Companies Understand Climate Risk, But Regulatory Uncertainty Is Stifling Action

Climate Forests Investments Jan 21, 2014

Most companies around the world understand that climate change poses a serious risk to their operations, but they say a lack of regulatory direction is preventing them from taking action. Meanwhile, few of them really know how much deforestation they have in their supply chains, according to the Climate Disclosure Project.

21 January 2013 | All around the world, companies are growing leery of climate change, with 72% of those surveyed in the Carbon Disclosure Project’s (CDP) Supply Chain Report 2013–14 identifying climate change as a serious risk. Tellingly, 90% of those who identified climate change as a risk said that regulatory uncertainty was compounding the problem. E.I. du Pont de Nemours and Company says that “as it makes long term capital and R&D investment decisions, the uncertainty surrounding new regulations adds complexity to those business decisions.”

Interestingly, 56% of the 2,868 companies that answered the survey said that climate change also represents an opportunity as consumers become more receptive to low-carbon products and services.

At the same time, 38% of suppliers reported no documented processes for assessing and managing climate-related risks – echoing CDP findings published in November showing that most businesses don’t yet understand the risk that deforestation presents to their supply chain.

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