91Ï㽶ÊÓƵ

Climate change is everyone’s business |05 May 2023

The climate crisis is changing the way we work and the way we live. All industries are threatened by the impacts of climate change, either directly or indirectly. Physical risks, such as flooding, droughts, coastal erosion, and sea level rise, tend to be the first threats that come to mind. With over 90% of 91Ï㽶ÊÓƵ’ critical infrastructure located on the coastline, these are of course of great concern. However, there are also other vast economic and social implications that businesses need to be aware of.

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How is climate change impacting consumer trends?

Climate change is bringing about different transitional risks, such as changes in consumer trends and demands. Businesses are adjusting their services and products in response to a rapid rise in environmentally and socially conscious consumers. A Global Sustainability Study in 2021 showed that, globally, 85 percent of people in the last 5 years have shifted their purchase behaviour towards being more sustainable. A particular sector that has felt this shift is the tourism industry.

As global climate change awareness raising campaigns continue to grow, such as ‘flight shaming’ in Europe, and climate change impacts become more visible, travellers around the world are also becoming increasingly conscious of their ‘carbon footprint’. According to Booking.com’s global research report in 2022, spanning 30,000 travellers across 32 countries, 81% of travellers confirmed that sustainable travel is important to them, with 50% saying the recent news about climate change has influenced them to make more sustainable travel choices. If businesses want to remain relevant in rapidly changing markets, then products and services need to follow the ecological transition.

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Climate policies and their impacts on business operation

There may also potentially be higher business costs from new policies, laws and other regulations designed to address climate change. Greenhouse gas emissions will be increasingly scrutinised, regulated, and priced, raising financial penalties and liabilities for businesses. Companies that continue to treat climate change solely as a corporate social responsibility issue, rather than a business problem, will risk the greatest consequences. Polluting businesses are exposed to potential litigation, but so are companies that fail to consider future climate change impacts in their products and services. This is the case for structural engineers that fail to consider increased intensity of rainfall in the design of drainage systems.Ìý

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Climate impacts can affect supply of raw materials

Physical climate impacts in other countries can also directly impact local businesses in 91Ï㽶ÊÓƵ. As a result of extreme weather events in source countries, prices of commodities might change because of supply shortages. Flour, wheat products and pastry cook products are important raw materials for local businesses, such as takeaways, restaurants, and bakeries. According to Import Trade Statistics for 91Ï㽶ÊÓƵ (2021), most of the raw material is sourced from South Africa and the United Arab Emirates (UAE). There can be risks of supply shortages as both countries are threatened by increasing heat stress.

It is therefore important to remember that your business does not have to be on an ‘eroding coastline’ to be vulnerable to climate change. Everyone will be impacted by this phenomenon.

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Contributed by S4S