With a busy week behind you and the weekend within reach, there’s no shame in taking things a bit easy on Friday afternoon. With this in mind, every Friday TriplePundit will give you a fun, easy read on a topic you care about. So, take a break from those endless email threads, and spend five minutes catching up on the latest trends in sustainability and business.
On the heels of the latest three-part report from the Intergovernmental Panel on Climate Change (IPCC), it seems a new study comes out daily about how a changing climate may impact life as we know it. It's always tricky to ask: Why now? But, as recent research shows, not asking may prove even more costly. To get your mind going this Friday afternoon, we gathered up five reasons businesses should care about climate change -- not tomorrow, not next year, but right in the here and now.
Increases in temperature, heat waves and humidity will also drive up demand for energy, calling for the equivalent of 200 new power plants across the country, which could cost up to $12 billion a year, the report predicts. Long-term impacts pose even greater risks to property and lives.
As costs of dealing with the physical effects of climate change mount, they threaten to impact the entire economy--from consumers, who may see increased insurance costs or even lose their homes due to sea level rise, through the businesses that depend on increasingly volatile commodities markets and the discretionary income of at-risk consumers.
"The cost of doing business is rising pretty dramatically," said Winston, who also advises some of the world’s biggest companies on environmental strategy. "General Mills in their last quarterly report said that due to the extreme winter they lost 62 days of production … and this cost them a significant amount for their earnings for the last six to nine months."
Employee engagement has long played second-fiddle to risk mitigation and cost savings when companies consider crafting climate and other environmental policies, but that's starting to change quickly. A recent PwC study found that more than half of recent college graduates are seeking a company that has corporate social responsibility (CSR) values that align with their own, and 56 percent would consider leaving a company that didn’t have the values they expected.
“I hear this a lot in companies: The ability to attract and retain really good people partly depends now on how you’re managing [the world's] mega challenges,” Winston told us, relaying the sentiments of Fortune 500 clients. “Companies are hearing this in recruiting, even from the millennials who are desperate for jobs.”
Four out of every five institutional investment companies responding to PwC’s survey said they considered a variety of sustainability issues in at least one, if not more, investment contexts in the past year. More than four of five (85 percent) said they anticipate doing so three years hence.
"Fund managers can’t play casino capital like the short-term traders do on Wall Street," Clinton Moloney of PwC said in a recent interview with Triple Pundit. "They’re really looking to place assets over the longer term. They’re the investors for whom sustainability really matters."
"This is the time because the costs are starting to hit, but it’s not so devastating that we don’t have the resources to react," he explained. "We’re getting those warning signs, but we’re not having the heart attack yet in most businesses. So, now is the time to get healthier before things get ugly."
But, as Winston notes, failing to act may prove even more costly in the long-run: "It’s getting increasingly expensive to not do this. If resource prices keep rising as they do, then not getting more material efficient, not building a circular economy, not finding ways to de-materialize, is going to get more expensive."
Why do you think businesses should care about climate change? Tell us about it in the comments section.
Image credit: Flickr/nicholas_cardot
Based in Philadelphia, Mary Mazzoni is a senior editor at TriplePundit. She is also a freelance journalist who frequently writes about sustainability, corporate social responsibility and clean tech. Her work has appeared in the Philadelphia Daily News, the Huffington Post, Sustainable Brands, Earth911 and the Daily Meal. You can follow her on Twitter @mary_mazzoni.