As the United Nations [UN] global-warming conference is taking place in Indonesia, companies around the globe hope that governments will set up more effective and coordinated climate change regulations, according to a report by Clifford Chance.
Issues on climate change have been discussed more prominently among governments in recent years. Since 2005, the Kyoto protocol and its methods for controlling carbon emissions have indicated just how crucial the issue is to governments, regardless of how some might see the latter as a potential threat for doing business. While climate change remains a concern, it is also a critical matter to most multinational companies. In recent years, many companies have been paying close attention to the possible affects climate change may bring.
With the aims of finding out how corporations are responding to the challenge of climate change, how they have adapted their outlook and strategies, and what they want from government and regulators, the research has come to the finding that companies view the climate change issue as a business opportunity. Moreover, corporations tend to favour long-term business opportunities rather than short term gains. Both Asia-Pacific and the US are most optimistic about long-term opportunities generated by climate issues.
The research, which was conducted globally through more than 100 interviews in the US, UK, Europe, and Asia, indicates four out of every five companies around the world believe more regulations are needed. Sectors of the sample corporations included financial services, real estate, IT and telecoms to aviation, energy and utilities, and heavy industry. While Asia-Pacific has the most enthusiastic attitudes in sustainability, scoring 100% of respondents saying "yes," to the question "whether more regulations on climate change is needed?", US companies are the least keen on this subject, with only 69% wanting more regulation. Both UK and Europe scored 77% and 86% respectively.
"[The] PRC will be the driver in the region, and it usually takes a very long-term view. It is possible that there will be a measured increase in discussing climate change control for business to build a consensus, rather than wide-ranging formal regulation," said Ting Ting Tan, partner and leader of Clifford Chance's Asia Climate Change practice.
Climate change also transformed companies' products, according to the report. Many business sectors no longer view regulation on climate change as a costly barrier but as a driver for innovation. Most companies have considered to develop new products and ideas related to or in response to climate change. Almost 60% of businesses have already planned to work on new products in the face of climate change.
Apart from shaping companies' products, climate change also highly affects companies' investment decisions in all regions. Around the globe, nearly a quarter of respondents said climate change is a reason for considering the acquisition of a business, and the figure in Asia-Pacific is much higher 44%. While Asia-Pacific companies see that climate change will influence their ability in staffing, the research also reveals that climate change could have a significant impact on global mergers and acquisition activities.