Climate change affects your company’s competitive landscape in ways you might not realise.
The Harvard Business School is running an article analysing Competitive Advantage on a Warming Planet.
Whether you’re in a traditional smokestack industry or a “clean” business like investment banking, your company will increasingly feel the effects of climate change. Even people skeptical of the dangers of global warming are recognizing that simply because so many others are concerned, the phenomenon has wide-ranging implications.
Investors already are discounting share prices of companies poorly positioned to compete in a warming world. Many businesses face higher raw material and energy costs as governments around the globe increasingly enact policies placing a cost on emissions. Consumers are taking into account a company’s environmental record when making purchasing decisions. There’s a burgeoning market in greenhouse gas emission allowances (the so-called carbon market), with annual trading in these assets valued at tens of billions of dollars.
This is a groundbreaking article in my opinion. The business case for climate-change risk mitigation strategies has finally been stated clearly, and it couldn’t be clearer.
[C]limate change presents business risks that are different in kind because the impact is global, the problem is long-term, and the harm is essentially irreversible.
The article breaks these risks down into the following: Regulatory risk, supply chain risk, product and technology risk, litigation risk, reputational risk, and of course Physical risk.
The risk-mitigation strategies they list are as follows: Quantify your carbon footprint and make realistic assessments of your carbon-related risks and opportunities (ie Measure); Adapt your business in response to the risks and opportunities and do it better than your competitors, (ie Reduce and Offset through a transparent and legitimate source).
As GE chairman and CEO Jeffrey Immelt recently commented, “Our customers have made it clear that providing solutions to environmental challenges like climate change is essential to society’s well-being, and a clear growth opportunity for GE. Companies with the technology and vision to provide products and services that address climate and other pressing issues will enjoy a competitive advantage.”
Carbon Planet’s CO2 free™ audit package provides comprehensive emissions measurement and customised emissions reduction strategies. And for what you can’t reduce you can offset with confidence using one of the most carefully regulated carbon credits schemes in the world. — DS
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