A recent EY study found that only 41% of businesses have transition plans to address climate change risks, with over a third lacking any commitment to mitigating these impacts. The adoption rates are especially low among major emitters, underlining a troubling trend in preparedness. The data emphasizes the role of regulation and strategic investment in addressing climate challenges.
A recent analysis by the EY 2024 Global Climate Action Barometer has revealed that a significant majority of businesses are inadequately prepared for climate change risks. Only 41% of the over 1,400 surveyed companies across 51 countries possess transition plans aimed at mitigating these risks. Alarmingly, 38% of respondents indicated they have no intentions of developing such plans. Among the largest polluters, the adoption of these strategies is even more concerning, with only 8% in China and 32% in the United States implementing mitigation efforts, compared to 66% in the United Kingdom and 59% in Europe. The study emphasizes the critical role of regulatory frameworks in prompting action. Additionally, financial commitments to support these transition plans remain low, with merely 4% reporting operational expenditures and 17% capital expenditures dedicated to their implementation. Dr. Matthew Bell of EY stressed the importance of viewing climate change as a strategic opportunity and called for a comprehensive approach involving various organizational leaders to facilitate a successful transition.
Climate change poses a significant threat to businesses worldwide, and many are beginning to recognize the necessity of strategic planning to combat its impacts. However, recent research illustrates that a considerable number of companies are lagging in their preparedness, which may result in severe economic and operational repercussions in the future. The importance of creating transition plans cannot be overstated, particularly in light of evolving regulatory requirements and market opportunities that prioritize sustainability and resilience against climate-related adversities.
The findings of the EY 2024 Global Climate Action Barometer underscore a concerning trend among businesses regarding their lack of preparedness for climate change risks. With only 41% having transition plans and less than 25% disclosing financial support, it is imperative for organizations to address these gaps. As highlighted by Dr. Bell, recognizing climate change as a strategic opportunity and fostering collaboration among leadership can drive meaningful change and contribute to a more resilient future.
Original Source: www.forbes.com
