Businesses must perform climate risk assessments and disclose their exposure.
That’s according to a new report from the European Bank for Reconstruction and Development (EBRD) and the Global Centre of Excellence on Climate Adaptation (GCECA), which makes a series of recommendations regarding the dangers and opportunities presented by global warming.
It says firms should work out how they could be affected by hazards such as floods, water stress, extreme heat, storms and rising sea levels and publish this information in their regular reports.
The report also calls for businesses to investigate potential benefits from investing in resilience and look into providing new products and services in response to market shifts.
It recommends global companies should increasingly study different scenarios to figure out how best to incorporate long-term climate uncertainties into their business planning and strategic decisions.
The report said: “Efforts to formalise and standardise the assessment and disclosure of physical climate risks and opportunities are still in their infancy.
“As science and business continue to progress in their understanding of climate impacts, the recommendations made in this report will evolve over time, informed by emerging practices and the continuous efforts of corporations, financial institutions, credit rating agencies, industry groups, think-tanks, regulators and governments.”