From loss of resources to supply chain issues, climate change is creating a knock-on effect that directly impacts businesses worldwide. If we continue our current trajectory with existing policies, research suggests extreme weather events could erase *$17 billion from the UK’s GDP by 2050.
With a predicted GDP of $5369 billion by 2050, the UK is on track to be one of the top 10 largest economies in the world, but climate change costs could reduce it by 3.3%.
While the scenario might seem far off, many organisations are already feeling the effects of extreme weather. Globally, 82% of executives say they’re concerned about climate change, with businesses in the US, UK, China and Australia admitting urgency.
Biggest climate threats to UK companies
There are several ways in which climate change can impact the economy and local businesses. Based on our current trajectory and policies, the nine biggest risks companies could face in the next century are below.
Looking to the future, the most considerable risk facing UK businesses is the impact of climate change on other countries. If the government starts losing trading partners, the cost to our GDP could be significant.
The second biggest climate threat is to coastal areas, with rising sea levels set to impact 5.4 million people. With expected damages predicted to total £68 billion, the cost of climate change could erase 0.56% of our GDP.
The third biggest threat is to overall health due to the impact of extreme heat in the UK, which could cause a 0.40% reduction in GDP.
Countries fighting climate change
Despite best efforts, according to the Climate Change Performance Index, no single country is doing enough to combat climate change today. To illustrate this, in its ranking of the top nations worldwide working hardest to mitigate climate change, the first three spots on the table are empty. Of the countries that do appear, the UK is among the top 10.
1-3: No one
4: Denmark
5. Sweden
6. Norway
7. UK
8. Morocco
9. Chile
10. India
What can you do?
In the UK, 8 in 10 SMEs consider climate action a high priority and are making efforts to reduce emissions in the following ways:
- 82% are reducing energy consumption and waste
- 64% are doing employee education
- 52% are updating facilities and equipment
The case for focusing on climate change has never been so crucial. With 75% of adults worried about it and ready to make lifestyle changes, businesses taking proactive steps to reduce their impact are also more likely to retain talent and gain new potential customers.
How to support sustainability efforts from the office:
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Reduce daily travel
Encourage employees to work from home 1-2 days a week to help reduce daily commuting for team members and/or promote the use of bikes and public transport for commuting.
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Rethink office waste
Try to reduce waste through office initiatives that look to eliminate paper and single use plastic. Incorporate training on waste reduction and disposal into existing training programs especially new employee inductions.
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Support team member initiatives
Encourage and reward activism by team members to reduce climate impacts.
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Partner with companies doing good
Develop a suppliers’ code of conduct that focuses on sustainability issues that requires suppliers and partners meet strict criteria.
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Build a culture of awareness around sustainability
Make sustainability part of the culture by assembling a green champion for each department and/or creating a role that is solely accountable for driving initiatives around sustainability. Aim to hold campaigns throughout the year that raise and improve awareness around current sustainability issues.
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Educate at board level
Make climate issues part of the broader conversation from the board level.
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*Method to work out a $17 billion GDP reduction:
- UK GDP is predicted to be $5369 billion by 2050 – source
- Climate change costs are projected to increase to 3.3% of GDP by 2050 – source
- 3% of $5,36,90,00,00,000 is $17,71,77,00,000
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