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Businesses at risk

British businesses at risk of damages and disruptions from climate change
British businesses at risk

Climate change poses a real threat to British businesses, with flooding and water availability already causing significant damages and disruptions to the provision of goods and services across the UK, according to one of the authors of the ‘UK Climate Change Risk Assessment 2017’, published by the Committee on Climate Change.

’High risk’

Dr Swenja Surminski, lead author of the business and industry chapter of the risk assessment, highlights evidence of the growing impacts that climate change is already having on businesses in the UK.

She notes that there is now a ‘high risk’ of direct damages and disruption to businesses from flooding in many parts of the UK, and risks are expected to increase further in the future.

‘Whilst managing flood risks will be possible and affordable in some areas in others risks are expected to rise. Businesses therefore need to understand their exposure and not assume that authorities will manage risks on their behalf.’

Senior Research Fellow at the Grantham Research Institute on Climate Change and the Environment at LSE

UK businesses are also at risk from the effects of climate change around the world, Dr Surminski notes. For instance, extreme weather events are already disrupting supply chains and distribution networks in south and south-east Asia and in sub-Saharan Africa.

Dr Surminski and her co-authors point out that small businesses are poorly prepared to cope with climate change and that urgent attention is needed to increase their resilience to climate risks.

In particular, small businesses must prepare for the indirect effects of extreme weather. For instance, extreme weather can cause delays to deliveries and can prevent customers and employees from being able to reach the workplace.

‘The knock-on impacts of severe weather include disruptions to supply chains and distribution channels, and impacts on staff, leading to lost business and reputational damage. These can be as damaging particularly for small businesses as the direct impacts of severe weather.’

Senior Research Fellow at the Grantham Research Institute on Climate Change and the Environment at LSE

Limiting damages

Dr Surminski calls for the government to increase efforts to inform businesses of their current and future exposure to flooding and other extreme events, and to tell them how they can limit damages and disruptions.

She also calls for the government to promote growth in adaptation related goods and services and to support businesses in realising any potential opportunities arising from climate change. For instance, there may be increased demand for some existing and new products and services, such as engineering and consulting, tourism, insurance and other finance products, and agriculture and food.

‘The UK has expertise in many areas to develop climate-related products and services… To date evidence is limited on how the UK is performing in emerging adaptation-related markets at home and abroad. Opportunities to grow exports may be being missed.’

Senior Research Fellow at the Grantham Research Institute on Climate Change and the Environment at LSE

The chapter on business and industry concludes that the government has a clear role to play in helping businesses adapt to climate change by introducing policies, implementing regulation, sharing information and raising awareness.

Click here to read the full report, ‘UK Climate Change Risk Assessment 2017’.

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