Few firms analyse business impacts of climate change

Only 38 per cent of the FTSE 350 companies that report their climate change activity to the Carbon Disclosure Project say they’ve analysed the impact of climate change risks to their investors, according to a new report by Acclimatise.

“Building Business Resilience to Inevitable Climate Change,” a report sponsored by IBM, is based on responses
to the Carbon Disclosure Project’s annual request for investor information. The study highlights the need for FTSE 350 companies to adapt their businesses to make them resilient against the risks arising from inevitable climate
change and the direct and secondary impacts on their business.

According to the report, businesses and the financial markets need to address both emissions reductions and adaptation to climate change or they will only be addressing half the picture of climate change risks.

While few companies conduct any risk financial analysis, 87 per cent of respondents acknowledge they are exposed to the effects of climate change. The report finds that companies need to start adapting their business models and build resilient business processes and facilities to help protect their supply chains, operations and markets and to help understand the risks to their workforce, customers and the communities in which they are located.

“Climate change risk management and adaptation planning are crucial to business success,” said Jon Bentley, energy & environmental partner for IBM Global Business Services. “Our environment is changing and business leaders need to make smarter decisions to ensure plans are integrated throughout their business models to build truly resilient companies. It is not just the direct impacts of gradual climate change or extreme weather events that should be of concern. As people, companies and governments react to these changes, there is a risk of significant disruption to many of the markets in which businesses operate.”