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.”
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