Climate change poses a great risk to the world’s economy. Progress has been slow in assessing business risks. Catastrophic incidents such as floods and droughts are happening on a greater scale, but these impact specific industries adversely. Agri-business, energy and renewable industries have accelerated awareness and made this a board-level priority. Other industries are looking harder at impacts from climate change.
The Risky Business Project (link) will issue a report soon highlighting the risks and opportunities for all businesses. Businesses which incorporated these risks will be better positioned to survive. There may not be a happy path. Legislation is on the way regardless of who becomes Mayor, Governor, or President. A few areas are likely to be highlighted in the report:
- Establishing a social cost for carbon (link) – Someone will have to pay for pollution. Governments can no longer kick the tire down the road without political conflict. It’s only a matter of time.
- SEC enforcement needed for climate disclosure rules (link) – Similar to Sarbanes-Oxley, companies will have to disclose material financial impacts from climate change regulations. Again, it’s only a matter of time. This would impact all public companies.
- Role models: who are the socially-responsible companies prepared to address climate change?