We are almost at the end of winter season. This means in countries like Colombia that the balance is made up on damages caused by natural disasters for example. This year was particularly heavy because of Hurricane Iota that hit our islands (San Andres and Providencia)

Oftentimes when we listen to the news reports about these events, we see how floods are mud slides demolish houses or sometimes even entire neighborhoods. The most people affected are the ones that live in makeshift houses in informal settings. And when you listen closely, the wording most often used includes ‘accident’, ‘disaster’, ‘crisis’, and my favorite ‘Act of God’. Rescue teams are brought in to help the people. If the accident is scaled up to disaster level a bank account is opened, a song is written, and wallets open up while a plea to our to our hearts is made.

Observing these events, you kind of feel among the ‘lucky’ ones. Lucky that the wrath of nature did not descended upon you.

But, if all that were true, how could insurance companies develop mitigating instruments to protect us from climate risks?

It’s actually quite simple. Weather moves is predictable patterns. It is winter every year, which bring heavy rains, which causes floods and mud slides. Due to climate change many of these weather patterns are becoming more erratic. Winter times will bring more rains and Summer times will bring more droughts.

In order to further mitigate these risks, we need to understand the underlying ‘man-made’ structures that exist. Why is this happening in Colombia? There are many countries in mountainous regions. Switzerland is a country in the middle of the European Alps. During winter time they receive lots of snowfall. Which increases the risk of avalanches. Why aren’t we seeing natural disasters claiming many deaths in Switzerland?

Many people would claim you can not compare Switzerland to Colombia. Because Colombia is poor. I will get to that discussing Mental Models. You can also ask yourself why the Swiss won’t allow construction of houses close to areas with increased flooding or avalanche risk?

  • In Colombia we still allow people to build their homes in high risk areas.
  • In Colombia we build a new unprotected highway from our main port (Buenaventura) through a geologically unstable area.
  • In Colombia we suffer power cuts every time there is an electrical storm.
  • In Colombia’s largest cities we suffer horrific traffic jams every time it rains.

All of this we are taking for granted. If somebody from abroad asks us why this is happening, our answer is: “ This is Colombia”. But please feel free to fill in your own country. This is not unique to Colombia. Texas maybe?

This is our mental model. The story we tell ourselves. Things outside our control. Things we have to live with and will probably never change. But are they?

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Let’s bring it closer to home. The picture above, shows an example of the Iceberg Model. An example we all have lived through before in Colombia (and also abroad). As an employer or as an employee.

If there is a culture with little trust between Employer and Employee, certain structures are being introduced to mitigate risk resulting from distrust. We all know them. You need to be in the office at 8AM. Lunch at 1PM. At 5PM you leave the office. Next day, rinse and repeat. When you arrive at the office you swipe your access pass to check in and swipe again by end of the day to check out. You can make it even more advanced (in case of lower trust environments) with biometric data (eye scan, fingerprint scan).

And then we wonder why the same employee is late every Tuesday? All this fancy technology, and she is still late. But nobody ever asked her why she is late on Tuesday. Maybe it is because she needs to take her mother to a dialyses appointment at 8AM in the hospital?

Now the COVID-19 pandemic hits, and we are forced to work at home. And by some miracle these same employees that had to check in and out through fancy technology are actually checking in online every morning. Because they actually want to work, because they like it, because they are intrinsically motivated to do so.

Sometimes we need these extreme events, in order to break with our Mental Models and the stories we tell ourselves.

I am a strong believer that we need to change our mental model on Climate Change as well. This is not outside our control. Or the proverbial ‘Act of God’. Or the Wrath of Nature. Or Force Majeure. As an individual and as a business we can start with changing the story we tell ourselves.

A great way to reframe our way we look at Climate Change is through Sustainability. We can start looking to change our perspectives on our relationship to Environmental issues. Our current legal and financial frameworks have allowed us to externalize many of the environmental costs. We have taught ourselves how we can push environmental costs to our suppliers, to the communities, to our clients, to society, to the next generation.

More and more businesses now realize that they need to add Sustainability to the equation. Taking Risk and receiving Reward in a sustainable way.

Many governments are realizing that Climate Change and the lack of acting is affecting basic Human Rights of our citizens and people around the world.

We can change our mindset to one of Climate Action. Then we might be in a much better position to address these issues.