Key to Business Survival: Climate Risk Planning
Climate risk planning has evolved from a niche concern - to a business imperative. As environmental changes accelerate globally, organizations here and around the globe face unprecedented operational risks largely absent just a few years ago.
Take note: This applies to all industries, including the professional cleaning industry. We should always view jansan products and services as essential, especially during and after an environmental emergency. Doing so helps protect our companies and the businesses and organizations we serve.
Understanding Climate Risk
The first step in understanding climate risk is to define it.
Climate risk refers to the potential negative impacts that changes in our climate can have on an organization's operations, finances, profits, reputation, and long-term viability.
These risks fall into two main categories:
1. Physical risks: Direct impacts from climate-related events such as extreme weather, rising sea levels, drought, wildfire, and changing temperature patterns.
2. Transition risks: Challenges arising from the global shift toward a lower-carbon economy by countries globally.
Why Climate Risk Planning Matters
Among the key reasons why climate risk planning is so imperative for all businesses and organizations are the following:
Business Continuity
Climate events can severely disrupt business operations through facility damage, supply chain interruptions, and workforce displacement. The recent fires in Southern California make this all very tangible.
Our goal is not to eliminate all risks. That is not possible. However, with climate risk planning, we certainly can mitigate risk, often significantly.
Financial Protection
Climate risks carry significant financial implications, from direct damage costs to indirect losses from business interruption. Further, we can no longer expect insurance companies to bail us out if damage occurs due to climatic events. However, once again, climate planning can help minimize these losses.
Regulatory Compliance
No matter the changes happening in our country, many governments worldwide are implementing and accelerating climate-related disclosure requirements and regulations.
If marketing products or services globally, organizations without robust climate risk planning strategies may face penalties and restrictions or find markets closed to them worldwide.
Competitive Advantage
Organizations with effective climate risk strategies can gain market share globally, attract investment and new customers, enhance brand value, and identify and take advantage of new business opportunities.
Survival
Ultimately, climate risk planning is all about an organization's ability to survive. We are living in a new world today. The days of once-in-a-lifetime floods and fires are now happening every few years. And as they happen, more companies and organizations are being so impacted they are unable to survive.
We know climate planning cannot eliminate all risks. We mentioned this earlier. But it does mitigate risks. It provides us with a "Plan B" in worst-case scenarios. It helps organizations plan ahead to weather situations beyond their control. Further, it helps protect our businesses, our people, and our communities.
-Steve