How Climate Change Will Transform Business: Climate change, natural disasters and extreme weathers will not only have consequences in the natural environments but also within different business that will have to adapt to the changes coming in the next decades. Risk analysis, weather forecasts and worker’s health preservation are a must in all company’s agendas that will help them get through the coming scenarios predicted by global warming experts.
In this article, 10 ways in which climate change will transform businesses in the coming decade will be presented.
1. People’s vulnerability to warm temperatures
Temperatures are expected to increase due to climate change. In some countries these changes may be more drastic than in others where the changes may be more modest. However, climate change will affect people’s health both in extreme and temperate climates. Higher temperatures increase many diseases occurrence and deaths. This diseases may be related to cardiorespiratory conditions, mosquitoes transmitted diseases (malaria, dengue, chikungunya) and infectious diseases. Heat stress is also expected to increase significantly the number of deaths in many vulnerable regions, which could be merged if global warming remains limited to 2˚C.
All these events will certainly affect the available workforce in all industries worldwide, but industries located in vulnerable countries with poor working conditions will be the most affected.
2. Water supply
Droughts, floods and irregularities in precipitations will eventually affect water supplies, leading to water shortages worldwide. By 2030, it is estimated that 50 per cent of the world’s population will live in areas without enough water supplies. According to the UN, 3 out of 4 jobs in the global workforce are water-depending. This means that this issue will definitely affect not only job creations but also economic growth in the coming decades. Sectors like agriculture, sanitation, industry and mining are water heavily-dependent, while industries like construction, transport and recreation are moderately dependent.
3. Climate change adaptation investments
Despite many forecasts can be made regarding climate change consequences, natural disasters are highly unpredictable. This means that industries and companies will have to prepare their infrastructure to diminish these climate-related risks. Investments in infrastructure may include more elevated roads, stronger buildings and improvements in working conditions.
4. Energy sector will switch to renewables
One of the main causes driving climate change is fossil fuels burning for energy. Therefore, many developed countries are already switching their energy production from fossil-fuels based to renewables-based, showing its commitment to combat climate change. This means that (hopefully) in the coming decade, most developed countries will start producing renewable energies as well, which will lead to a drastic change in workforce and production systems in the energy industry. These modifications could create 18 million additional jobs in the energy industry by 2030, because renewable technologies require more jobs per MW generated than fossil fuels do.
5. Changes in construction strategies
Roads, buildings, bridges and tunnels built worldwide will need to be prepared to face extreme weather events induced by climate change. When most of these structures were created, nobody expected the storms, floods and hurricanes we are experiencing nowadays (and will continue to experience in the future). These disasters along with heat-stress events will affect the durability of the materials and indoor cooling systems, that will need to be strengthened to resist extreme temperatures.
On the other hand, architecture projects will have to reduce their carbon footprint to contribute to climate change mitigation policies. This can mean using less energy, implement passive-house principles and reducing the amount of resources used.
6. Transforming the insurance business: Resilience bonds
As was mentioned before, climate change effects can be mitigated by preparing and strengthening cities and infrastructure. However, these actions need huge investments that most governments are not prepared to afford. This is why resilience bonds were created and are being implemented by insurance companies. This bonds allow insurance companies to make huge investments that could potentially mitigate climate disasters consequences. This strategy is creating opportunities around the world to save millions (or billions) of dollars by mitigating the catastrophic effects that climate change may have in high-risk cities and areas. According to the Federal Emergency Management Agency, for 1 dollar spent in prevention, 4 dollars can be saved in reacting to climate disasters.
7. Big company’s production changes
To accomplish environmental goals for climate change mitigation, big companies like Google and Apple are already switching their energy supply to renewables. In addition to this, policies regarding recycling, waste disposal and water usage are also being implemented.
8. It will be appreciated when people have knowledge in sustainability issues
An increase of the demand for environmental-related careers is expected for the next decade. Also, environmental regulations are starting to play a main role in most companies. This means that every company will eventually need to have employees trained in sustainability and environmental policies and practices. 62% of company’s executives consider that a sustainability strategy is mandatory for their business growth.
9. Food security
Extreme weather effects will have direct consequences in agriculture and crops production. Droughts, floods and temperature instability may not only alter growing seasons but also lead to crops growth disruption and nutrients deficiencies.
According to different experts, dietary changes need to be addressed in order to mitigate some of these climate change impacts in the food chain. Plant-based foods and vegan consumers had a huge impact in the food industry, changing production methods and ingredients among companies like food chains and grocery stores. Many of these stores are now delivering at least a few plant-based option in their menus to accommodate vegan consumers in their facilities as well.
The Vegan Society claims that between 2012 and 2017, the plant-based foods demands grew a 987%. Also, the vegan food market price is expected to grow 10.6% from 2019 to 2026, reaching a value of 31.6 billion dollars.
10. Travel
Some destinations most affected by climate change may not be so attractive for tourists in the next decades. Heat-stressed areas are likely to receive fewer tourists who will prefer to travel to places with more moderated temperatures. However, different strategies are also being taken in consideration by the travel industry like buildings upgrading and a modification in the activities they offer to re-position each destination and change the products they can no longer offer.
Some of the most affected activities will be coastal cities (due to sea levels rise), ski centers (lack of snow because of short and warm winter seasons) and wild areas affected by forest fires.
-Belén Silva
How Climate Change Will Transform Business
References
Bennet, J., Blangiardo, M., Fecht, D., Elliot, P., Vulnerability to the mortality effects of warm temperature in the districts of England and Wales, Nature Climate Change
Ahmadalipour, A., Hamid, M., Escalating heat-stress mortality risk due to global warming in the Middle East and North Africa (MENA), Environment International.
Input document for the g20 climate sustainability working group, The employment impact of climate change adaptation
Buckley, R.C., Climate Change: Tourism Destination Dynamics, 2020.
