Climate change is presenting UK businesses with opportunities as well as risks, according to this report commissioned by the Environment Agency and produced by Acclimatise. The report combines evidence from Carbon Disclosure Project (CDP) surveys of UK firms with new insights from a series of interviews with leading UK businesses.
When it comes to climate risks, the vast majority (86%) of the companies have already identified one or more climate-related risks to their businesses. This apparently high-level of awareness is, however, not matched when it comes to taking action to adapt.
Many of the identified risks (34%) are being managed through low-cost, “business-as-usual” approaches. The report also shows that 44% of companies do not know the financial costs of climate impacts. This suggests that far more needs to be done for UK businesses to understand the most cost-effective adaptation options.
The report also highlights the types of climate risks that UK businesses are currently aware of. Companies were more likely to identify direct climate risks (climate impacts directly affecting business operations) than indirect risks, such as reputational impact, and risks to employee retention.
With companies reporting that over a third of identified climate risks (36%) have a ‘high cost’ to their operations it is imperative that more action is taken to increase the resilience of business operations along the entire value chain.
The study further shows that UK businesses see market opportunities from climate change adaptation. Respondents identified one opportunity for every three risks from climate change and its impacts. Emphasizing the importance of taking early action to adapt to climate change, 33% of identified opportunities are expected to arise within three years.
As the report shows, UK businesses are already exploring opportunities that might arise from planning for climate change. The range of potential benefits goes from effectively protecting vital assets, to maintaining business continuity and gaining competitive advantages.