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2/3 of Companies Report New Business from Climate Change
Two-thirds of companies reported new business opportunities from climate change
Business Implications of Climate Change
The 2007 published research report by KPMG and Global Reporting Initiative, entitled "Reporting the Business Implications of Climate Change in Sustainability Reports", shows that companies are quicker to report climate change as a new business bearer than a cause of risk.
Sample of Sustainability Reports
The research surveyed a sample of annual sustainability reports, published by international companies in the Financial Times’ FT Global 500 list that followed GRI’s Sustainability Reporting Guidelines.
According to the report, companies currently tend to report extensively on new business opportunities rather than on the business risks that stem from climate change and its effects.
Risk Management Reporting
Of the companies surveyed, 90 percent reported on climate change but only 20 percent reported any risks to their business from climate change. This data contrasts with recent evidence that climate change poses significant risk to the global economy, as documented in the UK government's Stern Report on the Economics of Climate Change in 2006.
Some companies reported on the risk of increased energy costs, but other risks such as the costs of complying with new regulations, weather related property damage, increased insurance costs, corporate reputation, and potential legal action were largely ignored. In comparison, a surprising two-thirds of companies reported new business opportunities from climate change, mostly related to emissions trading and generating emissions credits under the rules of the Kyoto Protocol.
"Over time more and more of these risks will be disclosed," predicts Professor George Molenkamp, KPMG Global Sustainability Services Chair, in answer to the low level of risk reporting in relation to climate change. "Investors have a lot of interest in these issues and companies need to be clear with them about the scale of the risks they now face."
Download Reporting the Business Implications of Climate Change in Sustainability Reports (PDF)
Edited by Carolyn Allen