In February 2021, Texas suffered through a historic cold snap that knocked out a power grid ill-prepared for the increased electricity demand. Months later, June and July saw a record-breaking heatwave tear through the Pacific Northwest, where buildings tend to lack air conditioning capabilities.
Scientists tend to be hesitant to directly attribute extreme weather events to the global trend towards climate change. But that’s mostly a matter of procedural caution. The link is obvious, but proper research takes time and diligence before it can be published.
Even as science is now strongly establishing the correlation between a warming world and such dangerous weather fluctuations, businesses don’t require peer-reviewed studies to take action. They need to make emergency service calls for heating and cooling to continue operations. They can’t afford to stand pat as a changing environment starts to become an increasing liability.
Impacts on many levels
Climate data tells us that the average temperature increase per decade is a fraction of a Fahrenheit degree. This leads to the common mistaken assumption that global warming is a gradual problem with marginal effects.
The patterns we’ve seen demonstrate otherwise. Over a six-month span in 2021 alone, areas that normally don’t have to worry about extremely hot or cold weather have faced major problems along those lines. We need to stop looking at the average change and start weighing the potential risk of outliers and so-called ‘black swan’ events.
The impacts are manifold. Economically, we could lose 11 working hours per worker on an annual basis. That lost productivity already translated to 0.07% of the 2016 GDP, and those costs are only rising. To think that lost hours are the only cost is also erroneous. Lives have already been lost to these recent events, and certain businesses have no choice but to shut down their operations under such conditions.
Other considerations go beyond workplace safety and employee productivity. Supply chains are prone to disruption. The products of agriculture and forestry used in food and manufacturing are particularly vulnerable to drought, flooding, and storms. Our ability to transport raw materials and finished goods is obviously affected by these weather extremes, but so are the transportation and handling costs as electric demand increases.
Rising consumer activism
Perhaps even more worrisome for modern companies is the shifting public sentiment. While consumers have been aware of issues concerning the impact of business activities on the environment, the age of information is tilting the balance.
The environment is a top concern for the biggest demographics, millennials and Gen Z, who are also digital natives. Through the internet and social media, consumer awareness has grown exponentially, and each individual now has an outsize voice in a highly passionate discussion. According to Deloitte research, 2020 was a tipping point for business and society in this realm.
Consumer activism is higher than it’s ever been, and it’s only set to keep on growing. In the previous year, 38% of respondents actively engaged in environmental issues through signing petitions, joining a protest, or donating to a cause. Far more will take the easier step of voting with their feet or with their online wallets.
And in the face of mounting public pressure, industry regulations are bound to tighten. Carbon taxes, cap-and-trade programs, and incentives to switch over to renewable energy are increasingly being implemented worldwide.
Actionable steps for companies
The flip side to this burgeoning issue is that if a company takes the right measures to improve, they don’t just stand to mitigate the impacts of climate change. They can also benefit from increased brand loyalty and a resulting boost in revenue moving forward.
To do that, the first item of change for most businesses will be their targets. Too often, companies commit to small goals: a recycling initiative, paperless offices, reduction in fleet size, and use. Leadership on the environmental front requires that we let science determine our objectives.
For starters, you can go for full disclosure of carbon emissions by becoming a CDP member. This leads to the next actionable step: collaboration. CDP-accredited providers can offer recommendations and insights to bring your company practices in line with sustainable goals.
Finally, businesses need to embrace innovation when it comes to tackling environmental challenges. Data analytics, for instance, can be applied not only to market research but towards optimization of a company’s fleet economy and vehicle loads. We innovate to differentiate, but we must recognize that differentiation isn’t just a matter of offering new features, products, or services. Instead, it can be all about how you lead the way in clean and truly sustainable business activities.