In a recent study of the FTSE 100, Carbon Clear found that only 41% of companies currently identify business opportunities and/or risks associated with climate change.
The finding in the research is highly disappointing considering that the study incorporates the UK’s largest and supposedly most forward-thinking companies.
Resource scarcity, energy security and environmental degradation are issues that are simply not going away.
Instead of hoping that Government won’t legislate too harshly or that modest CSR efforts will appease public opinion, the most well-resourced businesses should instead grasp new financial opportunities from climate change.
Of course for many companies this is no mean feat and it may require adjusting traditional business models. However, some businesses are demonstrating that it can be done.
Aviva sees the light
Aviva is one of the few FTSE companies to identify both risks and opportunities resulting from climate change.
It recognises that the timing, frequency and severity of insurance claims could significantly change in the coming years and that there is a potential for risks to be inaccurately priced.
As a result Aviva is taking actions that will not only limit the risk to its assets but which will also make it a more attractive insurer to potential customers, for example:
Flood risk assessment of all 28 million UK homes
Flood-mapping technology to pre-warn customers about impending threats to assets and properties
The company also recognises that investors increasingly want a diverse source of stable income, and that there are few better ways of achieving this than via the low-carbon economy, which is why it’s investing in solar parks and wind farms.
Aviva is also providing financial support for academic research about ‘stranded fossil fuel assets’ and is being transparent about the rate-of-return on its sustainability initiatives. This demonstrates responsibility and makes it more attractive as an asset owner.
More companies should follow Aviva’s lead and start benefitting from the changes which are undeniably taking place across the planet.
Government Consultation on Corporate Responsibility
Identifying risks and opportunities is one thing but some companies are still struggling with the basics of properly measuring and reporting their emissions.
That’s why amee strongly welcomes the introduction of Mandatory Carbon Reporting (MCR) and why we used a recent Government Consultation on Corporate Responsibility to call for the legislation to be extended beyond those on the stock exchange.
With companies such as BT now recognising the critical importance of Scope 3 by measuring emissions across their entire value chain, it’s likely only a question of time before all companies get into the habit of reporting their emissions and other environmental impacts.
The environment and business coalition Aldersgate Group wrote to Nick Clegg in May 2012 calling for an extension to MCR – a move supported by more than 10 leading organisations including M&S, Microsoft and PepsiCo.
An easy-to-use, free-to-access online directory like amee is a ready-made solution to this impending development.