Adapting to the impacts of climate change and moving away from fossil fuels could increase the cost of doing business or lead to stranded assets, underlines analysis by the European Investment Bank (EIB). However, most EU and US firms are “unaware of the challenges ahead,” states the report.
Over half of companies on both sides of the Atlantic believe the transition to a greener, more sustainable economy will have no impact on their supply chains, demand or reputation.
Transition risks can be hard to identify due to uncertainty about future policies and regulations, and the long-term nature of their impacts, the report states. Indeed, 43% of firms surveyed cited uncertainty about regulation as the biggest obstacle to making climate-related investments.
Nonetheless, companies must not adopt a wait-and-see attitude, insists the EIB in its report, calling on the US and EU governments to implement policies that incentivise corporate spending on climate action.