Effect of Climate Change on Business
Written by Zahid Rawat
Recognizing that climate change is real and then taking steps to improve it are two different things. Lots of companies tend to acknowledge the fact that climate change is real and the effects it has an environment is something which has to be given highest priority. But where they fail is that in the present stage acknowledging the fact alone would not help dealing with the task at hand, there are steps to be taken in the right direction.
The interview with Mark Carney, the Bank of England governor, outlined the seriousness of this issue. The Bank of England has said up to $20tn (£16tn) of assets could be wiped out if the climate emergency is not addressed effectively. In the interview, the governor said that it was possible that the global transition needed to tackle the climate crisis could result in an abrupt financial collapse. He said the longer action to reverse emissions was delayed, the more the risk of collapse would grow. He went ahead and made a bold statement that companies that don’t take into consideration greenhouse gas emissions will go bankrupt without questions.
Another important point that came across in the interview and should be considered is the impact that investors have and will have in determining how much a company complies with and tackles the challenges of climate change. If the investors are on the same track as what the Bank of England has projected, then they will start valuing the zero-emissions more. This would in turn impact how companies structure their operations and logistics process and consider the climate emergency equally to their other verticals of business.
The interview was a welcoming one since it is rare that someone from a Financial Industry comes out and points the adverse effect that the change in climate is going to have on Business. The link to article is https://www.theguardian.com/environment/2019/oct/13/firms-ignoring-climate-crisis-bankrupt-mark-carney-bank-england-governor