The UN has called on business to take the lead in spurring the adoption of environmentally friendly practices to reach internationally agreed climate targets.
The Global Environmental Outlook GEO-5 for Business report produced by the UN Environment Programme (UNEP) warns that the viability of individual companies and sectors could hinge on their ability to cope with flooding, droughts and damaged crops.
It assessed environmental trends in ten business sectors including construction, chemicals, healthcare and communications.
“Those who succeed may find that they not only can use the trends to their advantage, but can generate real and ever more transformative solutions to challenges already arising from a rapidly changing environment in a rapidly changing world,” said UNEP chief Achim Steiner.
UNEP warn that without swift measures to curb emissions, limit biodiversity impacts and boost climate resilience, many sectors could face serious challenges in the coming decades.
It says the the financial sector industry is likely to suffer the worst consequences of climate change as insurers experience severe capital losses and reduced profitability. Property and casualty insurers will likely see increasing claims due to severe weather.
But it says companies that limit their negative impact on the environment cut operations costs and enhance their reputation.
It also observes that the capital needed to address climate change will result in a greatly-expanded market for financing, while the construction industry is advised to take advantage of an increased demand for coastal and flood defences.
With demand for electricity set to increase rapidly, research and development into renewable energy needs greater investment in order to stabilise electricity grids in developing nations. It can then be in place to take advantage of the lessening demand for coal that is expected to fall from two-fifths to one third by 2035.
The report also identifies the food and beverage and healthcare industries as especially vulnerable to environmental change.
Growing zones for crops may have to shift, or certain crops, including those with medicinal value, may be lost, although markets for organic food and beverages expanded on average by 10 to 20% per year during parts of the last decade.
“GEO-5 for Business is in many ways a prospectus for the 21st century company-one that internalizes how rapid and accelerating environmental change will shape risks, but also the need and demand for new sustainable products and market opportunities,” added Steiner.
“The report speaks to the reality of climate change and natural resource scarcities and outlines how more creative decisions by the private sector with longer term horizons may assist in meeting these challenges.
“It makes the case that whether it be in water saving, or climate-proofing infrastructure, the world is going to look for solutions that in turn will drive corporate competitiveness, reputational risk and a transition to an inclusive green economy.”