London's economy facing 'great unknown' on climate risks, warns Assembly
Businesses in London are unprepared for the impacts of global warming and more than half of FTSE 100 companies have no strategy to deal with climate change.
According to the London Assembly Economy Committee’s 'Weathering the Storm' report released today (23 July), London’s economy is at severe risk from potential extreme weather and supply chain disruption.
The report found 54% of FTSE 100 companies were found to have no adaption strategy for climate change and around 60% of London’s small and medium sized businesses have no plans to cope with extreme weather conditions.
The London Assembly report suggests the capital's status as a global city makes its economy as a whole vulnerable to climate change, with major risks to the insurance sector and overseas investments threatened by global warming.
“Too little is being done to understand and prepare for the potential costs of climate change,” said Jenny Jones, chair of the Economy Committee. “London faces a great unknown when it comes to how our supply chains and economy will be hit by extreme weather events.
“For example, the damage from the 2011 floods in Thailand, where IT component parts are made, meant much higher prices across the global IT industry, including London. A much worse situation would be if too many harvests failed and affected our food supply.”
The report claims that continued investment from London businesses in fossil fuel industries presented a growing problem and called for responsible divestment away from fuels such as coal. It urges the Mayor to commit to the principle of transitioning away from fossil fuels.
The report calls for new measures to ensure London’s survival in an uncertain global climate. The London Assembly recommends a full impact assessment of London’s supply chain vulnerabilities and that the Mayor should push for a more resilient low-carbon economy and encourage new innovation and skills for the green economy.
It also called for climate change adaption to be integrated as part of the Mayor’s future Economic Development Strategy. Jenny Jones added: “Detailed work is absolutely essential to secure London’s future economic prosperity. We need to diversify London’s economy and further invest in our green economy. That way, our city will be stronger and more resilient whatever the level of future global warming.”
Friends of the Earth London campaigner Jenny Bates said climate change was a physical risk in the form of floods, drought and heat waves and an economic risk.
“Tackling climate change should be a top priority for the Mayor,” said Bates. “London must prepare for the consequences of global warming and do far more to play its part in cutting emissions through, for example, the development of clean energy and transport infrastructure.”
Bates said preventative measures, such as halting potential airport expansion, could help tackle climate change and air pollution, which is thought to kill around 9,500 Londoners each year. She added: “The City's financial sector cannot ignore the huge risks posed by climate change - and it has a crucial role to play in helping to drive the world towards the low-carbon future that's so urgently required."
New York’s example
The report follows comments by the Mayor of New York Bill de Blaiso on Tuesday, who committed the city to cutting greenhouse gas emissions by 40% by 2030. Speaking during a visit of world Mayors to the Vatican, De Blaiso said: “How can we protect our people, if we accept a status quo that is slowly killing our earth?”
The Mayor added: “In my city, it has become painfully obvious that we have to set difficult goals for ourselves. The extent of the climate crisis demands it. Any city, any nation, any corporation not straining to reduce emissions simply isn't doing enough. The facts of this crisis make that self-evident.”