found that corporate social investment initiatives related to the environment were supported by only 17% of SA companies, with an average of 4% of total CSI spend allocated to these initiatives in 2021. While greenhouse gas emissions are now widely acknowledged, most companies do not understand their dependencies on ecosystems or how they affect biodiversity in turn.
As highlighted by President Cyril Ramaphosa in his recent state of the nation address, at COP26 SA signed a historic R131bn just-transition financing package to assist in the shift from our coal-based energy system to a more renewable energy-based system. This will undoubtedly have an effect on business and it is therefore critical that companies understand their climate-risk factors, as well as opportunities arising from climate change.
Another type of climate-change risk is physical risk. This includes the increased likelihood of extreme weather events such as floods, droughts and wildfires. Physical risks can result in interruptions in day-to-day business activity as well as a detrimental effect on supply chains, market position and the business’s overall value.
Instead of simply reacting to the uncertainty of climate-change effects, companies that go beyond the response and are proactive about using their advantage to track new risks affecting their industry, shaping the correct strategic response and strengthening their agility and resilience, stand the chance of building an uncertainty advantage.
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