The Impact of Climate Change on Businesses

 

Climate change is becoming a real issue for our planet. A word, which was mostly advocated by environmentalists, now is a worldwide problem that requires a global solution. As most believe, climate change does not only have environmental consequences, such as floods, higher temperatures or elevated sea levels. In contrast, it is causing disturbances in every industry. It is not only up to future urban planners to shift their business operations and adapting to the changes. This change is affecting, financial planners, farmers, doctors, engineers, and many other professions, who will, sooner or later, find their industry affected.

Even though it is hard to determine the severity of damage resulting from climate change in specific industries, yet some of these alterations are already being seen. Due to disasters such as droughts and hurricanes, we will likely see significant disruptions that will cause severe implications for businesses, both financially and physically. A simple shortage and reduction in the supply of agricultural products due to a shortage of water can lead to a reduced supply of food, a quick increase in global commodity prices, inflation and potentially an economic downturn. As these climate changes affect almost every industry, the demand for certain products will also shift. For example, given the rapid increase in temperatures, there will less demand for products needed for heating. In this context, as winters are becoming warmer and shorter, the skiing industry may lose substantially large amounts of money. According to an estimate made by the University of Waterloo, approximately two-third of European resorts will be forced to close. Industries in which intensive physical labor is needed will encounter difficulties given the rise in temperatures. The working conditions will become harsher, thus the health and safety risk in specific industries will rise. The costs as well. Businesses will also be impacted by changes in regulations and policies which aim at mitigating the overall climate change issue. Companies that emit larger amounts of CO2, will have to invest massive amounts of money to upgrade their equipment to reduce or eliminate emissions. Ultimately, there is the public pressure factor, which in one way or another, has a substantial role in the overall performance of the company. As we are seeing more people becoming a proponent of environmental issues, customers are looking for products that are strictly sustainably produced, or to some extent contribute to environmental protection. This has forced companies to start thinking more seriously about social responsibility and start taking measures that tackle environmental challenges.

It is evident that climate change will have a profound effect on the cost of doing business for companies. Therefore, it is a must to start taking action. The first thing to do is to conduct a deep analysis of internal processes and determine how much the company impacts the environment and the risks it faces due to changes in climate. As such, identify the existing opportunities for improving the environment. Therefore, as consultants in renewable energy, ECIKS guides its clients towards adopting the best practices for protecting the environment and improving business performance.