Half of UK businesses already impacted by climate change

27th April 2023

The effects of climate change have already impacted nearly half of UK businesses, and a similar proportion have been hit by extreme weather events, new research suggests.

The study of over 1,500 businesses also found that nearly three-quarters are concerned about the impact of climate change over the next 10 years, with two-thirds saying that a global temperature rise of 2°C would have a “significant” impact on their business.

The most common effects of climate change felt by British businesses so far are disruption from extreme weather events, including flooding, storms and heatwaves, followed by increased operating costs, supply chain issues and physical damage, cited by 52%, 47%, 39% and 35%, respectively.

The research by global risk management and insurance broker, Gallagher, also found that 15% of have already moved premises due to climate change, while 16% have been forced to change their business model.

“Climate change clearly poses a serious threat to British businesses – and the damage is already being done,” said Neil Hodgson, managing director of risk management at Gallagher.

“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.”

According to the study, the sectors facing the greatest pressures from climate change include hospitality and tourism, banking and finance, and retailers, demonstrating a significant threat to the UK’s service-based economy.

Of those affected by climate change, 23% have already claimed against their insurance due to damages, yet only 38% were able to say that their current insurance policy covers damage caused by climate change and natural disasters.

Interestingly, 51% believe that it is government’s responsibility to ensure businesses are adapted to meet the challenge, while only 16% think the onus lies with businesses.

“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,” Hodgson continued.

“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.”

Image credit: Shutterstock

Transform articles

‘Eco-anxiety’ under the spotlight at IEMA Connect 2023

Turning ‘eco-anxiety into eco-action’ was discussed at IEMA Connect 2023 this morning, providing key research and tips to help sustainability professionals deal with feelings of environmental despair.

21st September 2023

Read more

The UN has published its first official ‘global stocktake’ of progress tackling climate change since the Paris Agreement, which shows that ambition and implementation “must be accelerated rapidly”.

14th September 2023

Read more

The UN Environment Programme (UNEP) has this week published a plan to decarbonise the world's buildings and construction sector using an “avoid-shift-improve” solution.

14th September 2023

Read more

Almost half of UK adults feel worse about the climate crisis due to government policy, with one in six suffering with ‘eco-anxiety’, new research suggests.

12th September 2023

Read more

The UK needs a new public investment fund that provides green companies with finance in exchange for part ownership and a share of future profits, a think tank has suggested.

25th August 2023

Read more

Countries in the Global South are trapped in relying on fossil fuel production to repay debts, a new report from the charity Debt Justice claims.

22nd August 2023

Read more

A total of 25 countries – home to a quarter of the global population – face extremely high water stress each year, regularly using up almost their entire available renewable supply.

17th August 2023

Read more

A lack of expert staff at environmental organisations is undermining the UK’s government’s net zero and nature commitments, new research by the trade union Prospect has uncovered.

16th August 2023

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert