The consequences of climate change are not yet certain on planet alteration, but we know several things for sure: its consequences will severely affect society, businesses and the ecosystem at large and governments need to establish far-reaching legislation to mitigate its effects. To date, we are witnessing the acceleration of climate change as 2021 has been a year of floods and fires. Temperature levels have increased faster than any time in the last 2,000 years. Studies have shown that an increase of 4.5°C in global temperatures could shrink the GDP by $72 trillion. Undoubtedly, these changes will have major implications for the business community if no measures are taken. Focusing on climate change resiliency, businesses have the opportunity to reduce their environmental impact, save money and attract new customers. But what approach should businesses take to fight the battle?
Work together towards carbon neutrality
Carbon emissions are one of the key contributors to climate change accelerations. The levels of CO2 emissions in the atmosphere are higher today than at any time in the last 2 million years. Until recently, companies have freely emitted carbon, but have come to understand that such emissions have a high price, both monetary and social. Existing business models need to change towards more environmentally focused ones, that adhere to renewable energy sources. A sustainability strategy is the first step, but not the ultimate one. Targets and constant monitoring and evaluation frameworks need to be established to ensure that sustainability goals are being met.
Adjust to the new normal
As climate change developments gain momentum, businesses need to handle the 3P (profit, people, planet) – more seriously and equally. This can be done by developing an innovative businesses strategy that integrates financial, social, and environmental risks and outlines commitments and expectations. This process, despite helping protect, sustain and improve human and environmental resources, will also prove successful for future business strategies and objectives.
Embrace the solution – don’t cause the problem
Undoubtedly, climate change is bringing challenges, but it is also presenting new business opportunities. These opportunities can help businesses expand and diversity to new areas that are more profitable and more effective at mitigating the impact of climate change. Some lucrative areas that businesses can exploit are investments in renewable energies, agriculture, forest produce, sustainability-linked financing, climate services etc. Some other alternatives could be focusing on climate risk-related products and services and bringing innovation in supply chains.
Following the pace of climate change and the latest developments, we are already witnessing a new set of policies and regulations that will lead to delivery of goods and services that are less harmful to the environment. As such, businesses will be challenged to produce goods and services that are eco-friendly and be part of the climate solution. While change and adoption to new normal will be inevitable, the first comers will be in the best position given the uncertainties and risks.