Exercise Module 3 Assessing Climate Change Business Opportunities Country, Date, Presenter

Objective The objective of this exercise is to: Identify new business opportunities for the case company that arise from new demands on national and foreign markets due to climate change Scout new business opportunities for the case company that stem from alternated production conditions caused by climate change Evaluate and prioritise business opportunities 04/12/2018 Title

Step 1 Step 2 Step 3 Step 4 Step 5 Identify target markets / production sites Identify climate change phenomena Identify climate change impacts Identify climate change opportunities Prioritize climate change opportunities 04/12/2018 Title

Step 1 Step 2 Step 3 Step 4 Step 5 Identify target markets / production sites Identify climate change phenomena Identify climate change impacts Identify climate change opportunities Prioritize climate change opportunities 04/12/2018 Title

Introduction to STEP 1 – Identify target markets and production sites In STEP 1 of this exercise you will identify target markets and production sites that, in anticipation of a changing climate, inherit the potential for the company to leverage new business opportunities Remember that business opportunities relate to new products or services developed for climate change adaptation to improved production conditions for input materials required for the production A target market or production site may refer to the territory of a whole country, a region or only the company area of a particular supplier Climate change impacts will occur around the world, so there are technically manifold business opportunities. For now, only consider those markets the company is already operating in as well as production conditions in regions where the company is already sourcing from For now consider the markets the company ais already operating in, as well as the production conditions in regions where the company pr their suppliers are already sourcing from 04/12/2018 Title

Step 1 Step 2 Step 3 Step 4 Step 5 Identify target markets / production sites Identify climate change phenomena Identify climate change impacts Identify climate change opportunities Prioritize climate change opportunities 04/12/2018 Title

Introduction to STEP 2 – Identify climate change phenomena STEP 2 of this exercise is to identify the climate change phenomena potent that give rise to new market opportunities. At this point, it is only the phenomena that are relevant. They should not yet be assessed according to impacts. This will happen in the next step. We have already determined climate change phenomena in Module 1. You should revisit these phenomena to see if they are relevant for the target markets of the company as well as its production sites Are there other phenomena in the target markets and production sites of the case company that you have not considered yet? 04/12/2018 Title

Step 1 Step 2 Step 3 Step 4 Step 5 Identify target markets / production sites Identify climate change phenomena Identify climate change impacts Identify climate change opportunities Prioritize climate change opportunities 04/12/2018 Title

Introduction to STEP 3 – Identify the climate change impacts STEP 3 of this exercise is about assessing the climate change impacts that the company can turn into business opportunities Climate change phenomena can have impacts on existing customers of the case company Climate change phenomena in certain countries or areas can make the products that the company produces relevant for new customers Climate change phenomena may make customers susceptible to products that the company does not yet produce but could produce easily Climate change may alter the costs and yields of inputs that the company uses or could use For example, increasing temperatures could affect vegetable quality in the target markets of the case company’s customers 04/12/2018 Title

Step 1 Step 2 Step 3 Step 4 Step 5 Identify target markets / production sites Identify climate change phenomena Identify climate change impacts Identify climate change opportunities Prioritize climate change opportunities 04/12/2018 Title

Introduction to STEP 4 – Identify climate change opportunities Do you recall the different types of products or services? There are two: Products that cater to new needs resulting from climate change and help cope with/adapt to changing climate Products which are easier to produce because of the change of climatic conditions In STEP 4 it is the goal to think of concrete business opportunities that address the impacts specified in the previous step. This refers to new products and services that allow adaptation to climate change as well as profiting from improved production conditions. Market opportunities are innovations developed on purpose to tap into new markets and make use of improved production conditions For example: A company’s irrigation experts may be interested to develop and market the efficiency- enhancing drip irrigation system as a response to decline in rainfall 04/12/2018 Title

Guidance for Participants – Identify climate change opportunities For this task you should Join your consultant group Identify relevant target markets and production sites; identify relevant cliamte change phenomena at these locations; identify resulting impacts; then come up with resulting business opportunities – both new products and production improvements Use the information exhibited in the case study but also become creative and come up with new opportunities Write the business opportunities on the corresponding card; also fill them in the form handed to you You have 60 min for this task 04/12/2018 Title

Guidance for Participants – Identify climate change opportunities Target market / production site Climate change phenomenon Changed conditions Business opportunity Spain Intense rainfalls Decreased resilience of crops to intensifying heat waves Protective nets Morocco Prolonged droughts Lower crop-per-drop water availability Efficiency-enhancing irrigation Italy Increased average precipitation levels Higher quality of vegetables Source from different location 04/12/2018 Title

Step 1 Step 2 Step 3 Step 4 Step 5 Identify target markets/production sites Identify climate change phenomena Identify climate change impacts Identify climate change opportunities Prioritize climate change opportunities 04/12/2018 Title

Introduction to STEP 5 – Prioritize climate change opportunities Market/Revenue: How large do you estimate the market scope of the opportunity, and hence, what revenue may issue from commercialization? Technical Feasibility: How complex is the technical implementation of the measure? Has a similar measure been implemented before? Organisational Feasibility: Would the company have the internal resources (e.g. financial, human captial, and time capacity) to shoulder the development of the product or service? STEP 5 aims at evaluating and prioritizing climate change opportunitites for your markets according to three criteria and their ranking proposition (handout) For each of the criteria, you have to match your opportunity to one of the suggested scores. In the end, you rank them. In this step you should come up with challenges and potential solutions, as well as additional benefits and synergies. These are not evaluated but are good to be noted for later Revenue / Market Demand 1 = a) The revenue would only be of marginal interest to the company b) The market demand for the product, service or innovation does not yet exist Technical Feasibility 1 = company has very few of the necessary technical means Organizational Feasibility 4 = high availability of the required organizational capacities and resources . Let‘s take the example of the protective nets: Although a promising innovation, market demand may be rather minor, while such low-tech products have small margins As SunCans® focuses on food processing, it has very few technical means to develop such a product However, the company would have both the capital and human resources 04/12/2018 Title

Guidance for Participants – Identify market opportunities Identified Risks For this task you should Join your consultant group Look into the descriptions of the point scale for each criteria Write the risk scores and priorities for each opportunity on the corresponding card; also fill them in the form handed to you You have 20 min for this task Protective nets: Market: 1 / TF: 1 / OF: 4 Efficiency-enhancing irrigation: Market: 3 / TF: 3 / OF: 3 Biological insect control : Market: 5 / TF: 4 / OF: 4 04/12/2018 Title

Discussion – Comparing results This exercise is about presenting the results to your peers and discussing how this is relevant for any real climate change adaptation assessment. After presenting the results discuss the following questions: Do you agree with the opportunities your partner identified, and how they were ranked? What are the difficulties in expanding to other markets, especially for your own company? 04/12/2018 Title

Thank you for your attention! GIZ Germany Ms Janina Wohlgemuth +49 (0) 6196 - 79 – 1245 janina.wohlgemuth@giz.de www.giz.de adelphi Germany Mr Frederik Eisinger +49 (0) 30 - 89 000 68 – 69 eisinger@adelphi.de www.adelphi.de 04/12/2018 Title