Climate change will bring about a transformation in business as companies seek to manage hazards that we believe will intensify. They will also innovate, developing new products and processes that need less energy to produce or to use. In fact, this evolution in already underway, and while it is taking place seems a good time for the risk managers to think about what they want for their role in the business of the future.
The negative consequences of climate change, which scientists believe will include more extreme weather from fiercer storms and both more floods and drought, will have to be managed. Making the company and its supply chain more resilient to such perils, even if they become more severe, is a typical role for risk manager. Yet, companies that take only a defensive position when it comes to climate change are likely to lose out to those who see opportunities for new business.
We need a clear vision of how climate crunch will affect companies and their ability to reach sustainable growth. What innovations might businesses develop to help reduce the adverse effects of the climate change and help the world adapt to a climate-changed world? The EU’s European climate change programme sets out some of the goals for private and public sectors: consuming cleaner energy more efficiently; creating cleaner and more balanced transport options; making companies more environmentally responsible without compromising their competitiveness; and creating conditions for research and development.
Economist Milton Friedman’s thesis was that enterprise exists only for its shareholders. He claimed that companies that adopted “responsible” attitudes towards the environment would have more constraints than companies that did not, making them less competitive. Today, most big companies see more potential reward than risk when it comes to corporate citizenship, sustainability and environmental issues.
Climate change is already stimulating changes in attitude. There is more emphasis on quality of life than strict economic output. Many professionals argue that gross domestic product (GDP) fails to capture the full richness of human and environmental wealth. A new focus on “wellbeing” could help reverse trends of excessive consumption and waste. In that case, business would play a very different role in society than it does today. (See the Global Economic Climate Crunch)
Risk managers will be able to debate how they can be influencers in this profound process of transformation when we welcome Danish weatherman and climate scientist Jesper Theilgaard as our keynote speaker at the FERMA Seminar in Brussels on 20 and 21 October.
Register now for this stimulating event which is free for risk managers: https://www.ferma.eu/event/ferma-seminar-2018/
The programme includes the announcement of the results of FERMA’s 2014 Benchmarking Survey and a gala dinner to celebrate our 40th anniversary.