Majority of firms in emerging economies are feeling the pain of climate change — Survey
About six in 10 businesses in Africa and South Asia have suffered the pain of extreme weather events associated with climate change such as storms, floods, and drought in the last one year.
The 2022 Emerging Economies Climate Report notes that worsening effects of climate change have impacted 58 percent of companies in the two regions have been devastated by occurrences associated with extreme weather, compared with just 48 percent of respondents in the previous year’s survey.
The study released by British International Investment, the UK’s development finance institution, says 68 percent of respondents said climate change is affecting their business today.
The most frequently reported physical climate event was flooding, where 40 percent of respondents said they have been affected by it. In all areas of the value chain, flooding was cited as the most common physical risk facing businesses across the regions under focus.
Drought (25 percent) was the second most reported physical climate event, with agricultural companies largely the most affected.
Further, 56 percent of respondents thought climate change threatened their businesses’ viability in the next five years, while 72 percent hold that climate change will set back plans to grow their business or investment portfolio in the next decade.
91 percent agreed with the view that organisations working to reduce their carbon emissions will be more successful in the long-term while 92 percent said better and more targeted investment is needed to reduce emissions and vulnerability.
In comparison to last year, the number of respondents adapting their strategy or financial planning in response to climate change increased from 69 per cent to 73 per cent.
Nearly half of respondents (48 per cent) are introducing new green or climate-friendly products, the survey shows.
Amal-Lee Amin Managing Director, Climate, Gender and Diversity and Advisory, at British International Investment, said that the survey highlighted the significant impact that the climate emergency was already having on businesses, but also the increased steps that companies were taking to adapt their operations.
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“The focus must now be on embracing emerging climate-friendly technologies, and embedding reduced emissions and increased climate resilience into business models and behaviours across all sectors.
“Developing countries – which are least responsible for causing climate change but among the most vulnerable to its impacts – are already feeling the brunt of the climate crisis. And many people living in these regions are already being affected,” she said.
“This year we have seen severe droughts on both sides of the African continent, the persistent drought in Somalia, for example, demonstrates links between climate change and a humanitarian crisis, whereas extreme rainfall in South Africa and devastating floods in Pakistan have directly led to the loss of many lives. These increasing extreme weather events will expose millions of people to acute food and water insecurity in Africa and South Asia in the years to come.”
British International Investment surveyed senior executives working across its portfolio of 1,300 companies and funds in Africa and Asia.
Questions in the survey were structured around the pillars of the Task Force on Climate-related Financial Disclosures (TCFD), which provides an international framework to help businesses disclose climate-related risks and opportunities.
Respondents were largely optimistic that COP27, the 27th United Nations Climate Change conference to be held from 6 to 18 November 2022 in Sharm El Sheikh, Egypt, will have a material impact on how countries address climate change.
At COP27, eyes will be on progress and initiatives that are delivering on commitments made under the Paris Agreement and in Glasgow.
