Climate change effects your business should prepare for
There are a number of reasons why you should adapt your business to climate change. Climate change may have both positive and negative impacts on your business. How your business will be affected depends on many factors including:
- your location
- your business' activities
- the ability of your premises to withstand extreme weather events
- your customer base
- the length, location and diversity of your supply chain
Extreme weather disruption
Climate change is likely to bring more extreme weather that may result in an increase in damage and disruption caused by flooding, strong winds or higher temperatures. Damage from more extreme weather, such as hailstorms, may also become more common. If Northern Ireland experiences exceptionally hot summers, this may result in seasonal water shortages and increased energy costs for cooling.
Your business should have a flood plan, especially if it is in an area already identified as being at risk of flooding. Your flood plan ought to include what action should be taken in the event of a flood and set out measures to minimise the risk of damage if a flood should occur, such as storing stock above floor level.
if your business depends on water you should think about what you would do if there were water restrictions. This could mean changing some of your business processes so they are less water-intensive, or implementing a water recycling or rain collection system.
Staff and supplier disruption
You could also take measures to improve the comfort of your workforce, such as providing clothing for inclement weather, blinds, natural ventilation or insulation. Some of these measures will also contribute to improving energy efficiency.
Even if your business is not directly affected by the impacts of climate change, it is possible that your suppliers or customer base may be affected. If this happens, it will have implications for your business.
You may be able to extend your business interruption insurance to cover you in the event that one of your suppliers is affected by a storm or drought. Think about ways to improve the efficiency and resilience of your supply chain.
Climate change risk insurance
Although you may be able to insure against some of the risks from climate change, you're unlikely to be able to get cover against the indirect economic risks such as the impact on staff.
You may find it cheaper and more effective to change your business strategy in order to reduce and manage the risks in the first place.
For those elements of climate change risk which are insurable, it's important that you choose the right insurance to protect against business risk.