Top 10 Corporate Concerns On Climate Change

Companies worried about climate change impacts--especially water and political instability, but few have taken action.

Four Twenty Seven and the University of Notre Dame’s Global Adaptation Index (ND-GAIN), with support from Business for Social Responsibility published the 2015 Corporate Adaptation Report to generate insights into whether and how enterprises are preparing for the physical impacts of climate change.

1. What Are the Climate Risk Drivers of Greatest Concern?

Water scarcity and political instability driven by climate change are cited as the top two anticipated risks across sectors.

  • 16%: Water scarcity is the climate hazard of greatest concern for corporations
  • 14%: Social and political instability driven by climate change closely follows water.

2. How Will Climate Change Affect Businesses?

  • 70%+: Are “somewhat concerned” that climate change will have a material impact on their value chain, in particular their supply chain, distribution and customers and markets.  
  • 66%: Expressed concern over increased operational and capital costs, reporting they had already experienced cost increases or considered them a likely in the future.
  • 30%: Faced or are experiencing impacts from climate change that negatively impact their bottom line.
  • 20%: Are “very concerned” about the material impact on their value chain.

3. How Do Companies Assess Climate Risk?

  • 43%: Monitored climate risk in some capacity as part of their enterprise risk management.
  • 30%: Haven’t developed a plan to adapt their business to climate change impacts. 
  • 29%: Are looking at a specific driver of concern.

4: How Do Companies Obtain Information on Climate Risk? (In order of importance)

  • Publicly available data, reports and websites.
  • industry associations and/or non-profit led initiatives.
  • Internal sustainability teams.

5. Who Within an Organization Should Be in Charge of Climate Adaptation?

  • 28%: the sustainability team.
  • 24%: risk management team.
  • Respondents were least confident in the level of understanding of climate change held by their investor relations, their supply chain team, and Board of Directors.

6. Have Companies Already Implemented Adaptation Measures? (In order of importance)

  • Energy and water efficiency; 
  • Business continuity plan.
  • Staff training on risk management.
  • Retrofitting or relocation of company assets are are under consideration.
  • Few  respondents reported having already implemented retrofitting.
  • None reported relocation of assets as a current measure.

7. What Are the Main Barriers to Corporate Adaptation?

  • Not an immediate priority
  • Lack of leadership on climate change. 

8. Is Climate Change a Material Risk Now?

  • 33%: Expected impacts in the 5-20 years.
  • 30%: Climate change has already had a material impact.
  • 20%: Did not expect impacts for at least another 20 years.
  • Few expected short-term material impacts from climate change (1-5 years).

9. What Are the Next Steps in Assessing Climate Risks?

  • The most common is engaging with key industry groups to build consensus on sector-wide initiatives.
  • The need for additional research and data was cited as a priority.

10. What Opportunities Might Climate Change Bring for Your Company?

  • 25%: Anticipated opportunities for new product creation and for efficiency improvements.
  • Opportunities typically associated with sustainability programs, such as brand development and cost reduction, ranked far lower.

Download the full report.