Last reviewed 4 March 2020

Laura King considers the cost of climate change, the risks to UK businesses and what steps companies can take to adapt.

Increasingly destructive weather events

Floods, storms, cyclones and wildfires. Such forces of nature are rarely trouble-free and many come at a high financial and human cost. Indeed, a report compiled by Christian Aid, Counting the Cost 2019: a Year of Climate Breakdown, identifies 15 of 2019’s most destructive weather events and estimates that each of these cost over US$1 billion in insured losses — with four of the natural disasters costing 10 times that.

The report maintains that each of the 15 events has been scientifically linked to climate change, either after the event, or because the nature of the event was congruent with scientific predictions that had previously been made.

Although not covered in the document, the bushfires that recently raged across Australia are one worrying example of this. Fires that start earlier in the season, end later and burn with increased ferocity were predicted in a review commissioned by the Australian Government more than 10 years ago. Accurately, the 2008 report stated that the changes to the fire season would be “directly observable” by 2020.

Although the case studies highlighted by Counting the Cost show the disproportionate impact that climate change is having on poorer countries, richer countries are by no means immune. For example, Queensland in Australia was hit by record-breaking flooding causing significant structural damage estimated to cost US$1.9 billion; Storm Eberhard hit Europe with wind speeds exceeding 140km/hour, resulting in an insurance bill of US$1–1.7 billion; and two particularly strong typhoons moving across Japan cost between US$20–24 billion.

Climate risks to business

Weather-related climate risk is something that the UK also has to get to grips with. The Government’s 2017 Climate Change Risk Assessment (published every five years) sets out the risks and opportunities related to climate change in Great Britain.

In it, the top six areas of climate change risk are highlighted. Of these, the first two are directly linked to inclement weather, as follows.

  1. Flooding and coastal change risks to communities, businesses and infrastructure.

  2. Risks to health, wellbeing and productivity from high temperatures.

  3. Risk of shortages in the public water supply, and for agriculture, energy generation and industry.

  4. Risks to natural capital, including terrestrial, coastal, marine and freshwater ecosystems, soils and biodiversity.

  5. Risks to domestic and international food production and trade.

  6. New and emerging pests and diseases, and invasive non-native species, a­ffecting people, plants and animals.

The report is based on research presented in the Committee on Climate Change (CCC) 2016 evidence report, which is currently being updated. The technical chapter for business outlines several clear risks, again with many of the known risks directly relating to bad weather. It warns of the following.

  • The risk of flooding to businesses is high.

  • Severe flooding and coastal erosion could lead to a loss of coastal business locations, and will affect coastal businesses reliant on vulnerable infrastructure, eg power or access.

  • There will be deficits in the amount of water available for abstraction (a few areas in north Scotland and central and western England are exempt from this risk).

  • Exposure to the impact of extreme weather events across the globe will disrupt supply chains and markets, particularly networks that incorporate countries in sub-Saharan Africa and south and south-east Asia.

Although these risks are mostly well understood, in its progress report to Parliament last year, the CCC stated that “Many businesses do not have continuity plans in place for extreme weather and some may rely on insurance alone”, continuing that: “Despite evidence suggesting that the benefits of having a business continuity plan outweigh the costs of producing one, many businesses, particularly smaller ones, do not have one.”

How to mitigate and adapt to climate change

Regardless of how well the world mitigates against increased global warming, the effects of climate change will continue to be with us for decades to come.

There are two aspects to any business action: mitigation and adaptation.

Mitigation involves taking steps to reduce the impact the business has on climate change and is a key part of the current drive to deliver “net zero”. Adaptation involves ensuring that the business is well placed to deal with any unavoidable changes to the climate, and businesses should be making every effort to prepare for this.

In terms of dealing with climate-related weather events, the key is to develop resilience and understand the organisation’s exposure. In many cases, adaptation may already be considered as part of the organisation’s continuity planning. However, organisations should not assume that these emerging eventualities are already covered by existing emergency plans, and should review any business contingency planning with climate change in mind.

Some of the risks that might need to be considered are as follows.

  • If the organisation is in an area prone to flooding, it should develop a flood plan that outlines what to do in the event of flooding, as well as outlining measures to take to reduce the impact of flooding should it occur.

  • If the organisation is reliant on abstracted water, or large volumes of water, it should consider what to do should water become restricted. This might involve investing in technologies that are less water-intensive.

  • If the organisation relies on workers who spend long periods outdoors, consider how staff will be able to work if there is inclement weather that impacts on their ability to do their job.

  • Consider the impact bad weather might have on the ability for staff to turn up to work, for example if transport networks are disrupted.

  • If the organisation has a supply chain that is vulnerable to the impact of weather, consider how you can work with suppliers to reduce these risks.

Tools to help with adapation

There are a number of tools available that can help with adaptation planning. For example, the Adaptation Scotland website provides a number of presentations, case studies and checklists to help businesses perform a basic assessment of risks and opportunities.

In addition, new global standards are being developed to help organisations assess their risks. BS EN ISO 14090 Adaptation to Climate Change. Principles, Requirements and Guidelines was published in in June 2019 and provides a high-level framework for businesses to help them integrate adaptation across the organisation. The standard also provides guidance to help organisations understand the potential impact of climate change and how this can be used to make decisions.


  • Climate change has been linked to many natural disasters that cost billions of pounds in 2019 alone.

  • The UK is not immune from the effects of climate change, and is more likely to experience severe weather, including flooding and heatwaves which will have a direct impact on business.

  • As well as reviewing options for mitigating against carbon emissions, businesses should also look to build resilience.

  • Aspects of adaptation may already be included in business continuity plans.

  • Tools exist to help businesses adapt. For example, standard ISO 14090:2019 Adaptation to Climate Change. Principles, Requirements and Guidelines can be used to help an organisation integrate adaptation policies across the organisation and understand its specific risks.