Environmental risks to your business

In this guide:

The environment and your business

The environment can pose many risks to your business, but climate change is perhaps the biggest environmental risk. Climate change refers to the build-up of man-made gases in the atmosphere that trap the sun´s heat, causing changes in global weather patterns. It has environmental, economic and social impacts.

Climate change risks for your business may include:

frequent extreme weather - you may have increased insurance costs, more damage to property and resources, and disruption of power and water. Customers may be unable to visit or contact your business, or suppliers may be unable to deliver goods or services.
decreased demand - there may be less demand for your goods and services if they are not environmentally friendly, or competitors with energy-efficient products may target your customers. It may also be difficult to attract and retain staff if your business is not sustainable.
global impacts - overseas suppliers may be unable to deliver goods or services due to climate change events in their country or international customers being encouraged to buy locally.
increased costs - you may experience higher costs for energy, water and other resources. Water restrictions may also affect your business.

Regulation requirements

There may be regulatory reporting requirements for your business and penalties may apply for non-compliance. Find out if your business has reporting obligations under legislation such as:

Clean Energy Act 2008 - Smart Energy Savings Program
National Greenhouse and Energy Reporting Act 2007 - National Greenhouse and Energy Reporting (NGERS)
Energy Efficiency Opportunities Act 2006 - Energy Efficiency Opportunities Program.

You may also be required to obtain licences or permits for the business you operate. Learn more about environmental licences and permits from the Department of Environment and Resource Management (DERM) or find out which ones you need through SmartLicence.

Prepare a risk management plan

Identify the risks that climate change brings to your business and prepare a risk management plan that deals with climate change. Then plan ways to manage these risks. Assess how climate change is already affecting your business and how it could affect it in the future.

Taking steps now to address climate change risks can save your business from financial or other problems, and improve the sustainability of your business.

Find out how to develop a risk management plan to help your business cope with climate change risks.