KPMG claims six industry sectors should be on alert over climate change risks - Financial sector is one of them

Warning also given that all sectors under-estimate the full extent of climate change risk.

Six major industry sectors are in particular danger from climate change risks, claims professional services organisation KPMG today.

Aviation, healthcare, tourism, transport, oil and gas and the financial services sector all feature in the “danger zone” in a report on climate change risks from KPMG[1][1] – meaning that they score highly on the risks which face them yet score poorly in terms of their preparedness to face these risks.

In addition, KPMG claims that the 18 sectors included in the report – even the three deemed to be in the “safe area” – are not sufficiently prepared to deal with the new risks associated with climate change.

The climate change risks that companies should be paying more attention to are physical, regulatory and reputational risks as well as the emerging risk of litigation; yet the scope and potential impact of these risks appears to be under-estimated across all sectors.

Commenting on the findings of the report, Chi Woo Mun, Associate Director and Head of Climate Change for KPMG, said: “This report examined business sectors right across the global economy and it found that there are huge differences between sectors in terms of the relation between climate change risks and risk preparedness. Industries may be relatively safe, they may be in the danger zone, or they may be in between - but wherever they are, risks tend to be underestimated.”

The report, entitled “Climate Changes Your Business” is some of the most comprehensive analysis of its kind to date. Its findings are based on a review of 50 authoritative published studies addressing the business risks and economic impacts of climate change at sector level. The published reports have been analysed and a ‘risk score’ for each sector has been assessed. At the same time, the business sectors have been rated according to their preparedness for climate change impacts. Preparedness was measured using data compiled in the latest completed round of the independent Carbon Disclosure Project.

The report grouped sectors into three areas, dependent on the risks they face and their preparedness (see below). Due to the way the figures were compiled, these rankings effectively represent what financial institutions and businesses themselves think about climate change risks.

(Click on image to enlarge)