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Business Strategies to Address Climate Change

The world's most successful businesses are taking measures both inside and outside their walls to reduce the impact of climate change on their operations and boost their ability to adapt to consequences.

By Mila JonesPublished about a year ago 4 min read
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The world's most successful businesses are taking measures both inside and outside their walls to reduce the impact of climate change on their operations and boost their ability to adapt to consequences. Companies also show dedication by working with other businesses to find solutions and endorse the law. For instance, Google announced its commitment to help mitigate damages caused by climatic change.

According to C2ES, an environmental nonprofit organization in Arlington, firms are after reducing their carbon footprint. It also noted that companies are pursuing a deeper understanding of the opportunities and risks of climate change. They involve suppliers, clients, stakeholders, and policymakers and openly disclose statistics on energy use and emissions, hazards, and management techniques. Reduce your carbon footprint to enhance this mission.

Plans for Climate Action

Creating corporate-wide and departmental climate action plans is frequently the first step for businesses. The aspects of a climate action plan depend on a company's nature and goals. However, every organization must make some choices. For instance, if the plan is "top-down" or "bottom-up", how many targets to set, what kind, and how to combine them with other environmental management activities.

How much the plan uses market mechanisms like internal carbon pricing and external carbon offsets, and how does it use the money for R&D and other methods to promote innovation? Once goals are set, they can drive creativity within the firm, resulting in internal projects and products that help achieve goals. The statistics on pollutants or energy use can drive financial improvements.

Targets and Goals

Businesses are adopting climate-related goals. The ultimate goal of a company depends on its products, manufacturing methods, regulatory environment, and business strategies. Some goals focus on lowering greenhouse gases while others reduce energy use. Some act as absolute restrictions, while others are based on revenue and production levels. The set goals and targets can also guide supply chain purchases and product usage.

A reduction in greenhouse gas emissions goal “in line with climate science” has been set by over 300 companies. More than 100 have established objectives to run entirely on renewable energy. Microsoft and other businesses are setting operational carbon neutrality objectives. Some businesses invest in carbon offsets from initiatives like decreased deforestation to help them reach their emission targets more economically.

Pricing of Internal Carbon

One business approach that is gaining traction among significant corporations is known as internal carbon pricing. It involves assigning a price to the carbon emissions that are associated with the company. Since 2015, the number of companies worldwide that have implemented or are preparing to implement an internal carbon pricing system has increased by 23 per cent, reaching more than 1,200.

Companies implementing corporate carbon pricing give the CO2 emissions related to a particular business activity a monetary value. By factoring in this pricing signal when determining where to put their money, the company will be nudged in the direction of shifting away from emissions-intensive activities and products and toward alternatives that produce less carbon and are more robust to climate change.

Climate change and innovative finance

Energy efficiency improvements have become crucial to the business climate change strategy. With the capacity to conserve over $2 trillion globally by 2030, companies participating in the global EP 100 project promise to double their energy efficiency. Leading companies save billions of dollars and avoid tons of greenhouse gas emissions. Supply chains, internal operations, and cross-cutting problems are all efficiency initiatives.

Energy Savings

Energy efficiency improvements have become crucial to the business climate change strategy. With the capacity to conserve over $2 trillion globally by 2030, companies taking part in the global EP 100 project promise to double their energy efficiency. Leading companies report saving billions of dollars and avoiding millions of tons of greenhouse gas emissions when they pay more attention to energy efficiency.

Importance of energy efficiency

Businesses that adopt reduction methods and carbon footprinting quickly begin to view their energy usage in a completely new way. Energy usage often makes up the vast majority of an organization's immediately detectable emissions impact regarding carbon footprint calculations. Currently, it is not only their cost but also a considerable carbon effect. Energy efficiency becomes a sustainability need from this perspective.

The world is facing the challenge of climate change. The recent UNFCCC (United Nations Framework Convention on Climate Change) report has raised the issue, and it's expected that all countries will be forced to take immediate action to reduce their greenhouse gas emissions. The government is implementing many initiatives to reduce emissions quickly, including National Solar Initiative and an Energy Efficiency Coalition.

What's next for climate change

The proportion of renewable energy sources is on the rise. But, it's still not enough to meet our needs, which can be attributed to a lack of political will and the high cost of energy production. Most nations are trying to use renewable energy sources to reduce the harm to our environment, especially greenhouse gases. The above strategies also come in handy.

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About the Creator

Mila Jones

Mila Jones is a Senior Business Consultant, with rich experience in the domains of technology consulting and strategy, she works with both established technology brands and market entrants to offer research inputs.

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