International Standards Are Tackling Climate Change Adaptation

Handle with the word Standard on it
This Creative Commons photo was taken by Dylan Pech.

Standards have immense leverage. They are a powerful way to slow the accelerating hazards of climate change. In November, during the side events at the 23rd Conference of the Parties (COP23) in Bonn, Germany, participants discussed what to do to use standards development to help nations take action on their Nationally Determined Contributions (NDCs).

On the final day of COP23, a group of standards developers met in the Bonn Zone to discuss the latest news on environmental-management standards. They were eager to share their thoughts on how standards could aid climate adaptation and financial disclosure.

Standards are the backbone of any climate-action implementation plan. They ensure stakeholders are comparing apples to apples and describe a specific level of performance. Therefore, they provide some certainty to investors who are concerned about the risks that plague vulnerable assets.

A good example of this exists in the appliance-efficiency market. Lighting Global developed a test procedure that was eventually adopted by International Electrotechnical Commission (IEC). It outlines testing requirements for off-grid appliances.

Now institutions like the World Bank are writing their implementation plans to include this specification for all solar-home systems procured through its energy access projects. And as a result, manufacturers who make these quality products and customers in rural Kenya who can now buy them both benefit. And it all started with a standard.

What Is the ISO 14000 Environmental Standards Family?

Before diving into what’s new, let’s outline the existing global environmental-management standards. The International Organization for Standardization (ISO) houses over 20,000 standards spanning processes, technologies and manufacturing. Its ISO 14000 standards include the environmental-management ones. ISO relies on the participation of 161 national standards bodies who contribute to the technical committees.

The first standard to emerge from the ISO 14000 suite was ISO 14001, which was produced in 1996. It helped organizations develop a framework for thinking about environmental impacts of business operations. Other standards within this family include ISO 14006:2011, which incorporates eco-design. Another one helps users quantify and report greenhouse gas emissions.

Once the development process is complete, certification bodies take action. This is how the various consumer products we use every day gain safety and efficiency ratings. The accredited laboratories and certifiers provide a guarantee of quality. Standards are invaluable to the economy because they provide transparency around quality. They verify a company’s claims are what they are stated to be.

How Are Environmental Standards Evolving?

Early standards helped organizations frame the issues around resource consumption. This includes water and energy. As more certifications are issued and norms established, we see an evolution in the types of environmental challenges institutions seek to address. In a sense, standards build norms that lead to more sophisticated measurement, verification and reporting.

Most recently, ISO standards are beginning to tackle hairier questions, such as:

  1. “How should environmental impacts and attributes be valued?”
  2. “What should the environmental performance of projects funded through a green bond be?”

To help organizations answer these questions, technical committees are currently hard at work drafting the frameworks for quantifying these attributes.

Now, ISO 14008 and ISO 14030 are looking ahead towards a future fraught with natural disasters exacerbated by a changing climate. Nick Blyth, policy and engagement lead at the London-based Institute of Environmental Management and Assessment (IEMA) said, “We know climate change is causing quantitative harm based on insurance claims submitted over time after natural disasters.”

Blyth also said there is a growing focus on climate change adaptation. This means the pipeline of future ISO standards will likely delve into monitoring adaptation. There are two adaptation standards under development (ISO 14090 & 14091). One will help organizations create a framework for adaptation. The other will issue guidance on conducting vulnerability assessments.

Stakeholders recognize that vulnerability to climate change varies on a regional basis. These guides to adaptation planning help organizations think about its effects at the state and local level.

Who’s Asking for Adaptation Standards?

Standards create powerful results when their effects are amplified in practice.

According to Kevin McKinley, acting ISO Secretary-General, the stakeholders and shareholders create demand for the development of new standards. Standards also provide resources for institutions that may not have the capacity otherwise to think about issues like adaptation and resilience.

In the United States, for example, the Federal Highway Authority (FHA) set the standard for transportation-oriented vulnerability studies when they issued the Gulf Coast Study in 2015. Widely heralded as a success for the adaptation and resilience sector, this study included a suite of vulnerability assessment tools and analysis reports.

This is an example of the kind of work that could signal demand to ISO conveners. Other planners who have seen the result of a vulnerability study but may not have the resources of the federal government may have an opportunity down the line to reference a roadmap for replicating the FHA.

Sea level rise estimates in Perth, Australia
This Creative Commons image shows sea level rise estimates
in Perth, Australia
.

Where Do We Go from Here?

It is no surprise that the conversations led by financial institutions at COP23 have directly echoed the impetus for standards in the ISO 14000 series. Co-led by think tank 2° Investing Initiative and the United Nations Framework Convention on Climate Change Secretariat, this standard will provide a framework and principles for assessing and reporting on climate change impacts to investments and financing activities. It is currently under development and has a target date for release in 2019.

At COP23, BlackRock, Bank of America, and other large global financial institutions had a strong showing. And this presence is likely driven by the effects Blyth observed –  that climate change will have adverse material effects on real assets. The investment companies that have a stake in these assets intend to predict how much climate change will cost them.

It will help the global financial community understand:

  1. impacts of investment decisions on GHG emissions
  2. alignment of investment decisions with climate goals (like the Sustainable Development Goals or NDCs)
  3. the value at risk for owners of securities due to climate-related risks

This standard has the potential to support environmental, social and governance-minded investors, unifying a wide array of stakeholders from all sectors. It’s still early; the proposal is currently in the “accepted” stage. But investors are undoubtedly eager to watch the proceedings unfold.

Standards development is very much in line with the basis for climate change solutions: it is a process that embraces transparency, equity and consensus.

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