Climate change seen as biggest business risk

Major UK companies are optimistic about future economic prospects, both domestically and globally, but consider climate change as the biggest risk to future business conditions, according to a new survey.

David Sapsted

10 November 2021

The survey, the FTSE 350 Boardroom Bellwether report, found that 96% of businesses anticipated a pick-up in the global economy in the post-pandemic era, with 76% optimistic of conditions in the UK.But the survey, conducted by the Chartered Governance Institute UK & Ireland in conjunction with the Financial Times, also found that 28% of companies considered climate change the biggest single risk to their businesses.

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Business 'critical role to play'

This put the climate risk factor ahead of those who regarded cyber threats (23%), risks linked to the pandemic (17%), global economic problems (14%) and geo-political tension (11%) as the major threat.Peter Swabey, Policy and Research Director at the institute, said: “In the second week of COP26, with organisations increasingly committing to combatting climate change, there is no doubt the business sector has a critical role to play."It is encouraging to see the ambition to achieve net zero in our largest corporate boardrooms. If this is to be kept on track, however, it is essential that boards provide appropriate transparency."This is where good governance has an essential role to play in ensuring companies are delivering on their ambitions and can be held to account.”

Plans to tackle climate change

The report said that 96% of the nation's largest companies had discussed climate change at least once in the past year, and that most had addressed the issue several times. At the time of the survey, 69% of respondents had published plans to tackle climate change - 62% of which were FTSE 100 companies - while more than half had published plans to achieve net zero.

Pandemic boost to productivity

Looking at other areas of business development, the survey found that almost a third of respondents reported that productivity had increased during the pandemic.The institute said that this was "largely due to travel time being given over to work, increased focus working from home, better use of technology and the benefits of flexible working". Some 86% of companies said they were planning changes to office-based working as a result of the pandemic.However, the report added that more than half of businesses believed productivity had remained unchanged since the arrival of Covid-19 and that a tenth felt it had decreased as a result of lower demand.As far as future workforce numbers were concerned, almost a quarter of companies said they planned to increase recruitment over the coming year while 59% said they had no immediate plans to do so.