Five steps that will make your business more climate resistant
No business is immune to the devastating effects of climate change anymore, as we saw from the onslaught of extreme weather events in 2017. Disasters brought more than $300 billion in damages in 2017, a 60-percent increase over 2016.
As every business leader has long known, storms, flooding, wildfires and other calamities all threaten to disrupt their operations and growth, and can even affect an entire supply chain, edf.org wrote.
What’s new is that shareholders and potential investors are also now aware of the risk that extreme weather and natural disasters pose to ‘doing business as usual’.
Unsurprisingly, a growing number of companies are factoring resilience to climate change into their operations. It’s about the bottom line: Making a company more resilient is an investment in business continuity, shareholder value and overall performance.
Here are five concrete steps businesses, large and small, can take to hedge against climate risks.
1. Analyze your vulnerability in an unpredictable world
The first step is to do a business impact analysis that will identify risks, simulate worst-cast scenarios and identify
3. Know your supply chain
Even the simplest supply chain can be an opaque, multitiered mystery. Mapping it means understanding not just your own suppliers’ risk, but risks that suppliers face.
Risk management should become a regular part of discussions, key performance indicators and reports whether or not risks are occurring. This may also require training and education – maintaining relationships with all tiers of suppliers is essential.
Cast in point: Starbucks. Warmer temperatures and more rainfall are having a direct effect on Starbucks’ sourcing of coffee from Africa, Asia and Central America. Many coffee farmers struggle with decreased production and an influx of disease and pest hurting their crops.
So the coffee shop giant is now working with farmers and researchers to develop new coffee varieties that can
5. Address climate change, the root problem of it all
Of course, adaptation is only half of the solution. Today, we have countless examples of business leaders who realize that reducing greenhouse gas emissions is imperative to business growth and a healthy bottom line.
Walmart, for example, has asked its vast supply chain to slash one gigaton of greenhouse gas emissions, while making its fleet of trucks and buildings more energy efficient.
Similarly, United Parcel Service (UPS) announced an effort to develop and test a new technology that would convert the company’s delivery trucks from diesel to electric — continuing a trend of businesses seeking to reduce their carbon footprint.
These leading brands are also increasingly demanding sound federal and state climate policies to try to limit future risk. Understanding and assessing climate-related risks is good business, and essential for long-term planning and adaptation.
Business leaders who plan for a more disruptive climate future and act decisively will ultimately differentiate themselves from those that don’t.