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Is climate change relevant to businesses? (140 or less)

August 15, 2013

In keeping with my latest challenge – presenting a tough topic in 140 words or less – today I’m taking on climate change. Previously I wrote about human rights and business.

The reaction on social media was positive, quite a few shares and re-tweets – thank you all very much! I did receive one question from Dana Fatol, who asked how I saw leaders using human rights to reduce costs. Indeed a good question because the link isn’t as obvious as some of the other examples. I responded by clarifying that I think costs can be reduced primarily through two ways: the improvement of quality and the potential reduction of transaction costs due to switching suppliers if a crisis were ever to arrive.

The text below answers the

question “What is climate change and why is it relevant to businesses?”

Hurricanes, tornadoes, and floods are more powerful and more frequent than ever. The overwhelming majority of scientists agree that these examples of climate change are due to mankind. In particular, we are making the problem worse through the emissions of greenhouse gases such as carbon dioxide and methane.

Climate change has direct and indirect impacts on a company’s operations. Companies might face raw material risk due to the effects of severe weather on crops and forestry. Or, while Washington is locked in gridlock, the states and municipalities that enact differing climate regulations create regulatory risks.

Moreover, companies like Walmart have measured their company’s impact on climate change to achieve business results by identifying inefficiencies and thereby reducing costs, such as energy expenses.

In essence, managing your contribution to climate change is a method to manage your business better.

Word count: 138

One Comment leave one →
  1. August 15, 2013 2:39 am

    Considering climate change, which is indeed inevitable and “supported” by human kind, should outsourcing be taken into account as an option for businesses?

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