Businesses deluded about bottom-line impacts of climate change

Four out of five companies believe that climate change and resource scarcity will impact their bottom line, yet they are failing to change their behaviour accordingly, the Carbon Trust has warned.

the Carbon Trust said that businesses were living in two realities, choosing short term profitability over long-term concerns

the Carbon Trust said that businesses were living in two realities, choosing short term profitability over long-term concerns

The sustainability-minded organisation carried out in-depth interviews with experts from business, government and academia, backed by a survey of 229 executives from large companies around the world.


As many as 84% of business leaders said there was a business opportunity in becoming more sustainable, while 76% said there were ‘bottom line risks’ from the direct impacts of climate change.

However, the broad consensus that the changing environment would impact profits – whether positive or negative – was not reflected in the actions of individual companies.

“Many businesses simply do not accept that they need to change,” said the Carbon Trust report. “99% considered themselves to be at least average, and half saw themselves as environmental leaders in their sector.”

These were some of the reasons for not changing business models:

'No clear vision' 

The Carbon Trust stated that businesses are essentially living in two realities. “They recognise and accept the risks and opportunities of an environmentally sustainable future, but continue to focus on the short-term," it said. 

“Despite the perception that drivers for change will continue to become stronger in the near future, most businesses appear to have no clear vision on how to manage the transition effectively.”

Sir Mark Moody-Stuart, the chairman of the foundation for the UN Global Compact who has also previously served as chairman of Shell and Anglo American, and on the boards of companies including HSBC and Accenture, urged high-ranking executives to move quickly on adaptation and mitigation.

He said: “The report highlights the dichotomy of the two realities acknowledged by most companies.

"This gap in perceived realities has closed only modestly over the last twenty years. Closing it at the required speed will regard unprecedented alignment and combined action by business, investors, governments and consumers. No one group can achieve progress without the support of the others.”

Read the full Carbon Trust report here.

Brad Allen


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