Published on December 11th, 2017 | by Joshua S Hill0
Businesses Are Failing To Adapt To Climate Change Despite Extreme Weather Events
December 11th, 2017 by Joshua S Hill
While nearly half of companies expect climate change to impact their value chain in the next five years, only a quarter of companies are actually taking action to adapt or increase their resiliency to the effects of increasing climate change, according to a new survey from DNV GL.
Global quality assurance and risk management company DNV GL last week published the results of a new international survey conducted with more than 1,200 professionals from across Europe, Asia, and the Americas, in which the company set out to “assess and understand efforts to adapt to climate change and increase resilience in the private sector.”
“Companies are already feeling the impacts of climate change on their operations or see a high risk of imminent consequences,” said Luca Crisciotti, CEO of DNV GL – Business Assurance. “Despite this, our study records a lack of proactivity, with a minority acting to adapt or increase resilience. Are businesses underestimating how disruptive the impacts could be and how urgent it is to face this issue?”
Which Climate Change Related Hazards Will Have The Biggest Direct or Indirect Impact to your Organization?
The survey revealed that nearly 98% of companies expect at least one climate change-related threat will have a direct or indirect impact on their business, with temperature increases and heatwaves (55%), storms (44%), and floods (38%) being companies’ greatest concerns. Only 1 in 8 companies responded saying that climate change impacts on their companies were expected to be more than 10 years away (i.e., they all expected it to be less than 10 years) but, despite increasing awareness and concern over climate change impacts, only 1 in 4 companies (and 40% of large companies) said that they are already implementing adaptation or resilience measures.
“This is a small percentage compared to the threats they are facing,” explained Luca Crisciotti.
“Additionally, there seems to be a confusion between climate change adaptation/resilience and mitigation, as over 43% indicate actions falling within the broader definition of climate resilience. Mitigation efforts are crucial to reduce greenhouse gas emissions, but these will not help a company adapt to climate change or build resilience. That indicates that there is a huge potential to increase companies’ awareness of and preparedness for handling the effects of climate change.”
The survey revealed that laws and regulations (50%) and needs/requests from customers (43%) are the primary drivers for taking action to increase adaptation and resilience to climate change. Safeguarding the company, public concerns/corporate responsibility, and business continuity fall closely behind. However, there are four main barriers to climate change adaptation according to the survey’s respondents: the costs of implementing adaptation measures leads with 36%, followed by Lack of awareness (35%), Climate change considered to have limited impact (34%), and Lack of long-term focus (33%).
DNV GL also ranked 161 companies into a category they define as LEADERS — “a subgroup of companies that constitute frontrunners with regard to adaptation and resilience.” Companies were classified as LEADERS if they are already taking actions to adapt and increase their resilience to climate change. To the LEADERS, business continuity (55%) is just as important as laws and regulations (53%) when it comes to motivating their actions on climate change, and two-fifths of LEADERS (as well as large companies) believe that competitive advantage will spring from such actions.
“On the one hand, the frontrunners show there is an opportunity to adapt and build resilience while gaining a competitive advantage,” Luca Crisciotti added. “On the other hand, the report clearly highlights that we need to increase awareness and understanding of the importance of adapting and building resilience to climate change. We advise companies to start by assessing the risks and defining a strategic approach to tackle them.”