Published: 3 June 2015 at 09:53
The Global Sustainability Institute and Mott MacDonald have published a report making clear that building climate resilience is essential to future business survival - and that doing so will also bring commercial opportunity.
The report, Climate change and business survival, projects that within 20 years, US$200bn of investment each year will be needed globally to combat US$1trn of losses from climate impacts. A third of this is likely to offer strong returns on investment. The balance will need more innovative public-private finance.
Investing in improved protection and better emergency planning will enable businesses to cut potential losses by half, and the most resilient organisations will be able to rebound swiftly from climate impacts, outcompeting less resilient rivals.
However, the report also highlights a looming US$130bn per annum global funding gap. This represents resilience and adaptation measures to protect against social and environmental losses. Tackling them will offer only a marginal direct business benefit, but is essential for business continuity as climate change worsens.
Climate change and business survival sets out the importance of:
The report is aimed at leaders and decision makers in business, financial institutions and government. It is intended to inform discussion and elicit action that will enable them to protect investment, productive capacity and service quality, reduce risk and sustain profitability.
Dr Aled Jones, director of the Global Sustainability Institute, said:
"Whilst we expect major steps forward in international policy on climate change at the Paris Conference of Parties at the end of 2015, business needs to be thinking strategically about building medium and long term resilience now.
"As highlighted in the report, a lot of the necessary action makes business sense today but increasingly the dynamics of public and private collaboration will be an essential part in delivering solutions."
Ian Allison, global head of climate resilience at Mott MacDonald, said:
"2015 culminating with COP-21 in Paris is an important year for international decisions that will shape how we deal with climate change.
"It is important that the international community takes action to further mitigate temperature rises below a catastrophic level. Even with this unprecedented rate of change society will need to be resilient to the increasing shock that arises from extreme weather and climate impacts.
"To build resilience across the globe will require up to US$200billion per year to be spent on limiting the economic disruption and costs that will arise from climate change."