Shifting from the traditional view that the exclusive goal of a company is to produce profits for its shareholders, it is now expected that businesses position themselves to be a power for good, capture wealth in different ways and for a variety of distinct groups, and partner with other entities to address some of the most pressing global challenges we face today.
According to one recent study released by the EY Organisation in November 2022, the overwhelming majority (93%) of respondent companies have made a public pledge on climate change, but only just over a third (35%) have a commitment for 2030. In addition, less than half (42%) intend to reduce emissions by at least 45% – considering that a 45% reduction by 2030, the global target was established by the Paris Agreement to preserve global temperature increases between 1.5°C and 2°C. Only 11% of respondents have committed to net zero emissions.
Hence, there is an imperative need for businesses to step up their sustainable efforts and align their operations with the pressing reality of climate change.
Exploring the Facets of Tackling Climate Change
To effectively address the climate emergency, two components are essential. It necessitates mitigation: we must minimise the emissions of the greenhouse gases that contribute to climate change. This entails reducing our carbon production by, for example, acquiring more energy from renewable sources and sequestering more carbon, so it does not enter the atmosphere. Furthermore, it requires adaptation, which is making changes to our lifestyle, places, and economy to counteract and begin preparing for the effects of adjusting our business operations to reduce the vulnerability of communities and ecosystems.
At the level of the organisation, we must analyse how outcomes are prioritised and how value is measured and captured. At the industrial level, we should jointly modify the game’s rules, i.e., the restrictions firms confront when competing successfully and how we generate value in ways that provide climate-friendly results. Finally, at the level of the business ecosystem, the goals should be revised to place climate mitigation, adaptation, and value creation on par with growth and profitability.
These pursuits should be empowered by a thorough understanding of the effects of climate change on your business. One of the first steps to achieve this is to learn about climate change by following a cutting-edge climate change course online which uncovers how to deal with risks and take advantage of opportunities by catalysing change and rethinking the way you do business.
How to Approach Business Operations in the Context of Climate Change
As companies begin to recover from the effects of COVID-19 and return to operations as normal, the greatest threat that many of them will face comes from climate change. This suite of risks spans from the evident physical threats, including extreme weather events or disruptions in the supply chain, to the higher risks to operations, personnel, and installations posed by extremism and civil unrest. Adapting business operations will entail challenging decisions: we may need to cease performing some activities or do them drastically differently. Hence, these changes will require innovation, creativity, and a consistent focus on our objectives.
In addition, climate change includes less transparent threats, such as the transition risk posed by technological advances, greater business costs of waste reduction, and more expensive energy bills. Many businesses, even those considered to be the most inventive and forward-thinking, will have a tough time navigating this future. Businesses that do not modify their operations to be in line with the challenges posed by climate change will fall behind their competitors.
Assess the Status Quo & Develop Sustainable Targets
Conduct an analysis of your enterprises’ greenhouse gas (GHG) emissions profile, determine a reduction target, and create comprehensive and attainable strategies for reaching that target. This may require adjusting the manufacturing procedures, travel plans, logistics, and distribution. Furthermore, this might also involve shifting to the purchase of renewable energy, increasing the fuel or energy efficiency of your buildings and equipment, or providing financial incentives for your employees to utilise public transportation as an alternative to private automobiles.
Overall, your business will be able to adapt better and transform to face future challenges if the risks and possibilities associated with climate change are represented in your core business plan and values. This is the single most essential thing that needs to be done. This could take the shape of new processes and procedures or, in certain instances, a complete redesign of the company model itself. Take the appropriate measures to safeguard and advance your organisation so that it can accommodate these shifting circumstances, your business will be able to continue expanding without difficulty and with forward momentum.
Article Submitted By Community Writer