Mother Jones counted some 40 ExxonMobil-funded organization that "either have sought to undermine mainstream scientific findings on global climate change or have maintained affiliations with a small group of "skeptic" scientists who continue to do so. It was a leading member of the Global Climate Coalition.
This wait and see approach, perhaps unsurprisingly, is particularly prevalent in situations where the actions involve significant capital expenditures e.
N the power generation sector or where the actions could commit the company irrevocably to a specific course of action e.
Discontinuing a particular product line. When challenged, companies cite the huge uncertainties in climate change policy at the national and international levels as the major barrier to them thinking about climate change in any terms other than relatively short term costs and benefits.
While there is a logic in this line of argument, it is striking that climate change, in many ways e. Pervasive uncertainty, major implications for huge swathes of the economy, changing public and consumer attitudes looks exactly the same as many of the other strategic Issues that impasses need to address.
While there may be a concern among business leaders about the risks inherent in responding to — or being seen to respond to — a green issue, the reality is that, from a business perspective, climate change is a long term structural change. If we frame climate change as a strategic issue, the logical conclusion is that companies should think about climate change-related risks and opportunities In a similar manner to other business risks and opportunities.
That Is, they should assess how climate change may affect their business and, based on this assessment, make decisions that allows them to protect their business against downside risks, maximize upside opportunities and ensure that their business strategies are not a one way bet on climate change policy in either direction.
First, it suggests that companies need to rethink the time horizons they use in their corporate risk assessment and strategy processes. While most large companies already have structured processes for identifying and assessing the business implications of potential changes in regulation, changes in consumer attitudes, MONGO campaigns, etc.
Most tend to concentrate on short to medium term risks, typically those with a maximum time horizon of three to five over a longer time frame, this three to five year frame of reference is likely to see any important dimensions of climate change-related risk simply excluded from analysis.
Second, it suggests that companies need to revisit their capital investment processes.
For most companies, the single biggest opportunity they have to future proof their businesses and create longer term business value is when they invest capital, whether into new projects, new products or upgrading existing equipment. If climate change is factored into these decisions e.
Wrought a shadow price of carbon, through considering a range of scenarios about regulation and the physical impacts of climate changeit maximizes the likelihood that companies will make decisions that do not result in stranded assets or lost revenues because of regulatory or other action on climate change, and will avoid the need for extensive retrofits at a later date.
Third, it suggests that companies need to develop corporate information, knowledge and expertise on climate change. The companies that have gone furthest in integrating climate change into their business strategies emphasis how much time and effort they have invested in testing new technologies and new approaches.
This means that when it comes to investment e. In a new vehicle fleet they fully understand not only the financial aspects of their decisions I.Being able to react and adapt to climate change is important for financial success and organizational sustainability. Explore new resilient business models that account for climate change in your business strategy.
Improved energy efficiency has emerged as a key component of corporate climate change strategies. Companies participating in the global EP initiative pledge to double their energy productivity (dollar of output per unit of energy), which has the potential to save more than $2 trillion globally by Climate change is one of the most pressing challenges facing the world today.
And increasingly, it's become a crucial business issue. How will you and your company respond?
In Climate Change: What's Your Business Strategy? Andrew Hoffman and John Woody provide concise and reliable advice to help you answer this question/5(2). The companies that will be best positioned to respond to the inevitable business and societal stresses imposed by climate change will be those that have recognised climate change as a strategic driver of business value, that have taken a longer term view of the business implications of climate change, and that have built climate change into their capital investment decisions.
Climate change is now a fact of political life and is playing a growing role in business competition.
Greenhouse gas emissions will be increasingly scrutinized, regulated, and priced. In the climate-change context, reputation risk can be understood as the probability of profitability loss following a business’s activities or positions that the public considers harmful.
A poor reputation on climate can hurt sales through consumer boycotts or local community protests.