Industry & services
The business sector has to deal with climate change, both directly through the influence of the production process (e.g. water shortages) or the impact of the weather (floods, storms, heatwaves, etc.), and indirectly through problems with provisioning and shortages. In particular, cascading effects are expected as a result of climate change on ecosystems and agricultural production, which in turn will influence the price, quantity and quality of products.
However, climate change may not only have negative consequences for the economy. New opportunities could arise: climate change could have an impact on demand for certain products and services (increased demand for products and services that increase resilience and reduced inappropriate products and services).
For industry, one of the specific problems that will probably occur is the effect of temperature increase (i.e. problems to cool energy plants and other industry).
In the insurance sector, climate change could affect the availability of insurance services at an affordable price.
Financial institutions are making progress in estimating the risk of climate change in order to avoid losses.
The search is on within the ‘Nieuw Industrieel Beleid’ (New Industrial Policy) for a new approach or other processes that can bring about a better future for Flemish industry. This includes looking for clever specialisations that would give Flanders a competitive edge within Europe. There is also a focus on making markets more flexible and consequently less vulnerable to change. Climate change is part of this because industries will be positively or negatively influenced by it.
The influence of climate change on determining where to locate industrial estates mainly consists of the risk of flooding and the availability and cost of water for cooling or other processes. The climate response that is shaped within the MilieuEffectRapportage (Environmental Impact Report) will also influence location considerations. At the federal level, a guidance document (FR and NL) has been developed to ensure that strategic environmental assessments take climate adaptation into account. At the Flemish level, adaptation to climate change is taken into account in the decree on environmental impact assessment.
Climate change can also be addressed within factories themselves with new technological developments in the construction/renovation of factory buildings, particularly in relation to heating and cooling. Water consumption is already being reduced through initiatives such as grey water recycling and encouraging the limited use of water with the ecology premium. VITO and VLAKWA, two research organisations, are working together with the business sector to investigate innovative opportunities for closed loop recycling, in which advanced technologies are used to purify wastewater to the extent that it is given a second economic life, for instance as cooling water or cleaning water.
At federal level, coverage against flooding and other natural hazards has been included in household fire insurance policies since 2007 (see paragraph on ‘floods’).
Commission européenne: Insurance of weather and climate related disaster risk: Inventory and analysis of mechanisms to support damage prevention in the EU (2017) (EN)
Agence Européenne de l’Environnement: ‘Climate change impacts and vulnerabilities’ (2017) (EN)
Geneva Association: Climate Change and the Insurance Industry: Taking Action as Risk Managers and Investors (2018) (EN)