The lack of sustainability threats big companies: an increasingly real risk in a changing world
Updated: Sep 22, 2023
Companies have been more concerned with production than sustainability, and are now at risk of negative consequences due to climate change.
According to the new global risks report from the World Economic Forum, the most polluting companies are the ones that will be most affected by climate change in the long term. For years, they have prioritized production and economic benefits, without thinking about the effect their work could have on the environment.
Climate change will have a significant impact on the supply chain of large companies, either through the interruption of production due to extreme weather events or the scarcity of natural resources necessary for production. This can lead to a decrease in the quality of the product or a reduction in the quantity available for sale, which can negatively affect the profits of the companies.
Furthermore, as consumers are becoming increasingly aware of the environmental impact of the products and services they buy, companies that do not adapt to the growing demand for sustainable products and services will be affected by the loss of market share compared to their competitors.
As reported in the recent report by the World Economic Forum, those Businesses that have not taken steps to mitigate climate change and adapt to a changing world will also be at risk of rising costs associated with environmental regulation. As governments and regulators around the world increase demands to reduce greenhouse gas emissions and promote more sustainable practices, companies that fail to comply with these regulations may face significant financial penalties and fines.
The large companies have neglected the weather, and now it will represent a greater risk to both their profits and their production. If they had cared about caring for the nature that allows them to produce their products, now they would not be affected by a climate that is increasingly unpredictable and more harmful.
That is why today's pressures must represent a turning point for both companies and governments around the world, encouraging countries that import energy to invest in safer, cleaner and cheaper renewable energy sources. In some cases
However, geopolitical tensions and economic pressures have already limited progress in mitigating climate change, at least in the short term. For example, the European Union spent at least €50 billion on infrastructure expansion and new supplies of fossil fuels, and some countries restarted coal-fired power plants.
The experts already worn it, and it is that as floods, heat waves, droughts, and other extreme weather events become more severe and frequent, a broader set of populations will be affected. In parallel, a consolidation of public and private sector resources can establish emerging and pressing trade-offs between disaster recovery, loss and damage, adaptation, and mitigation.
In just two years, the global risks will be the cost of living crisis, natural disasters and extreme weather events, geoeconomics confrontation, erosion of social cohesion and social polarization, increased cybercrime and cyber insecurity and large-scale involuntary migration, among others. Furthermore, the global risks we will face in ten years will be lack of climate change mitigation, biodiversity loss and ecosystem collapse, natural resource crises, and large-scale environmental damage incidents.
It is crucial that companies take action to mitigate climate change and adapt to a changing world, as they risk facing rising costs associated with environmental regulation. Also, it is important that the world's governments encourage investment in safer, cleaner, and cheaper sources of renewable energy, and establish emerging and pressing trade-offs between disaster recovery, loss and damage, adaptation, and mitigation.