on the total annual budget required in the project implementation phases.&nbsp;</p><p>A firm commitment to dedicate a percentage of Lagos's GDP or annual budget to finance the detailed climate action programmes should have been included in the document to give some comfort in ensuring that projects commenced and completed within a given budget cycle.</p><h2><span style="font-size: 14pt;">Funding Climate Change Financial Commitments</span></h2><p>There is controversy on the issue of funding climate change financial commitments made by governments. Implementing proposed mitigation and adaptation initiatives are highly capital intensive, and funds may not be readily available to government and private organizations without raising taxes or imposing some levies.</p><p>A Climate Change Intervention Fund with sustainable contributions sourced from the world's developed economies, major international corporations, multilateral donor agencies, and national governments can provide the seed money to start making necessary changes in the short term while exploring the feasibility of introducing an ecological tax to be paid by companies with significant carbon footprints.</p><p>Governments should also be held accountable by the citizenry and civil society organizations for the judicious use of the fund to tackle climate change issues.&nbsp;</p><h2><span style="font-size: 14pt;">Conclusion</span></h2><p>It is obvious that Nigeria may witness another round of flooding in the coming years. The government has already warned the citizens to prepare for another round of floodwaters next year.</p><p>The devastating consequences of this year's flood incident should serve as a wake-up call to all concerned stakeholders to take decisive action by urgently introducing and implementing cost-effective intervention measures.&nbsp;</p><p>Enough of words, enough of unimplemented workshop communique, enough of unfulfilled pledges of political leaders, and enough of the blame game between developed and developing nations.&nbsp;</p><p>Now is the time for positive action to save our planet from destruction and safeguard our economic well-being for ourselves and the future generation.&nbsp;</p><p>The effects of climate change on families, communities, and business operations are real and can no longer be ignored.</p><p>&nbsp;</p><p><span style="font-size: 10pt;"><em>This article was contributed by our expert <a href="https://www.linkedin.com/in/kehinde-johnson-04065540/">Kehinde Johnson</a> &nbsp;</em></span> &nbsp;</p><p>&nbsp;</p><h3><span style="font-size: 18pt;">Frequently Asked Questions Answered by Kehinde Johnson</span></h3><h2><span style="font-size: 12pt;">1. How can businesses grow and deliver climate change priorities at the same time?</span></h2><ul><li style="list-style-type: none;"><ul><li>Integrating sustainability into all business strategy, planning, and operation</li><li>Reducing energy consumption and exploring the adoption of alternative renewable energy products with a view to reducing energy cost</li><li>Introducing paperless policy in the office</li><li>Conducting periodic audits to track and reduce carbon footprints over a timeframe</li><li>Encouraging work-from-home by employees to reduce vehicle emissions, virtual meetings, and car pooling</li><li>Installing effluent treatment plant to recover and recycle waste</li><li>Implementing Life Cycle Assessment programmes to reduce material wastes</li><li>Exploring using low interest rates green finance products for major eco-friendly projects &nbsp;</li><li>Getting recognition as a business leader for environment and social sustainability initiatives</li></ul></li></ul><p>&nbsp;</p><h2><span style="font-size: 12pt;">2. What businesses in Nigeria are affected by climate change?</span></h2><ul><li style="list-style-type: none;"><ul><li>Agriculture</li><li>Trade &amp; commerce</li><li>Road transportation &amp; general haulage</li><li>Real Estate</li><li>Construction</li><li>Mining</li><li>Hotel &amp; Tourism</li><li>Downstream oil &amp; gas (distribution of petroleum products)</li><li>Financial services</li></ul></li></ul><p>&nbsp;</p><h2><span style="font-size: 12pt;">3. What are some local solutions to climate change?</span></h2><ul><li style="list-style-type: none;"><ul><li>General attitudinal change required on the part of citizens and businesses on adoption of best waste management practices, e.g., waste reduction, waste recycling, waste sorting/segregation, etc</li><li>Promoting climate change campaigns in schools, business organisations and religious bodies</li><li>Banning on single use plastic bags and PET bottles</li><li>Regular clearing of canals and drainages ahead of commencement of raining season</li><li>Enforcing existing environmental regulations, physical planning laws, building codes and imposition of heavy fines on defaulters (Singapore model)</li><li>Promoting tree planting campaign and regulate/control deforestation activities</li><li>Government support of appropriate local technology to fabricate eco-friendly cooking stoves with a view to discouraging the prevalent use of firewood in the rural communities that is a major cause of deforestation, soil erosion and air pollution</li><li>Annual emission testing for vehicles</li><li>Government should place a 10-year embargo on future land reclamation activities</li><li>Introduce an eco-friendly public transportation system</li><li>Encouraging adoption of renewable energy by homes and businesses through tax incentives and rebates</li><li>Establishing a private-sector led Climate Action Fund with well-defined goals, governance, and responsibilities</li><li>Increasing government funding of climate actions/programmes in a sustainable manner.</li></ul></li></ul><p>&nbsp;</p><h2><span style="font-size: 12pt;">4. How many actions are set out in the Lagos Climate Action?</span></h2><p>Outlined in table below are the Lagos climate actions for each sector with significant contribution to GHG emissions and their respective implementation timeline:</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Kehindepic2.PNG" width="724" height="663" /></p><p>&nbsp;</p>
KR Expert - Kehinde Johnson