- Landmark survey by British International Investment reveals extent of the impact already being felt in countries most vulnerable to the climate emergency
- Flooding, droughts and extreme heat taking an increasing toll
In numerous countries highly susceptible to the repercussions of the climate crisis, an overwhelming majority of businesses—nearly 80%—find themselves grappling with the tangible effects of swiftly unfolding environmental shifts. This significant revelation emanates from the latest insights gleaned in the third annual Emerging Economies Climate Report, a comprehensive study conducted by British International Investment (BII) in conjunction with esteemed partners: the Grantham Research Institute on Climate Change and the Environment and ODI, a prominent global think tank.
Diving into the depths of the report’s findings, it becomes apparent that its scope extends across vast territories, encompassing meticulous assessments of invested enterprises spanning the diverse landscapes of Africa, Asia, and the Caribbean. Shedding light on the ground realities faced by these businesses, the report illuminates a stark truth: 79% of surveyed companies candidly acknowledge the palpable impact of climate change on their operations, marking a significant uptick from the 68% reported in the previous year of 2022.
Moreover, the report unveils another critical facet of the climate crisis narrative—72% of the surveyed corporations have weathered extreme climatic events over the past five years. From debilitating droughts to devastating floods and scorching heatwaves, these occurrences underscore the acute vulnerability of businesses to the unforgiving whims of a changing climate.
In the wake of such revelations, the urgent need for concerted action becomes all too clear. The report not only underscores the pressing nature of the climate emergency but also serves as a clarion call for proactive measures. It beckons policymakers, investors, and stakeholders alike to heed the call, rallying behind targeted interventions and policies that can shield businesses from the brunt of climate-related adversities while fostering resilience and sustainability in the face of uncertainty.
Other key findings included:
- 87 per cent of respondents agreed to some extent that they were concerned about physical climate risks – up from 70 per cent in 2022.
- 73 per cent of respondents agreed to some extent that they were concerned about the risks associated with a low-carbon transition – up from 66 per cent in 2022.
- More respondents are concerned about climate change affecting business growth and viability: 61 per cent thought climate change will affect the viability and growth of their business in the next five years compared with 56 per cent in 2022.
- More respondents agreed that climate action leads to more long-term business success and 97 per cent agreed to some extent that organisations that take steps to reduce their carbon emissions and reduce vulnerability to physical climate change risks will be more successful in the long term.
- The majority of respondents (65 per cent) have adapted their business strategies in response to climate change; and more are calculating their carbon footprint compared with last year (45 per cent).
Survey responses exhibited variation across sectors and types of businesses. Financial services or fund managers reported fewer climate impacts, whereas corporates—especially those in the agricultural sector—are confronting more substantial challenges.
While 86% of corporates acknowledged being affected by both physical and transition risks presently, only 68% of financial services firms reported the same.
Despite major respondents recognizing that addressing climate concerns can yield cost savings and enhance long-term business value, they also expressed a lack of knowledge and resources to effectively address climate risks and opportunities. Survey participants emphasized the need for additional technical training on responding to the climate emergency, along with targeted investments and policy and regulatory measures.
Amal-Lee Amin, the Managing Director and Head of Climate, Diversity, and Advisory at BII, emphasized the crucial role of businesses and entrepreneurs in emerging economy markets in confronting the climate emergency. He highlighted that these businesses are already experiencing significant impacts from the climate crisis.
Amin underscored BII’s commitment as long-term investors in climate finance to provide these businesses with the necessary capital and expertise. This support aims to empower them to actively participate in combating the climate emergency while ensuring their sustained viability.
Nick Robins, Professor in Practice of Sustainable Finance at the Grantham Institute, echoed Amin’s sentiments. He emphasized the pressing need for targeted investment to enable firms in emerging economies to effectively respond to the climate crisis. Robins stressed the importance of scaling up capital flows in a manner that fosters a just transition for workers and communities in the Global South. He emphasized the significance of shaping this transition to promote quality jobs and gender equality.
