London’s supply chain is not adequately prepared for the impact of extreme weather around the world, according to a report.
A study by the London Assembly Economy Committee looked into the impact of climate change on the UK capital's economy in terms of risks and opportunities.
It concluded the capital’s status as a global city has made its economy increasingly vulnerable to climate change, and has called for work to identify where London’s supply chain is vulnerable.
Extreme weather like flooding, drought and heatwaves could impact London, while 'import' risks through the insurance sector, overseas investments and international supply chains, were also increasing.
It said water scarcity, extreme flooding, land loss and heatwaves are expected to become increasingly commonplace in the critical food-producing and industrialising regions which provide the basis for many of London’s supply chains.
Entitled Weathering the Storm, it said that 54 per cent of FTSE 100 firms have no business adaptation strategy in place for climate change and that evidence suggested 60 per cent of small and medium sized businesses have no plan to deal with extreme weather conditions.
The report recommended the London Climate Change Partnership should map the major supply chain vulnerabilities of the city's economy and said the mayor should encourage a low carbon economy in the capital by promoting skills and encouraging innovation in the green economy. It also calls for climate change adaptation to be integrated into the Mayor’s Economic Development Strategy.
Jenny Jones AM, report author and former chair of the Economy Committee, said too little was 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,” she said. “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. A much worse situation would be if too many harvests failed and affected our food supply.”
Jones said detailed work was 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," she added.