UNEP report: Firms must adapt to changing environment to secure private sector
The future of the private sector will "increasingly hinge" on the ability of businesses to adapt to the world's rapidly changing environment, according to a new report.
Published by the United Nations Environment Programme (UNEP), the report also looks at how the sustainability of the private sector needs businesses to develop goods and services that can reduce the impacts of climate change, water scarcity, emissions of harmful chemicals, and other environmental concerns.
According to the report, extreme weather events, rising pressures on finite natural resources and changes in the global environment will increasingly impact operating costs, markets for products, the availability of raw materials, and the reputation of businesses, from finance and tourism, to healthcare and transport.
In addition to the risks, the report also highlights the opportunities environmental change presents to businesses that successfully manage the impacts and seize the demand for sustainable technologies, investments and services.
The report, GEO-5 for Business: Impacts of a Changing Environment on the Corporate Sector, is based on UNEP's Global Environment Outlook (GEO-5); the UN's "most comprehensive assessment of the state of the global environment".
UN Under Secretary-General and UNEP executive director Achim Steiner said: "GEO-5 for Business is in many ways a prospectus for the 21st century company - one that internalises how rapid and accelerating environmental change will shape risks, but also the need and demand for new sustainable products and market opportunities".
"The report speaks to the reality of climate change and natural resource scarcities and outlines how more creative decisions by the private sector with longer term horizons may assist in meeting these challenges. It makes the case that whether it be in water saving, or climate-proofing infrastructure, the world is going to look for solutions that in turn will drive corporate competitiveness, reputational risk and a transition to an inclusive green economy,' added Steiner.
The report shows that the rising frequency of extreme weather events, often linked to climate change, poses risks to all sectors.
Rising temperatures are challenging the future viability of tourism businesses for example, says the new report.
A study cited in GEO-5 for Business states that fewer than half of the ski resorts operating in the US northeast are likely to remain economically viable in 30 years, if average winter temperatures increase between 2.5° and 4°F.
The UNEP study says that more than 80% of the capital needed to address climate change may come from the private sector.
It also suggests that this can bring about significant 'green economy' investment opportunities in the finance sector for green buildings, energy-efficiency technology, sustainable transport and other low-carbon products and infrastructure.
In cities, around 60% of the infrastructure needed to meet the needs of the world's urban population by 2050 still needs to be built, presenting significant business opportunities for greener urban construction and retrofits. Over 1.5 million square feet of building space are being certified with green standards each day, according to the report.
It also says that water scarcity remains a critical challenge for all sectors profiled in GEO-5 for Business, while companies in the tourism, chemicals and other sectors could face increased operational costs.