Environment is a ‘top 10’ risk to business

www.environmental-finance.com/onlinews
London, 27 March

An increasing concern about the environment has been ranked in the top 10 strategic risks to business in a recent report from consultancy Ernst & Young. The firm used the term 'radical greening' to describe the increasing environmental challenges that could result from stricter regulations, changes in consumer attitudes and extreme weather events.

"In the short term, barring unexpected developments, the strategic challenge centres on how much 'radical greening' companies should undertake. Going green is expensive, but could pay dividends if consumer tastes and regulation shift quickly," the report said. New green laws could, for example, make non-green real estate assets obsolete, while caps on greenhouse gas emissions present a major threat to utilities.

The report warns: "The pace and extent of this new 'green revolution' is hard to predict – but what is almost certain is that some firms will get the right fuel mix, real estate portfolio, or carbon footprint, while others will go either too radically green or, more likely, not green enough." Other risks identified by Ernst & Young include: regulatory and compliance risk; global financial shocks; aging consumers and workforce; emerging markets; energy shocks; and cost inflation.