All businesses must adapt to climate change 'now'!

Analysis of more than 165 responses to the FTSE 350 survey undertaken by the Carbon Disclosure Project, revealed that more than 90% of companies have a concern about the changing climate. However, most respondents provided little firm evidence that they are developing or considering "adaptation" strategies.

The report - 'The Adaptation tipping point: are UK businesses climate proof?' - produced by climate risk management specialists Acclimatise in association with the UK Climate Impacts Programme (UKCIP), warned that climate change will mean challenges for the way that the world does business in the future, but that innovative companies could now seize "new opportunities".

It also explains why adaptation will become an increasingly important issue for businesses, investors and the financial markets, in addition to the already important mitigation agenda.

The report emphasised that the climate was already changing, with a further 40 plus years of unavoidable change whatever the results of actions taken on greenhouse gas emissions.

'Ticking time-bomb'

John Firth, report author and managing director of Acclimatise, said: "In 2005, for the first time, the Carbon Disclosure Project asked companies not just about mitigating carbon emissions-but how they are adapting to the reality of climate change.

"The worrying fact is that, whilst awareness is increasing, this is not matched by positive action. This is a ticking time-bomb for UK business."

The report claimed companies had to realise that they needed to take practical action to manage the damaging effects of inevitable climate change on their operations and their business strategies now or be exposed to risk across a range of business sensitive issues. There was no choice between mitigation and adaptation - businesses must pursue complementary actions on both.

The study identified value, return and growth, brand reputation and credit rating as well as exposure to litigation and prescriptive regulation, as major risks unless strategies to combat climate change "are implemented now".

Impact examples

It also noted that the costs, risk and impacts of climate change would continue to increase over time, with more exposed sectors soon to reach the "adaptation tipping point" - when the costs challenged existing investor expectations of value, return and growth.

Directors, fund managers and all those engaged in giving professional advice faced an increasing litigation liability if they failed to build climate change into decision making.

The report looked beyond extreme weather events and provided examples of current climate change impacts on a variety of sectors - such as the decline of Scotland's ski industry, the impact on businesses of London's summer blackouts, switching to warm-tolerant varieties of crops and overheating computer systems.

A number of sectors recognised as "at high risk" were identified as showing low levels of concern about how climate change was impacting on their day to day operations, in particular the automobile and machinery, leisure and hotels and construction sectors.

Some sectors, such as insurance and some utilities, were showing an understanding of the likely impacts of climate change and were taking action to adapt, according to the report.

'The Adaptation tipping point: are UK businesses climate proof?' can be downloaded from the Acclimatise website - see link above/right.