Most business owners are likely to be aware that climate change can have an impact on how companies of all sizes work both now and in the near future. In fact, the UK government considers the issue to be a serious systemic financial risk. This may explain why they have brought in new regulations and guidance that businesses must adhere to, so that the country as whole can meet its climate change targets on time.
Increased cost of good and services
Energy regulations that have or are likely to be soon implemented will not only impact upon those businesses within the energy sector but also most others due to the increase in costs that they will inevitably cause. Changes in the cost of business utilities and transportation will have to be either absorbed by businesses or passed on to the customer – either way this will affect businesses.
Less reliable weather
It has been demonstrated by various scientists, including ones from the United Nations (UN) that climate change will, and already is, changing the pattern of weather systems throughout the entire world. This will see things, such as tropical storms, becoming much more severe and thus will have a range of different impacts upon businesses – going above and beyond losses for those companies within the insurance sector. For instance, shipping goods across international waters will become much more difficult and dangerous. Businesses located on coast lines are likely to suffer from repeated incidents of bad or unpredictable weather.
Shifting demand for goods and services
With changes to weather and prices being inevitable, changes in the demand for certain goods and services can be expected. For instance, in those areas where temperatures increase, the demand for heating products, such as oil, will decrease. The demand for products related to cold weather, like skis or snowboards, will also go down. However, these things could also present new opportunities for businesses also. For instance, there are a number of businesses out there, such as Dr. Bonner’s and Patagonia, have gained success by focusing on manufacturing products that are environmentally friendly.
Shifting consumer perceptions
Regardless of size, it is very important for any business to have a good reputation. Nowadays, more and more of them are looking to gain a reputation for being environmentally responsible. An example of a company doing this is the British multinational oil and gas company, BP. Over recent years, they have put huge amounts of financial investment in an environmental project called ‘beyond petroleum’. In addition to this, they have also put lots of money into various projects surrounding renewable energy.
It is clear to see then that no matter what industry a business is in, it will very likely be impacted on by climate change – if not directly then almost definitely indirectly. For more information on how climate change can impact on your business and what you, as a business owner, can do in order to nullify this risk, this business guide to climate change is of real help.