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How Climate Change is Impacting The Business Landscape?

Climate Change Impacting the Business

Whisper it quietly, but the world could be at something of a tipping point when it comes to climate change and rising global temperatures.

With the recent COP26 event in Glasgow also drove home awareness of the growing climate catastrophe, while reaffirming the role that businesses can play in creating a better and more sustainable future. 

But what’s the true extent of the crisis, and how is it starting to impact on the wider business and commercial landscape.

The Rise of Climate Change – Why Are We at a Tipping Point?

There are various strands to the climate crisis, from rising CO2 levels and ocean heat content to the global sea level rise that continues to threaten the future of nations like Bangladesh.

The studies prove almost indisputably that climate change has been accelerated through the 20th and 21st centuries, thanks largely to a significant increase in human-driven greenhouse gas emissions.

Of course, the impact of this extends far beyond climate and temperature records being broken. Instead, the key tipping points such as declining Arctic Sea ice and the melting glaciers have the potential to change fundamental parts of the earth’s system irreversibly, creating grave consequences for some populations globally.

Another key issue here is global displacement, with some climate change events (particularly rising sea levels) making some cities and towns almost uninhabitable over time.

As this trend continues at pace, the rising population will be required to live in an ever-depreciating land mass, placing an even greater strain on existing natural resources and the wider landscape.

The Impact on Businesses

Of course, the displacement of people is also likely to have a direct impact on businesses (especially those that are regional in nature), especially in terms of how they operate and the nature of their client base.

It also leads us onto the challenge of scarcity, as the world’s natural resources and bread baskets are already being compromised by an ageing and growing population.

These challenges will be compounded by climate change, creating far greater scarcity and a shortage of commodities (such as food staple). This will increase pricing and diminish supplies and demand continues to rise, creating seismic issues for businesses and households alike.

On a practical level, COP 26 also introduced goals and regulations for businesses to consider going forward. This is already creating significant regulatory and geopolitical uncertainty, creating a need for businesses to liaise with climate change lawyers and take practical steps to ensure compliance and minimise the risk of reputational damage in the eyes of increasingly eco-savvy consumers.

Similarly, businesses will have to face potentially increased insurance costs and premiums globally, while those base in afflicted regions may also be unable to insure their assets or premises depending on their geographical location.

This could cause certain ventures to relocate to change the way in which they operate, which represents a significant and costly transition.

 


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