UN: Green concerns set to hit firms

climate change

Growing environmental issues such as climate change and water shortages are set to hit businesses from the power sector to the tourist industry, a United Nations report has warned.

Rapid changes in the global environment will increasingly effect operating costs, markets for products, the availability of raw materials and even the reputation of businesses across a range of sectors, the UN Environment Programme (UNEP) study said.
But while there are huge commercial risks from extreme weather events, a loss of wildlife and habitats and growing pressure on limited natural resources, there are significant opportunities for businesses that seize the initiative.

The report examined the impact of environmental changes the world is facing on a range of sectors, including building and construction industries, power supplies, finance, food and drink, healthcare, technology and tourism.
The future of the private sector will increasingly hinge on the ability of businesses to adapt to environmental changes and develop new environmentally-friendly goods and services, UNEP warned.

Climate change, which is set to increase extreme weather such as floods and droughts as well as push up temperatures, is a key concern. Severe floods in Australia in 2010-2011 resulted in 350 million US dollars (£250 million) claims to insurer Munich Re, contributing to a 38% drop in quarterly profits, while the same extreme conditions saw mining giant Rio Tinto lose 245 million US dollars (£158 million) in earnings.

Rising temperatures will hit tourism businesses, with fewer than half of the ski resorts in the north east US likely to be viable in 30 years if winter temperatures increase, while the growing zones for food crops will shift as local climates change.

Power companies will need to toughen up infrastructure or move it to protect energy supplies from extreme weather, while transport networks are also likely to be more frequently disrupted.

UNEP executive director Achim Steiner said the report outlined the risks faced by businesses from rapid and accelerating environmental change, but also the need and demand for new sustainable products and market opportunities.

"The report speaks to the reality of climate change and natural resource scarcities and outlines how more creative decisions by the private sector with longer term horizons may assist in meeting these challenges. It makes the case that whether it be in water saving or climate-proofing infrastructure, the world is going to look for solutions that in turn will drive corporate competitiveness, reputational risk and a transition to an inclusive green economy."

© 2013 Press Association
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