Only one in five companies and organizations is prepared for climate-related disruptions, according to a new report from the Association of Chartered Certified Accountants just ahead of this COP29 climate summit. The report Weathering the Storm: Building Resilience Against Climate Disruptions reveals frightening gaps in readiness at the organizational level and calls for urgent measures to adapt to the climate.
Observes ACCA: increasingly so the business continuity plans, unupdated for the purposes of exposure to disruption caused by climate change, are leaving organisations open to its increasing frequency. Many businesses also don’t prepare enough and put in practice for such events, with only 17% of organisations having rehearsed their responses to major disruptions. The worst is 25% of respondents who reported never having any resilience mechanisms. Md. ACCA’s Director in India, Sajid Khan said the need for such a focus was highlighted and amplified, pointing to the latest floods in Assam, Tamil Nadu and Bengaluru, as examples of how climate change impacts are already changing lives and communities. “It is time to focus on climate adaptation in the interest of business survival itself, but possibly more critical, for people and places most vulnerable to such risks.”.
Despite such obvious need, resilience is still a low priority for most organizations: two thirds of survey respondents said investment in adaptation to physical risks from climate change is inadequate. Only 37 per cent of businesses plan to increase spending on climate risk mitigation. This lack of preparedness to invest appropriately in resilience points to a worrying gap between awareness and action, which ACCA says now needs to be tackled with all urgency.
According to Emmeline Skelton, Head of Sustainability at ACCA, as a report author, digital-first organizations cannot ignore the climate risks for the remote workers. As the volatility is increasing over time in the climate, it may then bring in power backup and health monitoring as critical stratagems for maintaining productivity and well-being despite climate-related disruptions.
The report draws views from over 600 finance professionals worldwide through ACCA’s Global Economic Conditions Survey and presents a view by region on the concerns of climate. The most worrying factor in Africa was a power outage that affected 54% respondents, while in North America respondents reported that the most trouble activities related to weather included supply chains and employees’ health. This transformation can’t be steered without CFOs and finance teams holding the reins to solve significant tasks related to risk-based planning, openness over emissions, and sustainability strategies through business models. ACCA holds the view that these initiatives will make contributions not only towards organisational resilience but toward a fair, inclusive, and climate-resilient future.
This report is presented as part of the ACCA’s continuous sustainability research for the COP29 summit, encouraging finance professionals to lead efforts in climate adaptation. It includes toolkits with resources to be used by finance teams to enhance resilience skills: scenario testing, crisis management, and business continuity planning.