Benefits of Going Green in Business
Executive Summary
This report addressed the impact of climate change on business. It also explored the ways that can be used to counter the effects of climate change via the positive changes and recommendations that benefit both the environment and the businesses. This was through the use of the data collected via interviews and a discussion of the findings associated with climate change, especially at the workplace. The survey included twenty-two participants whose average age was twenty-two years. The participants were all employed. The study established that the changes in a climate significantly impact businesses. The stakeholders of business increase the pressures for the business to adopt better production ways that are eco-friendly and which ensure environmental sustainability. Don't use plagiarised sources.Get your custom essay just from $11/page
Introduction
In the contemporary world, there has been a growth in the impact of climate change, which is attributed to various human activities. The change of climate is found to impact the lives of human beings. Animals and plants continued to increase in the change of climate, causing detrimental effects and which can worsen if some initiative to combat the issue is not put in place. Countries across the world and organizations have worked on educating people on the need for climate change management. Governments have also set regulations and policies that help in curtailing the increased climate effect. This paper explores the impact of climate change on business and the ways that can be adopted to counter the effect of climate change.
Method
Data collection was done through interviews about the effect of climate change and the ways of countering the effects of climate change. The participants of the study included twenty-two-year-old individuals on average, and the sample size was 20 individuals.
Impact of Climate Change On Business
In the current edition of the CFO survey of Europe, nearly 1200 CFOs were enquired regarding the measures of the company against the change of climate. The outcome disclosed a mixed picture that shoed measures primarily concentrating on the short-run cost savings. The year 2019 can considerably be recalled as the years when the activism of climate was seen to go mainstream. During the end of December of 2019, there a series of rallies that were convened and coincided with the climate summit of the United Nations (Deloitte, 2019). Numerous individuals have been witnessed going on the streets, demanding the reduction of greenhouse emissions into the environment.
The build-up to the high level of awareness has, over the years, been sluggish, and activism activities have also been very slow. The action of governments started over 30 years ago when the Intergovernmental Panel on Climate Change (IPCC) was founded in the year 1988. Various treaties have been reached so far, with the first one arrived at the Rio Earth Summit in the year 1992, followed by the adoption of the Kyoto protocol in the year 1997 (Deloitte, 2019). Besides, the Paris Agreement of the years 2015 was also made to restrict the escalation of temperatures and thereby considerably cut down the impacts and risks of climate change. Over the previous years, there have been efforts to increase public awareness, which is catalyzed by the widespread understanding that very extreme patterns of weather are found to become more frequent. Following the ballooning weight of the evidence provided by the scientific studies on the constantly changing weather patterns, it has contributed to more urgency to increase awareness (Deloitte, 2019).
Supervisory authorities and the central banks across the world have now taken into consideration the change of climate as having a risk to financial stability. As a result, there has been the establishment of the Task Force that is focused on Climate-related Financial disclosures in the year 2015. The task force is mandated with the responsibility of promoting the climate-related awareness quality, transparency, and risk management.
There are various effects that the change of climate has on businesses. On the one side, the change of climate escalates a series of risks to businesses (Hillary, 2016). In addition, the most common physical threats including the operation effects of very extreme events of weather, or the shortages of supply that are as a result of scarcity of water, businesses are normally exposed to the transition risks that come into play following the response of the society to climate change. These include changes in markets, technology, and policies that have the potential of escalating business costs, undermining the viability of the current services or products as well as affecting the value of assets. The next climate-related threat for businesses is the potential liability that results from the emission of greenhouse gases. There is an ever-growing number of legal cases that have, over the years, been brought directly against the companies dealing in fossil fuel and utilities, that hold the companies accountable for the disastrous impacts of climate change.
Nevertheless, the change of climate has also been established as offering business opportunities. First, businesses can potentially aim at improving their productivity of resources, which can be achieved via escalating efficiency of energy, thereby cutting down their costs. The next opportunities that businesses can focus on climatic change include the ability of the change spurring innovation among businesses, inspiring production of new services and products which are established to be less carbon-intensive or which can ensure that reduction of carbon is attained. Third, a business can tap the climate change opportunity by enhancing the resilience of their chains of supply, through the reduction of dependency on price volatile fossil fuels through the change towards the use of renewable energy. When the actions listed above can be employed jointly, they have the potential of fostering the competitiveness as well as unlocking the opportunities of new market
Companies across the world feel the pressure that requires them to use climate-friendly production approaches. According to the latest edition of the European CFO survey, it was demonstrated that the majority of businesses feel the pressure that emanates from multiple stakeholders of the companies. Customers and clients form the most often stakeholders who act as sources of considerable pressure. However, the employees, civil society, regulators as well as investors are also causing the companies to feel the pressure for climate change.
The extent to which businesses feel the pressure is established as varying significantly with the larger businesses feeling more pressure from numerous sides. The regulators are the primary source of pressure, especially for smaller companies. The pressure that is felt from the distinct stakeholders is also found to differ significantly across the different industries in the economy. The automotive, tourism, consumer goods, utilities, and energy form the sectors where the pressure is most pronounced from each group of stakeholders. There are considerable distinctions form the particular sectors, by the extent of influence that comes from the multiple stakeholders. For example, in consumer goods, tourism, and automobile, the clients’ pressure are felt more robust. S in contrast, in the case of utilities and energy sectors, the pressure is found to come mainly from the regulators and investors.
On the other side of the spectrum, the industry of technology, media, and communications appears at present to fly under the radar considering the change of climate. The executives of the industry fail to feel especially pressured to act from particular stakeholders, except the employees of the companies since the emission of the sector is established as relatively low. Nevertheless, there is also scope for the technology, media, and communications industry to do more in addressing the effect of climate change.
Countering Climate Change Effect
countering the impact of climate change is a key concern in the contemporary business setting, and businesses need to be keen on the available multiple means of combating the issue. Various approaches can be put in place or adopted to ensure the impact of climate change does not spread to more detrimental levels.
First, there is a need to measure and analyze greenhouse gas emissions (Amran et al., 2016). The most significant first step that a business that is focused on cutting down the impacts of climate change on the environment and the planet at large and which helps in cutting down the climate is measuring the emission of greenhouse gas. Consequently, there exist numerous private organizations that are carbon footprint certified, and that can potentially assist organizations in measuring the emissions of C02. When the emissions of greenhouse gas are established, they ought to be analyzed to establish the activities of the organization that contribute to the highest pollutants. The analysis helps the companies to have a starting point in addressing the emissions.
The next step is cutting down on the consumption of energy by companies. This can be attained by various acts, including slightly lowering the heating or the air conditioner, turning off lights in the office, especially in the evening hours, or taking devices off the plugs when not in use form some of the efforts that a business can execute. Besides, organizations need to pay attention to the day to day routine actions that will help it in slightly cutting down the consumption go energy and, in turn, the climate impact (Amran et al., 2016).
Businesses can also ensure that they make use of renewable energy sources in their activities. In the contemporary world, more and more people are adopting renewable energy, and it has also become an interesting solution that companies can adopt. The move helps reduce greenhouse gas emissions; there is reduced use of fuel energy. The next step that an organization can take into consideration is the reduction of waste and fighting obsolescence. This is an alternative way of cutting down the climate footprint of companies that involves reducing the amount of generated waste. All companies that produce waste need to find ways of ensuring they minimize waste generation. For instance, companies can avoid stirrers, disposable cups, as well as capsules, especially for coffee machines. Besides, there is the need to cut down on the number of prints, sorting waste for recycling as well as reusing some of the waste such as papers for drafts. There exist plenty of solutions that are based on the facilities and the core business of the organization. Besides, the majority of the employees will have plenty of good suggestions in the event they experience motivation for adopting the eco-friendly production approaches. Other steps include optimizing the transportation of employees, choosing greener infrastructure and equipment, raising employees, clients, and other stakeholders’ awareness as well as choosing sustainable suppliers for the organization (Dutta & Dutta, 2019).
Recommendations
There are numerous approaches that the management of the business can take in addressing the effect of climate change. These may include strategy, governance, metrics, and targets as well as risk management. The promotion of disclosure in these areas helps the investors as well as other key stakeholders of the businesses to evaluate the exposure of a company to the climate-related threats and the quality that the companies adopt to respond to such risks. The management of an organization should ensure it discloses the governance of the origination around the climate-related opportunities and risks. Businesses are also expected to disclose the potential and actual effects of the climate-related opportunities and risks on the business strategy of the organization and their financial planning. In the case of risk management, the organization needs to disclose how the company identifies, evaluates, and manages climate-related threats. Moreover, in the case of metrics and targets, the companies are required to disclose the targets and metrics utilized in assessing and managing the relevant climate-related opportunities and risks.
There are numerous disclosures that companies can make based on the management discipline. For instance, the governance of the company can describe the oversight of climate-related opportunities by the board. In the strategy discipline, the organization can describe the climate-related opportunities and risks that the company has identified over the long term, short-run, and medium. The risk management department needs to disclose the process for the identification as well as the assessment of the climate-related risks taken by the organization. The metrics and target discipline needs to disclose the metrics that are employed by the business in assessing climate-related opportunities and risks that are in line with the company’s strategy and the process of risk management.
Conclusion
In conclusion, climate change has a significant impact, especially on business and their production activities across the world. There has been a witnessed trend of climate change that resulted in organizations and countries raising the alarm over the continued use of detrimental activities of humans, especially in business activities. As a result, a growing call for all people and businesses across the world has been seen to champion for managing climate change.
Organizations experience significant pressure from multiple stakeholders such as clients, government, regulators, investors, and the employees of the company to follow eco-friendly activities and ensure that they practice environmental sustainability measures. Businesses have responded by adopting key measures that are geared towards providing solutions to climate change.
References
Amran, A., Ooi, S. K., Wong, C. Y., & Hashim, F. (2016). Business strategy for climate change: An ASEAN perspective. Corporate Social Responsibility and Environmental Management, 23(4), 213-227.
Deloitte. (2019). Feeling the heat? Companies are under pressure on climate change and need to do more. https://www2.deloitte.com/us/en/insights/topics/strategy/impact-and-opportunities-of-climate-change-on-business.html
Dutta, S., & Dutta, C. S. (2019). Green business opening and its significance in the present climate change scenario-a study. ZENITH International Journal of Multidisciplinary Research, 9(4), 171-183.
Hillary, R. (2016). Climate Change: A Strategic Issue for Business. The CBI Environmental Management Handbook (pp. 41-45). Routledge.