by Bob Leonard and David Ross
Nobody can predict the future, especially in this uncertain time of exponential change, but there are hard trends that we can use to confidently anticipate what lies before us. Our climate crisis is one of those hard trends. We are not going to list all of the scientific evidence, or the numerous manifestations we see in the news (or experience personally). You are aware of them. Our last post discussed the need for businesses to have a purpose beyond profit. Having received positive responses to that article, this post attempts to make the case that addressing our climate crisis should be a purpose that all businesses adopt.
To limit the worst effects of our climate crisis requires global cooperation between organizations of all types and a critical mass of the humans on board Spaceship Earth. We must:
CO2 remains resident in the atmosphere for decades. Emitting any amount of CO2 adds to the accumulation. The more CO2, the more warming. Every organization should be doing all it can to reduce emissions to avoid the worst disruptions from our climate crisis. You should be looking at your supply chains, your manufacturing processes, your products, your packaging and your distribution channels. Where can you lower emissions? Designing and delivering low or no emission products is a massive opportunity. As average consumers become aware of the severity of the situation, they are increasingly searching out companies who are making a concerted effort to reduce their emissions.
Drawing down resident CO2 can be an opportunity. It’s an opportunity to get creative either via research and development to determine and deploy relevant technologies, or by launching a corporate-wide effort to draw down CO2 using natural methods. One idea would be to grow green plants on the exterior walls of company buildings, and plant vegetable gardens on the roofs.
Imagine if employees were encouraged to tend vegetables on the roof of their place of work, and to take them home, or distribute them to local food pantries. That would spread the news that Company XYZ is a good place to work, a terrific corporate citizen, and is taking meaningful action to address our climate crisis.
As creatures of habit, humans tend to change their behavior slowly, especially when a threat is perceived to be at a distance (geographically or in a timeline). But even small changes in behavior are greatly amplified by behavioral contagion — the social scientist’s term for how ideas and behaviors spread from person to person like infectious diseases.
Adaptation is making the necessary changes to minimize the risks your company faces from our climate crisis. Each organization is unique and will face its own unique risks. Does it have facilities close to an ocean shore where they will be vulnerable to sea level rise and storm surge? Does it use significant amounts of water in its manufacturing plant in a location that is experiencing longer, deeper and more frequent droughts? Does it have operations in an area susceptible to business disruption due to forest fires?
Companies can draw on a variety of risk management tools to enhance their physical, operational, and financial resilience. Enhanced business continuity planning (supply chain analyses and operational recovery strategies) can maximize operational resilience. Companies can map demographic and infrastructure vulnerabilities to natural hazards, and identify climate risks with respect to location, facility and asset.
This can become a matter of survival. How can these risks be managed? They might involve something as simple as building a seawall, or as disruptive as moving operations to another geography.
In these situations, it is easy to be blinkered in our thinking and focus on how “we” (the leadership team) and only “we” can take the steps to manage the risks that we face. Our climate crisis is a significant global issue that effects everyone. Your key stakeholders have likely been thinking about it. That’s a rich reservoir of ideas that can be tapped to develop innovative climate risk solutions.
Traditional companies often become brittle and lose the flexibility they need to survive in a Volatile, Uncertain, Complex and Ambiguous world. There are significant opportunities for companies to co-create adaptation solutions with their suppliers, their customers, academia or even NGOs. Co-creation helps in developing systemic solutions that avoid unintended consequences. The diverse viewpoints, priorities and experiences of a variety of stakeholders aids in the creation of elegant solutions. Through pooling expertise from within your ecosystem, and tackling the issue from different perspectives, this “collision” can result in real innovation. Innovation that can be transferred into the development of new products, services and markets, and to strengthen your competitive advantage.
On the issue of insurance, companies can use data to assess the adequacy of current insurance coverages under loss scenarios. Scenario analysis is a useful tool, both for understanding strategic implications of climate-related risks and opportunities, and for informing stakeholders about how the organization is positioning itself in light of these risks.
Scenario analysis can be used to assess an organization’s level of climate resilience and risk exposure. Modeling different environmental scenarios delivers a number of Plan Bs… a requirement to ensure flexibility and adaptability in an increasingly VUCA world.
All the above strategies and tactics help to make the situation real in the eyes of the public. When they see a sea wall being built, or a vegetable garden being planting on the roof of an office building, or a new drawdown technology being launched, or a request for climate-related insurance coverage, or PR releases concerning low emission products, they understand that action is being taken to meet the challenges of our climate crisis. They understand that s**t just got real. And, in turn, they will act accordingly in their personal lives, and they will demand action from governments.
After COVID, the mother of all crises… our climate crisis, is on our doorstep. Making it your corporate purpose is a way to survive and even thrive.