Climate change is raising the level of international country risks but offers a golden opportunity for businesses to make a positive step change, according to a report from trade credit insurer Atradius.
In an economic research report on climate change, Atradius warns about the negative impact climate change will have on worldwide economies and public finances, and reveals how financial and economic consequences generated by climate change will raise country risks worldwide, thereby impacting export patterns and international trade.
However, Atradius also highlights that climate change brings growth opportunities for international companies to develop new technologies and build infrastructure while making a positive contribution to the adaption initiatives of affected countries.
The report, Climate change: raising country risk but offering business opportunities, analyses the impact of climate change and reveals which countries are likely to be most affected by changing rainfall patterns, higher temperatures, drought, rising sea levels and increasing natural disasters.
As well as assessing which countries are most vulnerable to climate change, the Atradius report also determines how prepared they are for the potential impact ahead.
Heat, drought and changing rainfall patterns are a major threat to agriculture-intensive Africa while sea level rises and increasing natural disasters in coastal areas create problems in Asia, the Pacific and the Caribbean.
The report demonstrates that though some countries are lagging in readiness, many of them – often helped by multilateral or bilateral partners – are taking measures for both the short and long term, thereby creating new business opportunities. For instance, businesses active in the development of new technologies for the construction of irrigation and desalination plants have a large playing field in Africa.
Meanwhile, the great untapped potential in Africa, the Middle East and South America offers opportunities in renewable energy as these markets lack the required technical knowledge and skills for development.
On a much larger scale are the opportunities created for construction and maritime companies active in the construction of offshore wind farms, while countries affected by sea level rises and natural disasters in Asia and the Caribbean need expertise when it comes to coastal defence and water management in areas such as in dredging, land reclamation and improvements in infrastructure.
Bert Burger, principal economist at Atradius, commented: “Global warming is a major threat to humanity, requiring urgent and effective action. As was all too evident with Covid-19, climate change similarly has a two-pronged impact; not only causing personal suffering but also great financial and economic damage. Increasing drought, sea levels and natural disasters affect the incomes of individual citizens and businesses while representing high costs for governments.”
“However, climate change also offers new opportunities for growth. Development of new technologies and investments in initiatives such as irrigation, desalination plants and energy transition creates a bright side to climate change. While climate change is first and foremost a threat, international companies can benefit from the opportunities it creates while making a positive contribution to the climate adaption initiatives of these countries, driving economic growth, creating jobs and making a real difference to the planet.”
For more information and to access the full report click here.