Nearly four out of every five businesses in many of the countries most vulnerable to the impacts of the climate emergency are already suffering the consequences of a rapidly changing environment.
The startling finding is contained in British International Investment’s third annual Emerging Economies Climate Report – a survey of its investee businesses in Africa, Asia and the Caribbean.
The report is being launched today at an event hosted in partnership with the Grantham Research Institute on Climate Change and the Environment and ODI, the global think tank.
The report revealed that 79 per cent of companies surveyed said that climate change was already impacting their business, up from 68 per cent in 2022.
It also found that 72 per cent of corporates surveyed had experienced an extreme weather event in the last five years with droughts, floods and heat cited as the greatest cause for concern.
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 varied across sectors and business types; financial services or fund managers cited fewer climate impacts, while corporates – particularly agricultural businesses – are facing more significant impacts.
While 86 percent of corporates said they are being impacted by physical and transition risks today, 68 per cent of financial services firms said the same.
Despite many respondents highlighting that acting on climate can be cost-saving and add long-term business value, they also noted they did not have the knowledge and resources to respond to climate risks and opportunities. Respondents to the survey said they would benefit from more technical training on how to respond to the climate emergency as well as targeted investment and policy and regulatory action.
Amal-Lee Amin, Managing Director and Head of Climate, Diversity and Advisory, at BII, said: “Businesses and entrepreneurs across the emerging economy markets in which we operate are on the front lines of the climate emergency. Their businesses are already feeling the significant impacts of the climate emergency.
Nick Robins, Professor in Practice – Sustainable Finance at the Grantham Institute, added: “This report shows the overwhelming demand among firms in emerging economies for targeted investment to enable them to respond to the climate crisis. For business and investors in the Global South, there is now a strategic imperative to scale up capital flows in ways that bring a just transition for workers and communities, shaping the transition so it boosts quality jobs and gender equality.”