By Anika Gupta
“How will we throw shade if there are no trees?”
“This is not what we meant by a Hot Girl Summer!”
“The planet should not be as hot as my Nando’s order!”
As our planet is getting hotter due to global warming, it is evident that climate change is becoming an ever-increasing serious problem that needs to be quickly addressed. On a quick stalk on some major company’s websites, I found a multitude of sustainable initiatives and pledges to net-zero targets (by 2030 in many cases!) on show, suggesting that the business world has some understanding of the threats global warming can bring, and are trying to do their bit to ensure a “green” future.
However, it often feels like corporations are not doing enough and not fully realising the extent to which they need to consider the precarious state of our environment. This has promoted me to explore the “Top 8 ways” in which these extreme phenomena can severely affect the business world…
1. Supply Chain Disruptions: Extreme weather events like hurricanes, tropical cyclones, droughts and floods can disrupt the production and distribution of goods and services. This can lead to delays and increase costs for businesses which rely on stable supply chains!
2. Increased Operating Costs: The ever-increasing cost of energy, due to supply and demand constraints can heavily impact businesses’ operating expenses. Businesses need to find more renewable energy options.
3. Changes in Consumer Behaviour: Everyday consumers are becoming more environmentally conscious and are seeking out more sustainable and ethical products and services. Businesses which fail to adapt and become more environmentally friendly, may lose market share to more “green” competitors.
4. Regulatory Compliance: Governments globally are implementing much stricter regulations to mitigate climate change and reduce greenhouse gas emissions. Businesses which don’t comply to new pro-environment regulations may face severe penalties and fines!
5. Physical Asset Risks: Property, infrastructure and other physical assets are at risk from extreme weather events! Investment in resilient, sustainable infrastructure to mitigate these risks is a must.
6. Insurance Costs: Insurance premiums are rising as insurers face increased pay-outs due to climate-related disasters. Businesses may find it more expensive to protect themselves against climate-related risks so need to ensure they are benefitting not harming the environment.
7. Reputation Management: Businesses are increasingly judged by consumers and investors based on their environmental and social responsibility practices. Failure in having a “green strategy” can damage a company's reputation and brand value.
8. Access to Resources: Climate change can limit access to essential natural resources such as water, raw materials, and agricultural products! Corporations may face increased competition and higher prices for these resources, affecting their operations and profitability.
Undeniably, global warming and climate change pose multifaceted challenges for businesses. Nonetheless, businesses that proactively address, and adapt to, climate-related risks and embrace sustainability can enhance their resilience and competitiveness in a changing world. Businesses need to act quickly before the world gets as hot as Margot Robbie … because honestly, no one should be as hot as Barbie!