Half (48 per cent) of all UK businesses have reported being impacted by the effects of climate change according to new research by global risk management and insurance broker, Gallagher.

The study of more than 1,500 UK business decision-makers reveals that climate change is already a challenge for British businesses, with nearly three quarters of business leaders concerned about the impact over the next 10 years.

Two thirds of those surveyed said a rise in global temperatures of 2C would have a “significant” impact on their business.

The most common effect of climate change on British business are disruption from extreme weather events, including flooding, storms and heatwaves, followed by climate change related increased operating costs, supply chain issues, and physical damage. The research by Gallagher found that 15 per cent of businesses have already moved premises due to climate change, while 16% per cent have been forced to change their business model.

The sectors facing the greatest pressures from climate change include hospitality and tourism (57 per cent), banking and finance (53per cent) and retailers/FMCG firms (50 per cent), demonstrating a significant threat to the UK’s service-based economy.

Despite the concern among businesses, with climate change ranked behind only the cost of living and the energy crisis as a priority issue, more than half of all business leaders have not taken steps to mitigate against the risks, with a third failing to include climate change on their risk registers.

A third of British companies have taken some steps towards mitigating the impact of climate change, with three in ten having spent between £100,000 and £500,000, and one tenth having spent over a £1m.

Of those businesses planning to protect themselves against climate change, the most common strategies are committing to reduce carbon emissions, reviewing their insurance policies, setting a net-zero target and investing in environmentally friendly technologies. The most popular methods already employed by business decision makers are reducing paper use, using automatic lighting, sourcing renewable energy and deploying LED lighting.

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