The effects of climate change occur every year with indications that they will continue, strengthening in intensity and frequency.
The challenges aren’t, however, solely due to the unstoppable wrath of Mother Nature. They also lie in your approach to business sustainability.
How well do our businesses and their board members really understand the imperatives?
How are they structuring their business strategies around climate change?
Are they doing it at all?
The Prime Minister’s rally mention on climate change is a timely reminder for businesses – when it comes to climate change, we are talking about an inter-connected system of events and associated risks that will inevitably have far reaching implications across the economy and the environment.
Climate change pose real risks to businesses – supply chain disruptions, damage to assets and operations, food and water supply disruptions, increased insurance claims for losses/damages caused by natural disasters, etc. With rising corporate responsibility and transparency, it is imperative that companies act on sustainability.
How can companies respond to climate change impact? Businesses can make immediate, mid-term and long-range changes.
Start to understand the risk and opportunities, and make decisions through the climate change lens. For example, when making strategic decisions, the board of directors ought to be sensitive to the changes that will emanate climate risk. Traditional business decisions that do not consider the environmental impact will come under increasing pressure from investors and consumers. If businesses are still delaying, thinking or sitting on the fence about how to respond to climate change, I’d say move a step further and start to ask: “How do we ensure that our business is sustainable in the future?” This should result in a different set of strategic decisions and direction.
Sustainability will only gather momentum when businesses acknowledge the risks brought about by climate change are real, and start to practice what is relevant in their respective industries, e.g. reduce carbon dioxide (CO2) and other greenhouse gas (GHG) emissions. In fact, the Singapore government has made a move on carbon tax and reporting compliance. Get ahead instead of being reactive!
Have a clear roadmap, to ensure all policies, programmes and investment decisions take into account the possible extent of climate change while seizing opportunities.
Lu-Ann Ong is the Executive Director of 1920RHT and she is a member of the Cambridge Institute for Sustainability Leadership (CISL) – made up of 8,000 senior leaders representing business, the public sector and civil society in every industry and on every continent – representing thought leadership, strategies and innovation around sustainable business practices.