You Are More Vulnerable To Climate Change Than You Think

Gus Schellekens, MENA climate change and sustainability services leader at EY, explains how climate change could affect your business now and in the future

 

DO YOU KNOW how much money your business has already lost due to climate change? For most businesses in the Middle East and North Africa, the answer is no.

Smart businesses know that increasing temperatures, extreme weather and rising sea levels are already affecting everything from their energy and water costs to office architecture, supply chain risk, insurance premiums, and staff safety.

Yet too few businesses in the Gulf are thinking so strategically about climate change. Whether this is due to cost aversion, ignorance or complacency, it is a myopia that risks not just profits but potentially their existence. From increasing water bills to the threat of shock events like the flash floods recently hitting Oman and the rising sea levels that threaten expensive coastal infrastructure, the Gulf is already at a climatic extreme. The only question now is when and how much?

Many regional players have offices and people in overseas climate-stressed areas, such as SABIC, a global leader in diversified chemicals, whose presence includes drought-ridden Cape Town, and Bengaluru. Gulf investors have also put capital to work across Africa, whose agricultural sector may bear the brunt of future climate change impacts. Consumer-facing investments could also be undermined by the economywide deterioration that would follow an agricultural crisis. For some industries, Africa's growth is already down from its earlier highs. It is not clear whether Gulf companies are really screening for and measuring the risks and costs of these overseas threats.