Over three quarters of global businesses leaders recognise the bottom line risks from the direct impacts of climate change, according to a new report from the Carbon Trust. However, the paper notes that many businesses are failing to have a clear vision of how they will adapt considering sustainability challenges.
The report aims to explain how large businesses are responding to climate change and resource scarcity, both of which can affect productivity and profit, as well as assessing long-term opportunities and risks.
The paper argues that businesses are “living in two realities”, recognising and accepting the risks and opportunities of an environmentally sustainable future but continuing to focus on the short-term. While the businesses involved in the research believe change will continue, most have no clear vision of how they will transition.
Half of business leaders questioned for the report believe they would have to fundamentally change products, services or business models, if drivers for environmental sustainability become stronger. While 76% recognise the bottom line risks of climate change, 84% also see business opportunity.
Sir Mark Moody-Stuart, chairman of the foundation for the UN Global Compact, comments in the publication, “The report highlights the dichotomy of the two realties acknowledged by most businesses – the needs which must be met today, while beginning on what is often still a relatively modest process of change, and the very much more radical changes needed if we are to meet what can sometimes seem still distant challenges.”
He added, “This gap in perceived realities has closed only modestly over the last twenty years. Closing it at the required speed will regard unprecedented alignment and combined action by business, investors, governments and consumers. No one group can achieve progress without the support of others.”
The report suggests that businesses ask themselves a number of questions to assess company value at stake. For example, how will awareness of the risks of climate change and other sustainability issues affect consumer demand, what impact will incoming regulations have and how increased investment scrutiny could impact investment in the industry they operate in.
Photo: Victor1558 via Flickr
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