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Climate Change Effects on Business: 5 Reasons Why You Should Care About Sustainability
• Date: May 2023 •
Estimated reading time: 8 minutes
Estimated reading time: 8 minutes
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"We are running the most dangerous experiment in history right now, which is to see how much carbon dioxide the atmosphere can handle before there is an environmental catastrophe." — Elon Musk
Despite climate change being a real threat, hanging like a sword of Damocles over humanity, most people and businesses choose to put off their participation in its solution.
Obviously, there are more short-term issues that require our attention: how to keep our businesses thriving in times of economic uncertainty, and AI development, how to win over competitors, how to grow into new markets, the list can go on.
However, if we close our eyes on a problem, it won't make it go away.
So in this article, we'll tackle the reasons why your business should consider sustainability and some actionable steps you can take now.
Contents:
How Does Climate Change Affect Business?
According to Deloitte's 2021 Climate Check Report, nearly 30% of executives say their organizations already feel the operational impacts of climate-related disasters and more than a quarter are facing a scarcity of resources due to climate change.
Source: Deloitte's 2021 Climate Check Report
There are different types of business risks connected with climate change:
Physical risks
However irrelevant they may sound, physical risks pose real threats to businesses, with the leisure and agricultural sector being particularly exposed. These risks come from the physical environment such as floods, hurricanes, droughts and wildfires, all of which can cause damage to people, property and transport links.
Regulation and policies risks
Companies must now adhere to stricter environmental standards, such as The Paris Agreement, ensuring that their operations are more sustainable. For example, the energy industry is now to rely on renewable energy sources and net zero carbon emissions. Additionally, the introduction of carbon pricing measures may potentially put the mining industry at financial danger.
Reputation risks
Companies may also face reputational risk as wider society changes its view on ethical business practices.
5 Reasons Why Your Business Should Care About Sustainability
These are five factors why your business should consider sustainability not only to help in solving our common threat, but also improve your business operations:
1. Customers prefer sustainable businesses
According to Deloitte's Sustainable Consumer research, 85% of consumers in the UK have adopted a more sustainable lifestyle during the Covid-19 pandemic and a third of consumers look for sustainable businesses when buying.
Increased media coverage and public awareness of environmental issues has significantly influenced buying habits. Customers want to make sure their money is going towards companies that are actively making the world a better place.
For example, businesses may focus on developing green products, reducing waste, and transitioning to renewable energy sources.
2. Sustainability can help in reducing costs
By utilizing sustainable practices, organizations can better manage their resources and reduce their emissions, which can lead to lower operating costs.
Additionally, organizations that embrace sustainability can gain access to new markets and customers who are more likely to purchase from socially responsible companies.
Not to mention more investment opportunities since investors now are more likely to support sustainable business practices.
3. Increased employee morale
It's a common practice now for companies to implement codes of conduct, monitor their environmental impacts and working conditions, adopt standards for environmental and health and safety management systems, and create sustainability reports.
All these regulations make employees choose sustainable companies thanks to such benefits as flexible working hours, paid leave policies, and access to learning and development resources.
Moreover, common vision shared by the whole team adds more sense to work and boosts morale.
Source: McKinsey&Company
4. Tax incentives and regulations compliance
Federal, state, and local governments offer a range of financial incentives for undertaking environmentally-responsible activities, which allows you to scale your business.
Moreover, reducing the risks connected with compliance, will put you at lower risk of facing legal action and fines the number of which is only likely to grow in the future.
5. Staying competitive in the market
Sustainability is a source of innovation and creative solutions.
The MIT Sloan Management Review's first annual Business of Sustainability survey revealed that sustainability practices can help businesses stay competitive by increasing labor productivity and improving innovation results.
How to Implement Sustainability in Organizations?
Depending on the goal of your sustainability efforts, the steps can vary, however, the general approach includes the following:
Step 1 - Create a vision
Choose the focus of your sustainable practice: whether it is to reduce carbon emissions, create new partnerships with nonprofits, or create a sustainable workplace. Start small to make sure your vision is achievable.
Step 2 - Encourage employee participation
Assemble a multi-disciplinary team to include experts in the various areas of sustainability. This team will be responsible for setting goals, gathering data, implementing strategies, and evaluating outcomes.
Step 3 - Gather data
Sustainability efforts can lead to success only if you can report on the differences. If you want to rethink your supply chain, you will need to have all the data related to the impact of your business on the environment.
Step 4 - Use automation
Once you've set up the vision, and gathered the data, you can use innovative automation platforms to help you guide on the way to sustainable management.
How Can Salesforce Net Zero Cloud Help Achieve a Sustainable Business?
Given the growing pressure to reduce carbon emissions and the increasing scrutiny of net zero commitments, companies are looking for intelligent solutions to meet their goals. One example is Salesforce's Net Zero Cloud, which helps companies achieve a sustainable business by providing tools and support to measure, manage, and reduce their carbon footprint.
The platform provides access to detailed carbon reporting, greater visibility into scope 3 emissions, and the ability to set and track progress towards net zero targets.
"Net Zero Cloud is helping customers build maturity around carbon accounting ahead of the impending CSRD regulation – improving automation, data accuracy and predictive analytics to accelerate their path to net zero" – Ryan Joyce, Head of Net Zero Cloud UK/I & North Europe
Additionally, the Net Zero Cloud enables companies to gain insight into their supply chain emissions and identify opportunities to reduce their carbon emissions. By leveraging this cloud-based technology, businesses can make informed decisions about their carbon reduction strategies and ensure they are meeting their sustainability goals.
- Ryan JoyceHead of Net Zero Cloud UK/I & North Europe at SalesforceNet Zero Cloud forms a crucial part of the Salesforce c360– a single source of truth for all customer interactions and ESG data – this is a powerful combination, generating insights which allow customers to decarbonise their supply chain, decarbonise their products and communicate these changes proactively to their customers to inform more sustainable buying decisions.
If you need a consultation on how you can obtain sustainability in your business, talk to us.
Twistellar's team has carried out a number of industry-oriented projects and we are always open to discuss yours!
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