Aabroo’s Construction Service Business

“It’s great to meet you all today and learn about your ambitions.”

Tashi rubbed his hands together and perked up in excitement.

“The curiosity about climate risks keeps coming up here. Before we get into a discussion on actions we can take to make our businesses climate-resilient, let’s share some cases of exactly how climate risks affect businesses. Yesterday, Lalima and I discussed broadly about the different climate risks, but more on a macro level. While the macro level gives a broader understanding, it blurs the specific impacts that any particular sector or, in this case, MSMEs might experience.”

Tashi turned to Aabroo.

“So, Aabroo, climate change causes an imbalance in the natural ecosystem and this translates to possible climate risks that ultimately hamper business operations. Can you think of any example where climate change has affected…hmmm say… commercial or public infrastructure – a sector that is linked to your mother’s business?”

Aabroo took a while to respond.

“Actually yes. I was quite unaware until yesterday, but after Lalima called me, I started exploring data on climate change impacts in South Asia and came across a case in Bhutan. The urban areas of Thimphu and Paro are facing significant climate risks due to a combination of factors such as concentrated urbanization, fragile livelihoods of the vulnerable population, and vulnerable public and private assets and infrastructure. The municipal drinking water supply in Thimphu suffers from a deficit of water sources in winter due to reduced seasonal precipitation and damage to water pipelines in summer due to disruptions from landslides or flash floods. In Paro, during summer, the infiltration gallery, made temporarily of sand, stone, and debris dredged from the riverside, gets washed away by rains and swollen rivers during the monsoons. District-level hazard impacts due to historical flood events in Bhutan (Tempa, 2022) show that infrastructure damages were recorded above average in the Thimphu region.

Furthermore, of the 20,093 industries in Bhutan in 2018, 35% are located in Thimphu so, such climate-induced urban risks in the region will have an impact on Bhutan’s economy (Gross National Happiness Commission, 2019).

In October 2021, in Paro, paddy terraces were washed away by stormwater as the irrigation canal was too small to drain the water (Lhamo, 2021). This shows that inadequate climate-adaptive design of infrastructure affects the livelihood of people that depend on agriculture by posing a public risk, property damage risk, and income loss.

The Integrated Stormwater Management Plan of Thimphu (2021-2030) prepared by the Ministry of Infrastructure and Transport (previously Ministry of Works & Human Settlement) states that there is a lack of institutional arrangements for emergency response and recovery during events of urban disaster or flooding after sudden and heavy rainfall. The plan points out that the existing stormwater management system has been mostly built in an ad hoc manner and is inadequate to meet the drainage needs of a growing urban population in a changing climate regime.”

“That’s a very comprehensive example and paints a picture of the climate risk in both urban and rural settings of Bhutan. So,…”

Tashi stops his train of thought and realizes he must guide Aabroo toward translating the climate risks to business risks like her mother’s.

"How do you think all those risks will affect, say a construction business like your mother’s?"

Aabroo thought for a while.

“Say my mother and I plan to extend our services to Bhutan –for example, in Thimphu and Paro - and if we don’t understand these risks, our construction designs, be it for residential, commercial, or public infrastructure; will likely fail due to intensifying disasters, such as floods. If we design stormwater drainage in Thimphu, then we may not consider the projected extremities of surface floods, and thus, our projects will fail. This will negatively impact our brand, which, of course, leads to an unsuccessful service extension in Bhutan.”

“Understood.”