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Impactful disaster relief: A growing ESG imperative

by Mohammad Ghazal

In 2019, climate experts said the planet was “dangerously close” to abrupt and irreversible changes. Since then, climate change has intensified, and so too have extreme weather events. With record-breaking heat waves leading to severe drought and extreme rainfall resulting in widespread flooding, disaster events are becoming more frequent and destructive.

Simultaneously, ESG is becoming imperative for companies, helping them to build trust with stakeholders, enhance consumer engagement and loyalty, and cement market reputation. Disaster relief is quickly becoming a key focus of their ESG strategies.

The recent and devastating earthquakes in Syria and Turkey, which have taken the lives of over 33000 people, are a frightening reminder of the power of mother nature and the consequences of weak governance, poor infrastructure and substandard construction practices. Yet, it also reveals the power of corporate social responsibility and the private sector’s role in relief and rebuilding efforts.

Relief efforts embedded in ESG commitments

Historically, governments and NGOs have led disaster response and recovery. The UAE, in particular, has become an emerging philanthropic power as the world’s largest donor of official development aid. However, as disaster events have multiplied, globally, funding for disaster recovery has not kept pace. In response, companies have ramped up their relief efforts. Between 2000 and 2015, for example, the number of companies that donated to disaster relief skyrocketed, while the average donation increased tenfold.

The corporate response to the disaster in Turkey and Syria shows the private sector increasingly realises the role it has to play in disaster relief. Deutsche Bank, Google, Amazon, Accenture, and many more, have all made crisis relief pledges, whether by making one-off donations to nonprofit organisations or establishing internal schemes to encourage employees to donate and then matching those donations.

It’s key to highlight, however, that when it comes to crisis relief, companies hoping to transform an unfavourable public image by donating will be unlikely to reap the benefits. Research has shown that “poorly regarded first movers” are, in fact, “punished” when providing disaster relief. This indicates crisis relief efforts made in an attempt to “purpose wash” will not hold weight in the court of public opinion, and further, relief efforts must be part of a broader corporate crisis resilience program by companies with robust ESG frameworks.

Assessing impact

Companies must consider how their efforts will be best utilised when providing corporate disaster relief. Working in partnership with governments and UN entities leading the humanitarian response in crisis areas, companies can better ensure they deliver aid in a targeted and efficient way.

Likewise, it is pertinent to note that research from George Washington University found that countries with a significant portion of aid from locally active companies received help faster and had a higher 10-year recovery level. Further, countries receiving more help related to a company’s core activities and specialisms also received aid more quickly and experienced “fuller recoveries.”

Subsequently, it is heartening to see how the Turkish business world has mobilised to provide crisis aid, with local businesses on the frontlines of emergency relief operations. According to ReliefWeb, the Turkish Enterprise and Business Confederation (TÜRKONFED) and Business for Goals, members of the OCHA-UNDP Connecting Business initiative (CBi), have brought together over 54,000 Turkish businesses to provide in-kind contributions, critical equipment and logistical services in areas affected by the earthquakes. Likewise, the Bridges of Goodness campaign, launched by the Emirates Red Crescent (ERC), has ushered in widespread support across the UAE for gathering and assembling relief supplies for Turkey and Syria.

While ensuring aid is provided based on local needs and by those with specialist training, it’s also key that companies continue to contribute long after the headlines fade. When it comes to crises across the board, the focus of contributions and aid is often on immediate relief, while long-term recovery is neglected. For this reason, it’s essential that more funding is provided to local grassroots organisations that will be on the ground in the long term to rebuild communities and repair infrastructure. Currently, only a small fraction of humanitarian funding is channelled to local nonprofits.

The future of corporate disaster relief aid

The IPCC warns climate change effects are already worse than expected. These climatic weather events will continue to happen concurrently alongside other natural disasters, geopolitical conflicts, and infectious disease epidemics. With growing disaster costs, there has never been a more important time for the private sector to get corporate disaster relief right.

Experts increasingly emphasise the need for climate adaptation strategies and funding, warning that funds are disproportionately being allocated to climate change mitigation when populations are already experiencing the devastating effects of climate change. Anticipatory cash transfers are one of the novel interventions being proposed here.

Collaboration between the public and private sectors will be central to meeting future crisis needs, and companies must contribute in both the short term and long term to enact real, meaningful change. Similarly, alliances between international NGOs and the private sector must extend beyond the short term so that impact assessments can be made and best practices adopted for better crisis preparedness in the long term.

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