According to climate science, almost 300 companies have committed to reducing their greenhouse gas emissions. Many have adopted goals to be carbon negative by 2030, such as using 100 percent renewable energy. Others have made public commitments to reduce their emissions by purchasing carbon offsets from projects like reduced deforestation. Increasing their corporate responsibilities to reduce carbon emissions has lowered their costs, increased product sales, and improved competitiveness.
While most U.S. businesses have remained silent on climate policy and have even opposed it, a few key companies are using their collective influence to push for Congressional action on climate change. Some companies have even declared a climate emergency. Other companies have implemented new initiatives such as water fountains to replace plastic bottles. And some have penalized air travel.
Investors
In the face of mounting environmental threats, more investors are thinking about climate change and the consequences of their investments. Approximately eight to nine inches of sea-level rise has been recorded globally since 1880. Investors can play a role in addressing this problem by evaluating the environmental risks of their investments and investing wisely.
By supporting the efforts of corporates to reduce their carbon footprints, investors can help companies transition to cleaner sources of energy. Providing patient capital can inspire management teams to adopt a decarbonization strategy and set emissions baselines. They can also help companies transition through their supply chains, as eight global supply chains account for nearly half of all greenhouse gas emissions. Investors can help fund the change by educating themselves about the benefits of regenerative energy and the environmental costs of fossil fuels.
There are still many barriers to assessing climate risk. There is no universal standard for carbon dioxide emissions, so governments are putting their prices on the gas. However, many investment firms are assessing climate risks on two different dimensions. Physical risks involve rising temperatures’ economic and environmental impact, more frequent extreme weather events, and sea levels. These risks reflect the potential losses due to climate-related changes. So far, investors are making a difference.
Employees
To start, companies must identify concrete actions to reduce emissions. These actions could include renewable energy projects, energy efficiency, reducing the use of scarce resources, and protection against extreme weather. These actions can be done in several ways, including encouraging employees to carpool or take public transportation instead. Providing discounts for public transport can also reduce indirect CO2 emissions and help businesses become more sustainable. Measurable results must back these actions.
In addition to addressing these concerns, businesses can also leverage the power of technology to develop more sustainable products and services. Companies can also target resources and energy efficiency to reduce costs, which will spur innovation and help companies innovate and inspire others to reduce their carbon footprint. Furthermore, by reducing the use of volatile fossil fuels and shifting to renewable sources, businesses can improve supply chain resilience and unlock new market opportunities.
Governments
Companies have an essential role in combating climate change, but how can they help? By establishing policies and practices, they can minimize their carbon footprint. Companies should reduce their energy consumption and use renewable resources where possible. But if businesses are to be successful, they must be committed to making changes to their operations, whether that means switching to solar power or building alternative energy sources.
To be successful in the fight against climate change, businesses must do more than talk the talk. They must take concrete action. These actions include switching to renewable energy sources and reducing their dependence on limited water resources. Businesses also need to implement mitigation strategies to protect their supply chains and the environment. They must also integrate their commitment to a 1.5-degree target into their overall public affairs and corporate policies. By taking action, businesses can demonstrate their commitment to a cause and build goodwill among communities.
There are many challenges associated with the global economy. Many companies will face the possibility of climate-related disruption to their business. However, if companies are responsive to these challenges, they can see opportunities in the long run. Companies need to develop innovative strategies to address climate-related challenges. Ultimately, they must embrace the opportunity to create new products, services, and business models that address the issue. And they must do it quickly.
