Paris: Rising temperatures, storms linked to climate change and growing competition for water and land point to tough times ahead for the business sector, but also a chance for profitable innovation, the UN said today.
Citing the ravages of floods in Australia in 2010-11 which cost insurer Munich Re USD 350 million and mining group Rio Tinto another USD 245 million, the report said companies had no choice but to adapt.
"From extreme weather events, to rising pressures on finite natural resources, changes in the global environment will increasingly impact operating costs, markets for products, the availability of raw materials, and the reputation of businesses, from finance and tourism, to healthcare and transport," said the UN Environment Programme document.
"The future of the private sector will increasingly hinge on the ability of businesses to adapt to the world`s rapidly changing environment and to develop goods and services that can reduce the impacts of climate change, water scarcity, emissions of harmful chemicals, and other environmental concerns."
In the tourism sector, for example, a 1.4-2.2-degree Celsius rise in average winter temperatures would likely mean the closure of more than half the ski resorts operating in the northeastern United States in 30 years.
The report said Earth-warming greenhouse gas emissions were projected to double in the next 50 years, leading to a global average surface temperature increase of 3-6 C by the end of the century.
As for water scarcity, it said platinum mines in South Africa`s Olifants River system faced ten times higher water charges by 2020 as they compete with local communities for the ever scarcer commodity.
Global electricity demand could be over 70 per cent higher in 2035 than 2009, said the report -- and pointed to more frequent heat waves associated with climate change affecting grid reliability.
Last year, blackouts in northern India caused by high temperatures and low rains left hundreds of millions of people without power for several hours.
But while the risks to business were "significant", they also presented unique opportunities for companies that seized the growing demand for greener technology, investments and services, said the report entitled "GEO-5 for Business: Impacts of a Changing Environment on the Corporate Sector."
More than 80 per cent of the capital needed to address climate change may come from the private sector.
"This can bring about significant `green economy` investment opportunities in the finance sector for green buildings, energy-efficiency technology, sustainable transport and other low-carbon products and infrastructure," the UNEP said.