We can deny it all we want, but climate change is all too real. It is affecting the world and human society in more ways than one, and its effects can be felt beyond scientific data sheets. This is nothing irreversible, nor is it something humanity can’t survive, and organisations big and small can make a difference. Businesses, in particular, can be a driving force in this regard, but how should CEOs think about climate action?
How climate change affects business
You’ve heard it all in the news – seas warm, glaciers melt and days are hotter than how you remember them back in the day. Businesses feel these effects, too, and here’s how climate change impacts enterprises of all sizes:
- Disruptions in the supply chain. Extreme weather can pop up in certain key locations, delaying the production of raw materials and transportation of goods. This ultimately results in revenue loss, as these untimely events can slow down production and increase costs.
- Changes in business regulations. Governments will inevitably introduce regulations to curtail the effects of climate change. The likes of carbon taxes, energy requirements, and green policies may improve how we fare in the face of climate change but will put some financial burden on businesses.
- Appearance of new business opportunities. On the flip side, the changing climate can introduce new demands and opportunities for innovation.
What is climate action?
Climate action refers to any efforts made to address the changes in the Earth’s climate, with the primary aim of mitigating the effects of global warming. While this is often included in government environmental policies, individuals and organisations can also take the initiative to put climate action into play.
How CEOs should think about climate action
CEOs might find it tough to implement climate action. This article from Deloitte sums up these executive’s roles when it comes to pushing out the concept, and here’s how they should look at the idea of taking action to mitigate climate change:
- Understand the risks and look out for opportunities.
CEOs should understand how climate change can impact business. Additionally, they should prepare themselves for an emission-free future, where many opportunities for business awaits.
- Their goals should be ambitious
When it comes to curtailing the effects of climate change, CEOs need to go big or go home. Reducing their company’s greenhouse emissions and encouraging others to do the same requires ambitious efforts to innovate and educate, engaging their stakeholders in the process.
- Call for policy change
CEOs have a great influence over their company’s stakeholders. They have to take advantage of their influence to push for and support policies that promote climate action, such as incentives for renewable energy, carbon-based taxes and pricing, and laws to regulate or reduce carbon emissions.
- Climate action should be part of their business strategy
CEOs should look at how climate change will affect their supply chains and their company’s stakeholders. As such, it is wise to incorporate climate action into their business operations and risk management.
In summary
Climate change can easily affect a business’ operation and policies. The key here is for CEOs to think ahead; this will help them ensure not just the survival of their company but also future successes.