A new report commissioned by the Environment Agency says climate change is presenting UK businesses with opportunities as well as risks.

The report, ‘Business opportunities in a changing climate’ by Acclimatise, combines evidence from Carbon Disclosure Project (CDP) surveys of UK firms with new insights from interviews with leading businesses in the UK.

The CDP requests information on behalf of 822 institutional investors with US$95 trillion in assets, including questions around leadership and action in managing the risks from climate change, deforestation and water scarcity.

The primary evidence base for the report is the 2013 and 2014 CDP responses under their climate change programme. The CDP data have been supplemented by published reports on the state of the UK businesses exposure and resilience to extreme weather and climate change.

According to the report, when it comes to climate risks the vast majority (86%) of the companies have already identified on or more climate-related risks to their businesses. This apparently high-level of awareness is, however, not matched when it comes to taking action to adapt.

The report’s key findings include:

• 86% of companies identified one or more climate-related risks
• 34% of the climate risks identified are being managed using a low-cost, ‘business-as-usual’ approach
• 33% of the opportunities identified are expected to arise within 3 years
• Approximately 1 opportunity was identified for every 3 risks reported

According to the CDP data, the highest proportion of investment is being used to address risks associated with higher temperatures, followed by investments to reduce water use and address flood risks.

Other findings from the report conclude that 44% of companies do not know the financial costs of climate impacts and that 62% of the market opportunities identified by companies related to increased demand for existing and new products and services.

The report shows that UK businesses are already exploring the opportunities that planning for climate change brings and highlights a range of benefits; from effectively protecting vital assets, to maintaining business continuity, and even gaining a competitive advantage. Much of this work is happening within ‘business-as-usual’ budgets, and with no need for extra funding, staff and skills.

The UK has world-class expertise in this field with sectors such as manufacturing, finance and insurance, environmental and engineering consultancy, and construction already exporting products and services globally to help clients manage climate change impacts. Demand for these products and services will continue to grow, the report concludes.

Click here to download Business opportunities in a changing climate