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Sectors Most at Risk from Climate Change

by Richard Matthews
April 30, 2014
in Other
0

Whether we are talking about impacts on manufacturing facilities from extreme weather events or supply chain disruptions due to resource scarcity, climate change poses a risk to businesses all around the world. If we continue with business as usual it is safe to assume that operating costs will go up across the board as the world warms. While all sectors have some degree of exposure, certain sectors are more vulnerable than others. Here is a summary of some of the sectors with the greatest exposure derived from a report titled, Physical Risks from Climate Change.

The agriculture, food, beverage and apparel sectors are vulnerable to drought and other forms of extreme weather. While the electric sector is susceptible to heat waves which can radically increase power demand. The mining sector is at risk because it is very water and energy intensive. Anything that impacts access to water or energy supply can interupt mining operations.

One of the sectors that entertains the greatest risk is the industry most responsible for climate change. The oil and gas sector is prone to extreme weather events because drilling operations are often located in places like deep water. Historically, the petrochemical industry has also been vulnerable to flooding.

While tourism is significantly reduced by extreme or anomalous weather, the industry most at risk from global warming is the insurance sector as it will incur the greatest costs from climate change.The insurance industry must pay for a wide range of global warming related events from violent storms to flooding. We have already seen evidence of this as evidenced by the trend towards increased insurance costs in recent years.

© 2014, Richard Matthews. All rights reserved.

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