Survey: International Businesses Want Climate Change Regulation

Businesses around the world are urging policy makers to take a more coordinated approach to climate change and introduce regulations to help them adapt, according to global research released Nov. 27 by law firm Clifford Chance LLP.

The report, "Climate Change: a business response to a global issue," examines climate change from the perspective of a selected cross-section of businesses, including how they have adapted their outlook and strategies and what they want from government. Among its findings:

  • Globally, four out of every five (81 percent) company respondents expressed the view that more regulation is needed to drive business' response to climate change.
  • U.S. companies were less enthusiastic compared to other companies elsewhere in the world; 69 percent considered more regulation necessary; this compares to 77 percent in the UK, 86 percent in Europe and 100 percent in Asia-Pacific.
  • But 95 percent of respondents in the U.S. believe climate change regulation will have more impact on their businesses over the next few years, ranking marginally under expectations in Europe (96 percent), but above the UK (87 percent) and Asia-Pacific (81 percent).

"The US results reflect growing business sentiment favoring climate measures that control emissions, spur development of climate-friendly technologies and solutions, and provide greater regulatory certainty," said William Thomas, head of Clifford Chance's Americas Environment practice, based in Washington, DC.

"Climate change is increasingly high on the agenda of U.S. policy makers at both the federal and state level. This reality, coupled with recent Supreme Court jurisprudence concerning regulation of greenhouse gas emissions, makes it more likely that a national regime will emerge sooner rather than later, and has prompted several key players to pursue preferred legislative solutions," he added.

Other key findings:

  • The majority of respondents say they are taking steps that go beyond current requirements.
  • Respondents are optimistic about climate change business opportunities, particularly in the long-term. US respondents are most enthusiastic with more than three quarters of companies predicting strong long-term future prospects, and nearly 40 percent seeing possible gains relatively soon.
  • The research also reveals that climate change could have a significant impact on global M&A activity. Globally, nearly a quarter of respondents say climate change is a reason for considering the acquisition of a business, while only 7 percent of respondents have considered disposing of a business due to the impact of climate change and these are based in the U.S. and the UK.

"This report illustrates how major businesses are responding to the challenge of one of the key issues being discussed by governments around the world," said Stuart Popham, a senior partner at Clifford Chance. "The business climate is changing too, and the results highlight some of the fundamental issues facing businesses in the coming years. One of the real turning points will be what happens in Bali at the United Nations Climate Change meeting."

The survey also highlights the importance of reputation as a key driver for businesses to tackle climate change issues, ahead of even pressure from customers, which is currently limited.

"It is striking from the survey just how positively businesses across all the regions view the opportunities flowing from climate change," said Thomas. "Their success in realizing such aspirations will turn in no small measure on their ability to execute strategies that maximize carbon competitiveness and run with the grain of emerging climate regulation."

The report was based on research and surveys conducted by Gracechurch Consulting that consisted of 93 telephone interviews with senior-level personnel at multinational and major companies in the U.S., UK, continental Europe and Asia; 11 detailed interviews with boardroom-level executives at major U.S. and UK companies; and interviews with partners at Clifford Chance.

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