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Business and services
Climate change represents a potentially significant issue for all business sectors in the UK and the degree to which individual organisations are affected will depend on their level of vulnerability, and adaptive capacity. For those businesses that take on the challenge, there are potentially significant commercial and competitive advantages to be gained. International impacts of climate change on UK businesses overseas activities or supply chains may also be particularly important.
The Climate Change Risk Assessment (CCRA) identifies the main climate challenges to businesses, such as flooding and coastal erosion, increased competition for water, and disruption of transport and communication links.
The business sector report looks in detail at the risks facing five sub-sectors which meet these criteria, namely:
- financial services
- tourism
- food and beverage manufacturing
- primary extractives (oil, gas and mining), and
- chemical manufacturing.
The CCRA identifies the main risks and opportunities to the Business Sector as being related to flooding, heat and water resources. In many cases climate change may simply lead to an increase in existing risks rather than creating new risks.
Risks
- Possible decrease in output for UK businesses due to an increase in supply chain disruption as a result of extreme events.
- Risk of increase in monetary losses as a result of interruption to business from flooding.
- Greater variability in the availability of water.
- Potential loss of staff hours due to high internal building temperatures (assessed as being of particular relevance to the health, education and retail sectors, which have large workforces).
Opportunities
- Possible increase in market opportunities such as tourism and leisure industry.
- Delivery of adaptive measures (products and services) as part of the move to a low carbon economy.
The analysis highlights how inter-connected the Business Sector is with other key themes in the CCRA e.g. a significant number of top risks for businesses relate to flooding, and impacts on the food and beverage sub-sector will cascade to the agriculture sector and vice versa. Businesses therefore need to be aware of these relationships to understand the risks they have to manage.
In developing the National Adaptation Programme we want to work collaboratively with wider stakeholders to consider our collective response to these risks and opportunities.
Questions
- Do you feel that your organisation understands how future climate and weather risks may (or may not) affect its performance? Is this a problem?
- In your organisation, what do you feel is the most urgent action needed to adapt to the risks identified in the CCRA? You can also include international climate impacts feeding through to the UK where you think these relevant.
- If you think that your organisation needs to do more to adapt, what is stopping you? To what extent do you think your organisation/sector can do what is needed without Government intervention?
- Do you have examples of innovative ways of assessing your resilience or adapting to our current and future climate, which you would be happy for us to share with similar organisations and sectors?
- Is your organisation aware of any potential opportunities presented by climate change? What is your organisation doing to make the most of any opportunities? Please also cover any opportunities arising from international climate impacts.
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Hello, I think you should revisit the methodology if you want to attract the interest of business. The best part of the analysis is that of understanding the areas of vulnerability of different sectors. The subjective filtering of 700 to 100 threats strikes me as a poor use of time and resource give we are dealing with high levels of uncertainty over the timescale and impact of climate change. The government’s commentary on the CCRA is actually better than the CCRA itself in attempting to pull out the consequences for business, specifically manufacturing. I was surprised that the financial impact of climate changes was confused with the impact on the financial services sector. The other issue of course is that the planning horizons for (most) businesses do not fit well with the time horizons that you are considering in the assessment. Time and resources are tight: I’d recommend more time on thinking about impact and sectors rather than brainstorming every conceivable threat.
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There is a need for increased levels of climate change – business action planning, mitigation/ adaptation activities, and project delivery within the SME sector, which would help demonstrate how practical improvements in energy efficiency and resource management can be highly cost-effective and complementary with increased productivity and reductions in green house gas emissions. High priorities include: helping businesses to become more self-reliant and resilient in terms of energy generation, nutrients, and water. Government may consider it approporiate to engage further with the SME business sector, to accelerate the step change required, and the Cotswolds Conservation Board is providing dedicated climate change – business advice and support within the Cotswolds AONB to help support climate change adaptation and mitigation activities.
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I agree with Lee Glendon that the methodology is a poor choice. Climate is probably changing in ways we are trying to understand, leading to UK weather changes we are trying to understand, that will have effects on us we are trying to understand and plan for.
Trying to parcel that up into ‘risks’ and ‘opportunities’ is just complicated and confusing. Subjective filtering of hundreds of possible effects is time consuming, unreliable, and so inefficient and distracting.
The irony of this ‘risk’ based analysis is that, if climate change becomes a predictable certainty, then there will be no ‘risk’ to adapt to, but still plenty of adaptation to do.
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