A large proportion of work on climate change resilience by companies is being conducted without the need for extra funding, staff and skills, according to the Environment Agency.
The regulator used responses to the CDP’s climate change programme for 2013 and 2014 to analyse how businesses see the risks and opportunities presented by climate change and severe weather.
The agency found that firms had put in place measures to manage around 85% of the direct physical risks they identified. Companies described more than a third (34%) of the risks identified as being managed through low-cost approaches, with the most common being the integration of climate change in standard business systems, such as continuity or risk management plans and processes.
The majority of companies (86%) identified at least one direct climate-related risk, including extreme weather impacting assets, operations and supply chains. Indirect risks included demand for goods and services and changes in regulation.
Awareness is highest in those sectors operating large or long-lived fixed assets, such as companies involved in water supply, mining and quarrying, according to the agency's report. Sectors reliant on climate-sensitive raw materials, such as food and drink manufacturing, and those with complex supply chains are conscious of the potential risks posed by climate change.
The water, accommodation, food service and manufacturing sectors all report the greatest number of severe impacts. Sectors with a strong public-facing customer base, such as retail, appear to be particularly aware of reputational impacts associated with climate change, the report said.
The agency found that companies are investing in technologies and products to address risks, with the biggest proportion of investment focused on measures to deal with higher temperatures, followed by action to reduce water use and address flood risks.
Businesses identified approximately one opportunity for every three risks reported. The proportion of market opportunities identified by the financial and insurance sector increased from 12% to 18% between 2013 and 2014. These opportunities included weather insurance to protect crops and climate-related insurance micro-insurance .
The construction sector also increased the percentage of total market opportunities in climate change resilience, from 4% in 2013 to 10% in 2014. Market growth has been spurred by incorporating climate resilience into new developments, and retrofitting existing stock, the agency said.
Similarly, architectural and engineering firms and management consultancies had spotted market opportunities for climate-related products and services through their links with the construction sector.
The agency’s acting chair Emma Howard Boyd said: ‘Planning now for the impacts of severe weather and a changing climate makes good business sense and can have immediate benefits. For instance, if businesses can keep trading during severe weather they will not only retain customers, they may have the chance to win new ones.’
