Under the weather

6th February 2014


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Related tags

  • Supply chain ,
  • Corporate governance ,
  • EMS ,
  • Mitigation ,
  • Adaptation

Author

Jason Collins-Webb

As flooding and storms continue to savage the UK, Nick Blyth argues that the inclement weather is a warning for businesses about the risks of climate change

Since the end of 2013, businesses across the UK have been hit with a large and unwelcome dose of extreme weather. Coastal regions have been battered by vast waves and strong winds, while many other regions have suffered from flooding with rivers unable to cope with record levels of rainfall.

Climate science indicates that incidents of flooding and extreme weather are set to increase. At the simplest level, scientists point to basic physics; warmer air can "hold" more moisture. The strong likelihood is that in a warmer climate heavy rainfall will increase leading to more intense or extreme weather events.

While individual incidences of inclement weather cannot be proven to be the result of changes to the world’s climate, for many businesses the debate is irrelevant because bad weather is already hitting their bottom lines. Around 65%% of UK businesses have suffered supply chain disruption, according to a poll by insurance firm Zurich, and 70% of CDP participants say that climate change has the potential to significantly affect their revenue.

In the UK, one-quarter of days in 2012 were officially in drought and 20 million people were affected by hosepipe bans. However, by the end of the year, 2012 also delivered the wettest summer on record. River levels tripled and flooding hit almost every region with costs to the economy at around £600 million. Estimates indicate that the impact on businesses was in the region of £200 million, with property damage alone costing £85 million.

In response to these direct costs and concerns over future impacts, businesses, particularly multinationals, are starting to build resilience into their supply chains and operations. They are recognising that early planning for the impacts of severe weather makes good business sense and, potentially, offers future competitive advantage.

However, relatively few small businesses are taking measures to address and adapt to climate risks – research shows that around 90% of small and medium-sized enterprises (SMEs) have inadequate flood insurance.

Often the efforts of environment and sustainability practitioners to address climate change risks are hindered by short-term planning horizons, especially as many organisations are still feeling the impacts of the 2008 economic meltdown and the slow economic recovery. Many companies simply do not see a business case for actions that offer no immediate financial advantage.

That said, the tide of awareness does appear to finally be turning. The ongoing floods and bad weather have seen adaptation and resilience moving up the business agenda. Respected business bodies, such as the CBI, are now promoting the need for action: “Tackling climate change means using energy more efficiently, future-proofing businesses against climate threats and moving business operations towards carbon neutrality,” states the CBI’s website.

To support this growing awareness, a range of guidance is now developing for companies on how to be pro-active and address the impacts of climate change. The Environment Agency has an important role in providing advice to both public and private sector organisations through its “climate ready” service. Meanwhile, IEMA, in partnership with the Agency and Defra, has developed guidance for practitioners on how to build the business case for climate change adaptation.

Flooding and extreme weather events are forcing businesses to consider their vulnerabilities and dependencies. The good news is that there is a growing understanding that taking action is possible and that a real business case exists to develop organisational resilience to climate change and extreme weather impacts.


Nick Blyth is IEMA’s policy and practice lead on climate change


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