Climate change a threat to private sector growth

I was recently perusing through a report whose part of astonishing findings was that two-fifths of businesses in London are at risk of flash flooding. That is 40 per cent of firms the city.

It got me wondering of the perils that climate change is posing to the sustainability of businesses, not just in Europe but also across the world.

Another worrying statistic from a different publication estimated that climate change increases the cost of development in many countries by 25-30 per cent due to related factors.

Note that this also boils down to the cost of operation for many private sector companies and in the long run, it affects households’ livelihoods and the economy of a state at large.

Effects of climate change on companies’ resilience and value creation cannot be underrated, and firms across the globe are already feeling the heat. Think about customers’ changing demand and behaviours, which moves companies out of the market due to unsustainable products and services.

Some companies are exiting the stage while others are thriving and taking advantage of the situation. A great example is Beyond Petroleum, which has invested billions of dollars in renewable projects and a big winner on this front. Think about changing consumer perceptions for companies such as Nike and Apple who are likely to remain afloat for shifting to sustainability.

Changing climatic conditions affect the prices of goods and services, which translates to high production costs for companies. As the global community comes up with policies to address climate change, this also has an implication on the private sector from the perspective of the effects on revenues, costs, and exposure to risks.

The onus is on the private sector to combat climate change, primarily through mitigation and finding solutions to the already changing climate through adaptation mechanisms. Scientists have concluded that this glaring animal has been nurtured by poor practices by the private sector.

It is now threatening the existence of this same segment that the human race largely depends on for survival.

Private companies have over the years been the most significant contributor to climate change. Whereas the effect may not be entirely reversible, a lot can be done either through mitigation or adaptation to the changing times.

As I mentioned in a previous article, this may be the best last chance of taking climate action. Remember we are not just talking about making the world better for ourselves, but also for our children and the coming generations. It may be hard for flora and fauna to survive the anticipated effects of climate change.

As an urgent measure, the private sector needs to move with speed in adopting sustainable practices. These options include; going for green infrastructure and equipment and choosing sustainable processes right from the supplies, process/manufacturing to the end consumer.

It is here that issues such as analysing and accounting for greenhouse gases emissions should be considered while companies come up with measures of reducing their carbon footprints.

On top of this, organisations need to take a personal initiative of raising awareness about climate change and the broader subject of sustainability to their employees and other stakeholders.

A case in point is a multinational I am working with to develop an online course for its employees as well as other stakeholders to bring them up to speed as the company gears towards sustainability.

Besides the awareness, companies also need to promote climate change in a friendly way and even in some instances, create incentives to its stakeholders who are adopting climate change practices.

To fully implement sustainability strategies and create an implementation paradigm, organisations must develop a sustainability blueprint and the required tools. This will provide the necessary strategic direction to move the sustainability needle in the organisation.

The resulting strategic document should provide a picture for the company on its sustainability journey and outline how that big picture can be achieved.

It calls for having sustainability-trained experts to guide this process but most importantly, it comes with a lot of systems alteration within the organisation as some of the procedures and policies underpinning the existence of the company need to change.

This is not scary because it is a gradual process that is implemented seamlessly in a number of leading organisations that I have worked with across Africa.

This sustainability blueprint analyses an organisation’s background on sustainable growth then identifies the most urgent/priority areas that need the intervention of sustainability practices.

These areas will be put into an implementation matrix that is all-inclusive of all the departments and stakeholders whereby each person has a role to play in adopting sustainability. It is a collective role, and private companies ought to agree to be the pacesetters in this.