Wednesday, March 29, 2023

Mitigating climate change with business strategy

Adaptation, mitigation and resilience strategies to climate change have ceased to be, in the current complex and challenging context, an aspirational or philanthropic issue for companies, becoming almost an imperative.

Today, it is essential that organizations take forceful actions and develop a concrete, quantifiable and measurable strategy, which includes different work teams, actors and managers.

Among the actions that companies can include within their business strategies, with the aim of mitigating the effects of climate change, are:

Identify physical and transition risks

It is necessary for organizations to detect the risks associated with climate change that may directly or indirectly affect them in terms of business continuity and operations, logistics, access to supplies and in the value chain, considering everything from obtaining resources, inputs and processing, to distribution and marketing.

If these risks are not identified or managed, the companies’ production and operational processes may be negatively impacted, beyond just generating normative, regulatory or corporate reputation effects.

KPIs (key performance indicators) are a way of measuring both physical and transition risks, offering, in turn, the necessary traceability to justify the continuity of risk management and, thus, guarantee as much as possible the continuity of the business.

For example, the closure of a highway due to flooding could directly affect the logistics of an organization, impacting the salary and compensation of transport managers due to the lack of resources or the ability to pay for not being able to deliver the product. Taking this hypothetical scenario into account, it is important that companies identify and measure direct and indirect risks, and define action plans and alternative solutions in a predictive and non-reactive manner.

Identification of ecosystem services

Said identification must be given in cantons, districts and neighborhoods in which daily activities take place, such as work, education and leisure.

It is important, for example, that companies that have physical space make an effort to preserve and maintain green areas in optimal conditions to create natural areas with a sense of belonging, well-being and rest among their collaborators. The understanding and physical and cultural knowledge of the environments create real value that translates into the protection and conservation of common areas within a society.

This action is mainly an invitation to feel part of a community, which allows companies to be co-responsible in environmental and social terms, creating environments free of solid waste, with constant maintenance, in which vegetation proliferates.

Incorporate interest groups as allies

It is relevant to generate a chain and involvement of actors towards a common good through actions, programs and initiatives focused on climate change and, in turn, ensure that these are aligned with the line of business. This could be the case of the development of a community enterprise led by a specific company to manufacture reusable bags from industrial waste. This practice would generate a positive environmental and social impact, from a small business.

In addition to these main strategies, there are other more specific sustainability actions that companies can implement, such as:

Encourage sustainable mobilization among collaborators

Organizations must be empathetic in mobility issues, seeking to make the transfer of their collaborators to the work centers more efficient. It is necessary to identify the interconnection needs (if there is one) and stimulate internal collaborative transport, as well as sustainable mobility, reducing Greenhouse Gas (GHG) emissions and creating greater well-being among your talent. Additionally, hybrid work can be encouraged, which provides well-being among the teams and generates, at the same time, a positive impact on the environment.

Reduction of the environmental footprint

It is important to develop communication, awareness and education strategies among employees on issues such as environmental and water footprint, consumption from responsible sources and choice of sustainable purchases. In this sense, the development of guides and plans to reduce unnecessary trips, tours and transfers should also be considered.

Becoming an ESG company

It is expected that, for the 21st century, the business ecosystem will transform towards organizations that integrate their environmental, social and governance (ESG) issues in a transversal way, becoming ESG companies.

This type of organization is characterized by efficient management of its non-financial issues – including environmental (A), social (S) and governance (G) aspects – regardless of the line of business or the type of industry, whether micro to big.

ESG companies map, measure, manage, verify and communicate all non-financial aspects aligned to the type of sector or industry under which they are governed. They are companies that develop social responsibility programs that go beyond philanthropic or sustainable initiatives, as they are aware that if they do not manage their ESG issues, they may be affected on several fronts, such as: reputation issues, business continuity, cessation of operations , social license to operate or greenwashing (marketing practice aimed at creating an illusory image of ecological responsibility).

Actions to mitigate and adapt to climate change aligned with a sustainable economic transition is a “win-win” for everyone. It is estimated that the transition towards sustainability would increase the global economy by US$43 trillion by 2070, allowing the preservation of biodiversity and human survival, according to the study The Turning Point, by Deloitte (2022).


Please enter your comment!
Please enter your name here

Latest article