Business' perceptions of risks due to heat-related climate change

Businesses’ perceptions of risk due to climate change

The majority of businesses responding to the survey identified some perceived risk due to climate change. However, most businesses responding to the survey perceived these risks to be neither severe nor pressing. Only a small number of businesses surveyed identified great risks from higher working temperatures (4%) or infrastructure disruption (5%).

A minority of businesses do not perceive any risks to their business at all due to climate change (17%).

There are some sectoral differences between perceptions of risk, although no clear pattern emerges. For example, businesses whose workers primarily work outside perceive the greatest risk of reduced worker productivity due to higher temperatures. Office-based businesses also perceive higher-than-average risks of reduced productivity due to higher working temperatures. However, manufacturing businesses perceive below-average risks due to climate change in this area.

Businesses’ approaches to assessing and acting on risk

Although some businesses perceive risks due to climate change, few are taking action to understand and mitigate these risks. Most businesses expressed an intention to adapt to the risks posed by climate change, but most have not yet taken action.  54% number of businesses reported an interest in adopting a climate change adaptation plan but have not yet done so. Only 11% of businesses have implemented or are in the process of implementing a climate change adaptation plan.

Only 32% of businesses surveyed reported assessing climate change risks through a formal risk assessment process. Although 32% of businesses reported carrying out a formal risk assessment, only 11% completed an adaptation plan as a result.

Barriers and drivers for businesses assessing and mitigating risks

The primary barrier to adaptation faced by businesses in Wales is insufficient information. Particularly a lack of information regarding how higher working temperatures and infrastructure disruption will affect specific business sectors in Wales.

Businesses also reported requiring more information about the steps they can take to mitigate risks. This could include how to assess risks, potentially in the context of modelled climate change scenarios. Other barriers included the costs of adaptation and dedicating resource to creating and maintaining a climate change adaptation plan.

Businesses were asked about who they perceive to have the responsibility for ensuring that businesses adapt to a changing climate. The responses indicate a perception that businesses have ultimate responsibility for ensuring they adapt to the effects of climate change. Businesses recognise a role for Welsh Government in supporting adaptation, particularly around solving information deficits.

It was hypothesised that experience of previous disruption due to extreme heat may be a driver of adaptation. Businesses do not report being affected by higher working temperatures and infrastructure disruption in the last five years. There was a potential relationship between perceptions of these issues having affected productivity and businesses assessing risks and introducing adaptation plans. However, there is no evidence that this is a statistically significant relationship.

It appears that individual senior staff are often responsible for driving adaptation within small and medium businesses. Survey responses also suggest that passionate individuals have often been key in driving climate change adaptation efforts forward. For some businesses, there appears to be a link between climate change mitigation and adaptation. Taking action to reduce greenhouse gas emissions has encouraged businesses to actively reduce their risks from the effects of climate change.