Water stress and climate change must be 'top priority' for businesses
Any businesses that isn't incorporating climate change adaption or water scarcity issues into its business strategy is taking a 'very great risk' in terms of its sustainability and resilience going forward.
Those are the words of Paul Kelly, the vice president for corporate affairs at Asda, who stressed that the impact of climate change and extreme weather must be viewed by businesses as a financial and economic risk.
"Climate change is a very real challenge and I think that any business that doesn't have climate change adaptation written largely within its business strategy is really taking a very great risk in terms of its sustainability and resilience going forward," said Kelly.
"We in the UK have to be much more focussed on how we take on the true economic risks of climate change and not get too bogged down in the details."
Supply chain resilience
Kelly was speaking at an event hosted by the Aldersgate Group in London yesterday (17 July), which looked at the impacts of the recent floods and climate change on UK businesses. He added that the freak weather events in December and January may well become the norm, and businesses must focus on resilience right across the supply chain.
"Inevitably, as a large business, we do plan for extreme weather, but no business is an island. We are part of a complex eco-system of interdependency. If our suppliers, colleagues, customers and communities are not properly prepared then that system is at risk of failure.
"The food industry works on entire principles and it has become quite a complex eco system that can very quickly grind to a halt. As a global business, we have to work to achieve supply chain resilience."
Kelly's comments come a month after Asda collaborated with pwc to develop the Climate Adaptation Framework study, which maps out the risks that climate change poses across Asda's entire trading operations and looks at potential obstacles that lie ahead.
That report revealed that climate change is having a direct impact on 95% of fresh produce stocked in Asda stores, with food sourcing, processing and transportation all facing an growing threat from environmental issues.
But Kelly also pointed out that the focus shouldn't just be on climate change, and that the issue of water scarcity should be a top priority for fellow business leaders.
"Water shortages are more pressing than climate change... The impact of water stress is one of the most important business risks for the agri-food business globally."
The Aldersgate Group event assessed the economic impacts of the UK floods, exploring exactly what needs to be done to manage business risks appropriately.
It came off the back of a progress report from the Committee on Climate Change, which implied that businesses - particularly smaller companies, buildings and infrastructure such as transport networks, hospitals and water supplies - are all ill-prepared for the extreme weather events related to climate change. Read that full report here.