Experts confirm that climate change will impact business revenue by nearly 25% over the next eight decades. Rising temperatures on a global scale could bring down the world’s GDP by tens of trillions of dollars.

Within a decade, the world’s global temperature is expected to rise by an annual average of 1.5°C, leading to irreparable damage and impact to survival, health, sustenance, potable water levels, human safety and economic growth. Restricting the annual rise in temperatures to 1.5°C already implies a mammoth transformation in how industries leverage energy, land, transport, industrial systems and other resources.

The business impact of climate change cannot be ignored despite the extent to which technology has permeated commercial activity. Many jobs such as masonry still demand hard and physical yet precise work. Failing to do so can seriously jeopardize the safety of those occupying the building premises.

Working Conditions

Harsh weather such as extreme heat or cold can affect productivity and consequently, project deadlines. With climate change, such conditions are becoming increasingly frequent with longer spells of heat or cold. Also, due to sudden and unexpected changes, it’s also more difficult to forecast the weather.

Supply & Demand

Businesses thrive and depend on the timely delivery of products. This requires adequate and prompt provisioning of raw materials and other integral components. Climate change can disrupt these supply chains and in turn affect production schedules.

The meat-processing business was severely hit during the 2011 Great Plains drought and many businesses had to either shut down or shift operations to an alternate location. More than 20% of cattle herds in the US are located in regions prone to drought.

Lumber, which is an alternative to masonry, can be impacted through stricter regulatory norms, additional taxes and tariffs. Fossil fuel prices are bound to increase, which would make shipping heavy cargo more expensive. Alternately, the rise in consumption of clean energy sources amongst the public can bring down shipping costs.

Location Specific Environmental Hazards

Facilities, operations and management need to adapt to their environments and protect against location specific hazards. Climate change can make regional weather conditions more erratic, resulting in sudden rises in sea levels, droughts or other changes that businesses with conventional emergency plans might not be prepared for.

Resource Management

While more than fifty percent of businesses today are affected by resource availability constraints, merely 10% of organizations have prioritized resource management.

Brand Perception

Most customers today are extremely sensitized to the consequences of climate change and wouldn’t want to purchase goods without verifying the manufacturer’s green credentials. Buying goods the manufacture or consumption of which directly or indirectly contributes to more toxic emissions, global warming or environmental hazards would reflect unfavorably upon them as consumers.

Climate Change Resiliency

Staying resilient to climate change must be prioritized above sustainability, especially when unpredictable weather becomes increasingly commonplace. Business as usual is giving way to continuous transformation.

Shortages in oil, water and rare earth metals for manufacturing electronics and batteries are more than certain in the years to come. Organizations need to take appropriate measures to meet the rising demands of a burgeoning worldwide population, such as:

• Exploring the feasibility of alternate materials, services and solutions across the supply chain network
• Reducing production delivery time frames to be less reliant on raw materials
• Investing in and adding value to existing personnel through training and knowledge transfer initiatives to optimize business operability during emergencies

Waste Management

Climate change resiliency initiatives also indirectly make reuse, recycling and reprocessing more prevalent. These initiatives are already gaining momentum and regulatory norms around the world are obliging businesses to implement waste reduction strategies by way of policy.

Businesses today are working towards meeting their regulatory requirements and gaining a competitive advantage by incorporating waste management strategies into their daily operations but without compromising the company’s long term goals & objectives.

Take the consumer industry which is abuzz with new and innovative proposals to minimize packaging wastes. An e-commerce firm that’s committed almost entirely to the reduction of packaging wastes can never protect its business from the hazards of climate change. Unlike their counterparts in traditional brick and mortar stores, e-commerce products are handled by numerous personnel during their transit across the supply chain. Compromising on packaging standards in a bid to reduce packaging wastes would only increase the number of goods damaged during shipping.

Commercial Value

Nevertheless, many businesses have struggled to convert climate change resiliency into a financially viable proposition. For example, it’s easy to recognize the profitability of front end savings. However, additional costs that indirectly lead to more profitability must also be archived to justify that your company has chosen the best solution. This requires an investment that firms today are slowly beginning to make.

Conclusion

Adopting climate change resiliency must directly correlate to a more profitable business model. This in turn will foster a culture of data driven decision making.