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British International Investment has released its third annual Emerging Economies Climate Report, highlighting the acute challenges faced by businesses in the world’s most climate-vulnerable regions. According to the report, nearly 80% of companies in Africa, Asia, and the Caribbean are already experiencing the adverse effects of climate change.
The findings were announced during an event organised with the Grantham Research Institute on Climate Change and the Environment and ODI, a global think tank. The report indicates a notable increase in the impact of climate change on businesses, with 79% of surveyed companies reporting effects on their operations, a significant rise from 68% in the previous year.
Additionally, the research found that 72% of the businesses had faced extreme weather conditions in the past five years, with droughts, floods, and heatwaves posing the most substantial threats. The report also revealed growing concerns among businesses about physical climate risks and the challenges of transitioning to a low-carbon economy.
A significant majority of respondents acknowledged the importance of climate action for long-term business success, with 97% agreeing that proactive measures to reduce carbon emissions and enhance resilience to climate risks would contribute to greater prosperity.
The survey highlighted sector-specific variations, with financial services and fund managers reporting fewer climate-related challenges compared to corporates, especially in the agricultural sector, which are confronting more severe impacts.
Despite recognising the potential cost savings and value addition of climate action, many businesses expressed a lack of knowledge and resources to effectively respond to climate challenges. They emphasised the need for more technical training and targeted investments to address the climate crisis effectively.
Amal-Lee Amin, Managing Director and Head of Climate, Diversity and Advisory at BII, emphasised the critical role of businesses in emerging markets in combating climate change, stating, “Businesses and entrepreneurs in our markets are directly confronting the impacts of the climate crisis. It is imperative for BII and similar institutions to provide these enterprises with the necessary capital and expertise to contribute effectively to the climate fight and ensure their enduring success.”
Nick Robins from the Grantham Institute echoed the sentiment, highlighting the urgent need for targeted investment to empower firms in emerging economies to tackle the climate emergency, underscoring the strategic importance of scaling capital flows to support a just transition that promotes quality employment and gender equality.
Read the full report here.
