London’s economy at risk from extreme world weather

23 July 2015

London’s businesses are ill-prepared for climate change risks - 54 per cent of FTSE 100 firms have no business adaptation strategy in place for climate change.[2]

Evidence suggests that 60 per cent of small and medium sized businesses have no plan in place to deal with extreme weather conditions.[3]

London’s investment dependence on fossil fuels is a growing risk. It’s time for responsible financial investment away from coal.

The capital’s status as a global city makes its economy increasingly vulnerable to climate change – we not only face extreme weather like flooding, drought, heatwaves at home, but we also ‘import’ risks through the insurance sector, overseas investments and our international supply chains.

The London Assembly Economy Committee report ‘Weathering the Storm’, looks into the impact of climate change on London’s economy in terms of risks and opportunities. Jenny Jones AM, the report author and former Chair of the Economy Committee, said: “Too little is being done to understand and prepare for the potential costs of climate change. London faces a great unknown when it comes to how our supply chains and economy will be hit by extreme weather events. For example, the damage from the 2011 floods in Thailand, where IT component parts are made, meant much higher prices across the global IT industry, including in London.[4] A much worse situation would be if too many harvests failed and affected our food supply. Detailed work is absolutely essential to secure London’s future economic prosperity. We need to diversify London’s economy and further invest in our green economy. That way, our city will be stronger and more resilient whatever the level of future global warming.” The report makes a number of recommendations, including:

Little work has been done to establish the full impact of extreme weather events on London’s supply chains. The London Climate Change Partnership should map the major supply chain vulnerabilities of London’s economy.

The Mayor should drive forward a resilient low carbon economy for London by promoting skills in this area and encourage innovation in the green economy.

Climate change adaptation should be integrated into the Mayor’s Economic Development Strategy, as currently it doesn’t feature.

Notes for Editors:

Read ‘Weathering the Storm: The Impact of Climate Change on London’s Economy’ (below).

Carbon Disclosure Project, Insights into Climate Change Adaptation by UK Companies, 2012.

Federation of Small Businesses, Severe Weather Survey, 2014.

Thailand is the centre of global hard-drive manufacturing and the 2011 floods caused a global hard-drive shortage which lasted into 2012.

Jenny Jones AM, report author and former Chair of the Economy Committee is available for interview. See contact details below.

London Assembly Economy Committee.

As well as investigating issues that matter to Londoners, the London Assembly acts as a check and a balance on the Mayor.

For media enquiries, please contact Lisa Lam on 020 7983 4067. For out of hours media enquiries, call 020 7983 4000 and ask for the London Assembly duty press officer. Non-media enquiries should be directed to the Public Liaison Unit on 020 7983 4100.