Here’s How Climate Change Crisis Could Impact Business Operations And Policies In 2022
The climate change crisis, which continues to worsen, is expected to have a greater impact on the operations and policies of companies and organizations this year. Here’s how experts and observers think that will happen.
More Pressure To Decarbonize Operations
Pamela Chasek is a political science professor at Manhattan College where she chairs the political science department. She said that, “In 2022, there will be considerable pressure on both governments and the private sector to continue efforts to decarbonize operations, while making the necessary efforts to adapt their operations to an ever-warming planet.
“Governments cannot combat climate change and limit global warming to 1.5°C without the private sector playing its part. There will definitely be increased pressure on business and corporations in 2022,” she said.
Jeff Perlman is the founder and CEO of Bright Power, which provides energy and management services. He said that, “With buildings contributing to nearly 40% of the global carbon emissions, more businesses will be held accountable for their physical spaces' carbon footprint.
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“They will either do this out of a desire to lower their negative impact on the environment, to appeal to the increasing number of climate-conscious consumers, or to lower their energy costs,” he said.
Greater Reliance On Technology
Pearlman said, “To achieve that, business owners will look to technology— including real-time energy management to actively manage and monitor energy usage, clean on-site generation such as solar photovoltaics, heat pumps for water and space heating without fossil fuels—to mitigate negative environmental impacts.”
Regulatory Carrots And Sticks
“If they do not take action, regulations at the local, state and federal level may force their hand. Lawmakers will employ both carrots and sticks to reduce energy consumption and carbon emissions, making it financially harmful not to take action—such as with the proliferation of building performance standards in cities including New York, Boston and Washington, D.C.,” he concluded.
Abhilasha Purwar is CEO and founder of Blue Sky Analytics and part of Al Gore's Climate TRACE initiative. She predicted that 2022 will be “the year of radical transparency— the year that technology catches up to the promises.”
She noted that, “$17 billion of private capital poured into climate tech [in 2020]; in 2021 that number [was projected to surpass] $40 billion. This investment is igniting a revolution in data for mapping, monitoring and mitigating like never before.
“Now emissions can be tracked in real time with unprecedented accuracy; natural assets like forests can be monitored at a more granular level than ever [before]. Access to this data conveys major competitive advantage for businesses across the globe,” Purwar said.
Advice For Business Leaders
Adapt New Environmental Practices
Ran Korber, CEO and cofounder of BreezoMeter cautioned that, “Companies that don’t adopt new environmental practices—or consider climate change when developing their product roadmaps—will experience consumer drop-off and begin distancing themselves from these companies.”
He said business leaders need to begin taking these proactive and reactive measures:
Ditch Symbolic Gestures. “Consumers had first-hand exposure to the real-life impacts of climate change this year with record-breaking wildfires and the worst air pollution the U.S has ever seen. Now that they’re painfully aware that this is directly affecting them, they will no longer be amused by far-off climate initiatives with symbolic names like “Vision 2030”. Consumers need to see action now.
Don’t Hold Out For Sweeping Change. “Begin making small changes to your environmental practices, now. Companies should look at every aspect of their business, from production and supply chain to packaging and last mile delivery (depending on what the company does). For major companies, even small changes in these areas will have a significant impact on the environment that they can point to right now, while addressing longer-term practices over time.”
Introduce New Products And/Or Features That Reflect Consumer Health And Safety. “Consider how changing climate is affecting the air your customers or users are breathing, how increased fires are threatening their way of living, and how things like pollen and pollution are exposing them to health risks. Is your product able to protect them from these factors or make them aware of them in some way? Consider introducing features or products that can.”
Adapt Or Update Climate-Related Targets
Chasek of Manhattan College counseled that, "If they haven’t already, 2022 may be a good time for companies to adopt, or scale-up, their own climate-related targets, including achieving carbon neutrality, energy conservation, renewable energy use, and carbon offset programs.
“These internal policies can help prepare companies for future regulation by investing in emissions reductions now. This also makes good business sense because not only can they save money, generally through energy and operational efficiencies, as well as reduced production costs, but setting climate-related targets can protect and enhance their reputation with customers and shareholders.”
Provide A Rational And Pragmatic Vision For Stakeholders
Andrew Poreda, an ESG research analyst at Sage Advisory Services, said, “The best action a CEO can take in 2022 is [to provide] stakeholders with a rational and pragmatic vision of how the company’s business model is factoring in the fight against climate change.
“With the current economic and political landscape within the United States, a cohesive strategy integrating climate change may not provide immediate benefits. However, companies need to play the long game. A good plan will not only provide benefits in the event of future regulatory or legislative changes but can also create value by increasing buy-in from key stakeholders. Many consumers and employees are deeply concerned about the environment, so having a vision that resonates will be a great differentiator.”