Business impacts of a changing climate

Extreme weather events can cause disruption leading to loss of business continuity. They can also affect working conditions and staff comfort, resulting in health and safety concerns and loss of productivity. The performance of some industrial and agricultural processes is dependent on climate or weather as are consumer tastes and requirements.

The business case for adaptation can be made in terms of:

• Avoiding unexpected costs and increasing revenue: for example as a result of disruption caused by extreme weather events, changes in productivity, lost or gained sales, changes to input prices. More information can be found under Impacts of weather & climate.

• Making the most of strategic opportunities: for example, through new market opportunities, process capabilities or first mover advantage. Further details below.

Strategic implications

As well as directly affecting profits, the impacts of climate change may have some strategic implications for SMEs:

• Opportunities to grow or diversify arising from new markets or ways of marketing e.g. shift from winter to summer oriented products or products and services that help others deal with the adverse effects of climate change.

• New locations e.g. northwards or away from urban centres.

• Recruitment issues arising from migration or new skills requirements of the new climate.

• Competitive advantage by being the first mover on a threat e.g. maintaining business continuity or anticipating regulatory or contractual requirements.