Climate changes continue to impact every aspect of our lives, as shown by the alarming report of August of the United Nations’ Intergovernmental Panel on Climate Change. The information discussed how climate change impacts our lives over the following years, and business owners must be aware of the potential impact. The effects of climate change could alter how you plan your business, manage, and organize your company as an entrepreneur.
The concept should be familiar to the vast majority of executives and business owners. Naturally, in Deloitte’s report for 2021, the Climate Check report shows that more than 70% of CEOs think their businesses are worried about how a warming planet could disrupt the traditional working models. Think about the extreme weather conditions that we’re witnessing more often and how they’re being discussed in the media. They’re not just causing problems for homeowners or neighborhoods. Research by Deloitte indicates that floods, storms, or other catastrophes that occur due to natural causes directly affect 70 percent of all industries around the globe. And more than one-quarter of all companies are affected–particularly those in the healthcare, consumer and life sciences, and public sectors.
Whatever industry your company is in, it is your responsibility to take temperature rise seriously to all stakeholders in your company. It is a good idea to start by thinking about three main (and often unanticipated) ways in which your company will likely be affected by the warming climate:
1. Your reputation as a business will be affected by your climate change policy.
Already, a lot of businesses are under fire in the public perceptions regarding their commitment to sustainability. The public isn’t watching in silence regarding the way their favorite brand is “greening” their workflows and processes. They’re pushing businesses to stand up and implement changes. In the end, the Nielsen survey revealed that almost three-quarters of people would alter their consumption habits to become more eco-friendly. Accordingly, many recognizable corporations–including Salesforce, Burt’s Bees, and Dell–have invested in innovative sustainability initiatives.
If you’ve never considered your company’s climate change policy now, it’s time to do so. Even if you’ve never seen a significant change in profit but, you’ll eventually. Generation Z and Millennials (Generation Z and Generation Y) are among the most enthusiastic climate change advocates. As per Pew Research Center, as their purchasing power grows and so does increase the demand on your business to take action to improve its environmental performance.
It’s the reason Germany-based BASF is taking an active role. The same goes for Walmart and its ongoing experiments with eco-friendly suppliers. The outcome is that your company’s reputation lies entirely in your hands. It’s your job to ensure that your image remains positive among your fans who are green.
2. You’ll have to be careful about workplace locations.
Have you considered scaling and expanding operations around the world in rural or metropolitan regions? Before deciding on a particular location or city, you should take some safety measures. Many areas are experiencing extreme weather conditions like coastal erosion, heat waves, wildfires, and hurricanes. These aren’t just nuisances. They impact everything from property values to the cost of insurance … and even insurance availability generally.
Andy Davidson, president of Andrew Davidson & Co., Inc. The company specializes in risk intelligence options for mortgages on residential properties as well as mortgage-backed securities. Davidson advises entrepreneurs to take a long-term view and think carefully about their business location, including the impact of a corporate site on the capacity to attract and retain loyal employees. He explains that “Employees might have difficulty affording increases to their homeowner’s premiums in high-risk areas or living with chronic disturbances such as lower air quality from fires, water shortages from drought, and long periods of heavy heat stress where they cannot go outside comfortably.”
To avoid these issues, you must be prepared to focus on the direct and indirect costs associated with doing business in areas prone to extreme weather-related climate changes. You may also want to think about other office arrangements (such as remote or hybrid working).
3. You’ll need to plan for operational and supply chain issues.
About one-third of companies feel the effects of climate change in their operations in the Deloitte research mentioned above. That’s in addition to the plethora of supply chain problems and snags that have impacted companies.
As per McKinsey research, in 2040, it’s 2 to four times more likely that a devastating storm could send semiconductor supply chains in an upswing. Recent shortages caused by the pandemic illustrate the broad impact of semiconductor disruptions across a variety of industries.
Remaining a calm and resilient mental attitude is essential to overcome this obstacle. For instance, you may wish to know what is likely to take place shortly. Perhaps you’ve already noticed indications of rising temperatures in your area. If you know this is the case, you can be confident that your costs to keep your office cool will increase unless you seek alternatives.
Additionally, you might consider paying more at the value chain that connects the products you need to produce your products. Any disruptions caused by climate change in the supply chain can disrupt the value chain as well. But, you can reduce your risk by anticipating and avoiding inevitable problems.
It is a credit to the world leaders who have taken a vow to contribute to gradual changes in the planet’s climate due to human-induced industry. However, their commitments don’t mean the long-term impact of climate change on business will disappear anytime soon. However, it is. It’s now up to business owners like you to tackle the issue seriously and implement solutions right now. The more informed you are regarding how climate change might affect your company, the less impact it’ll affect your bottom income.