Tackling Climate Change: The Public Sector Approach

Climate change continues to influence the frequency and intensity of weather events, with devastating and extremely costly implications. Andrew Millard, Public Sector Practice Leader for the North at Aon Risk Solutions, examines the public sector’s role in tackling climate change.

While the world was dealing with the pandemic, Aon’s Weather, Climate & Catastrophe Insight report found that climate change continued to influence weather patterns, with an above average number of natural catastrophes recorded in 2020.

Over the year, 416 notable disaster events were recorded, resulting in an economic loss of US$268bn, 10% higher than the 21st Century average.

Although it was far from the worst year from a financial loss perspective, there were a number of notable records set. The strongest landfalling storm was recorded – Typhoon Goni achieving a wind speed of 195mph in the Philippines – and the hottest temperature ever – 38⁰C – was seen above the Arctic Circle. It was also the second warmest year on record for land and ocean temperatures.

Given these trends, and the implications if they are left unchecked, tackling climate change has never been more pressing.

Public sector organisations have a key role to play in this, especially as many have already experienced the devastating effects of climate change. Research by the Local Government Association (LGA) ⁽¹⁾ found that eight out of 10 local authorities have suffered climate-related incidents in the last five years, including more than 23,000 properties affected by flooding. As well as affecting communities, these incidents can make the delivery of frontline services challenging.

The public sector is already taking the issue very seriously. The LGA research found that nine out of 10 local authorities have declared a climate emergency, with 80% setting a target to become carbon neutral. Although detail varies, common goals include becoming a carbon neutral council by 2030, with the area reaching the same target by 2050.

Local authorities have rolled out a wide range of initiatives over the past 10 years to achieve these goals. These include retrofitting buildings to make them more energy-efficient; investing in, or setting up, renewable energy companies; and encouraging a shift away from traditional combustion engine vehicles to more environmentally-friendly options such as electric vehicles and public transport.

Building more resilience into the community is also on the agenda. Factoring climate change risk into every planning decision ensures that, as more properties are built, communities are as energy efficient and resilient as possible.

Taking this approach can deliver financial benefit. For instance, figures from the Environment Agency ⁽²⁾ show that for every £1 spent on protecting communities, around £5 in property damages is avoided.

Government support is available to help fund initiatives. As an example, London local authorities recently called on the government for £115m to top up the £950m they were spending to retrofit energy inefficient buildings such as schools and homes.

Public sector organisations are also collaborating and partnering with other bodies such as universities and local businesses to share experiences and expertise. For instance, At Aon, our meteorologists and data analysts inform and support organisations in planning and preparing for the work being undertaken around climate change.

This type of collaboration is more important than ever. Austerity measures have hit public sector budgets hard and, with the pandemic forcing resources to be refocused, there’s even more pressure on the finances.

But the pandemic also brings some opportunities. As a result of lockdown, many communities were forced to reinvent themselves, with more people working from home and greater dependence on local infrastructure. Public sector organisations have an opportunity to factor in these changes around work and travel, many of which will continue to some degree after the pandemic, to build a better future.

Insurance has a role to play too. Through Flood Re, members of the public are able to access flood insurance to protect their homes.

The insurance market can also support public sector organisations. Modelling and data can quantify the impact of climate related events, with both conventional insurance and parametric solutions available to create an appropriate programme to manage the risk.

The scale of the climate change project cannot be underestimated. But, by working with other organisations, whether in the public or private sector, it will ensure that everyone pulls together to achieve their carbon neutral targets and creates more resilient and energy-efficient communities.

To discuss the issues raised in this article, please contact Andrew Millard.