Research from risk management and insurance broker Gallagher has found that almost half (48%) of UK businesses have reported being impacted by climate change. Gallagher’s recent survey asked over 1,500 UK business decision-makers questions about their organisation’s climate preparedness and ongoing strategy, as well as the current impact of climate change events, delivering some startling findings.
The study found that the biggest impacts of climate change being reported by affected businesses were extreme weather events- such as flooding and heatwaves (52%), followed by increased operating costs (47%), supply chain issues (39%) and physical damage (35%). Concerningly, almost three-quarters of respondents said they were worried about the impact of climate change over the next ten years, with two-thirds saying a rise in global temperatures of 2°C would have a “significant” impact on their business. In some cases, the impacts of climate change have been so severe that they have seen businesses move premises (15%) or even change their business model (16%).
Neil Hodgson, Managing Director of Risk Management at Gallagher, said: “Climate change clearly poses a serious threat to British businesses – and the damage is already being done. The country is committed to reducing our emissions and reaching net zero by 2050 but, with half of businesses reporting impacts, it seems we are already on the backfoot.”[i]
Yet, even though businesses are saying they are feeling the impacts of climate change, 53%, or just over half of survey respondents, said that they have not taken steps to mitigate against climate-related risks, with a third failing to include climate change on their risk registers. This is despite climate change ranking behind the cost of living and the energy crisis as a priority issue.
Gallagher’s Neil Hodgson noted: “Despite the widespread concern, many businesses are failing to act to protect themselves from the potential impacts of climate change, whether that is investing in risk management measures in their premises, buying more green equipment or ensuring they have appropriate insurance.”[ii]
He added: “What is perhaps most concerning is that businesses do not believe themselves responsible for protecting themselves against climate change – instead believing government should prepare them. It is time businesses begin to act.”[iii]
This ties in with other previous research, such as a survey undertaken by YouGov and the University of Cambridge’s Institute for Sustainability Leadership (CISL) late last year, where it was found that 82% of UK companies believed government policies were necessary to bring about the change required to tackle the climate crisis, compared with 5 in 10 who thought business would drive the change required. The global study found that overall, eight in ten businesses said that they agreed government policies are necessary to deliver economy-wide change in tackling the climate crisis. This was most strongly supported by those in South Africa (89%) and least supported in Germany (just 56%). Contrastingly, almost all Indian business leaders surveyed (93%) said they believed businesses would drive the change required; this was compared to just 48% of UK business leaders and 58% of German leaders[iv].
Figure 1: Q. To what extent do you agree or disagree with the following statements in relation to tackling the climate crisis: Government policies are necessary to bring about economy-wide change.
Source: YouGov, CISL
Of those looking at climate mitigation, Gallagher found that a third had spent between £100,000 and £500,000 on measures, with just one in ten saying they had spent over £1 million. Most (56%) plan to spend over the next two years, but 14% said of this group said that costs would go beyond their current budgets, perhaps suggesting that spending plans are more of a pipedream than reality. Of those looking at future climate mitigation strategies, the most common measures being proposed are- committing to reduce carbon emissions (44%), reviewing their insurance policies (32%), setting a net zero target (32%) and investing in environmentally friendly technologies (32%). Of those methods which have already been employed, the most popular are reducing paper use (63%), using automatic lighting (60%), sourcing renewable energy (58%) and deploying LED lighting (58%).
[i] Half of UK businesses already impacted by climate change | Gallagher UK (ajg.com)
[iii] Ibid
[iv] Cambridge study: 70% of companies have a net zero plan in place, but 8 in 10 business leaders say government policies are necessary to deliver the net zero transition | Zero Carbon Academy
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
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