Over the last two weeks, the city of Chennai, India has experienced the worst rains and floods in a century. The
Climate change is here. It’s not a theoretical discussion, but an on-the-ground reality today. The good news is that the world is waking up and taking action. Representatives from 190 countries have just finished up a two-week mega-meeting in Paris to agree on aggressive reductions in carbon emissions (the gases that are changing the climate and weather). This enormous conclave attracted political and business leaders to support the negotiations. And over the last few weeks, dozens of CEOs from major multinationals have signed multiple statements
Three big megatrends are pushing companies to climb aboard the climate action train and look hard at their impacts on the world: 1. The changing climate and its economic costs; 2. Concern about availability of resources in a crowded world; and 3. The rise of transparency and expectations of openness about companies and their products.
These new expectations are coming in particular from the hyper-connected Millennial generation. Now the largest segment of the workforce, these younger citizens want the companies they work for and buy from to
Let’s consider the three megatrends. First a changing climate is not good for business. On the surface, the impacts of climate change might appear like something only governments and citizens should worry about. But consider what a changing climate actually means. After 150 years of pumping global warming gases into the atmosphere, we’re clearly experiencing a hotter world: last year the average temperature across the globe was the
In Chennai, companies are feeling the direct impacts and costs of more extreme weather. Many multinationals
Or think about the challenges of managing a global food company, for example, when permanently warmer growing regions become inhospitable to the crops that normally thrive there. The increase in droughts quickly becomes a core resource constraint, not enough water to grow food or not enough water to make your product if you’re, say, a giant beverage company.
Because of these pressures, companies like Coca-Cola, General Mills and Kellogg’s have set aggressive targets to reduce carbon not just in their own operations but
Adding to the pressure on business, all of their actions are taking place in a world that’s increasingly under a microscope. Technology-driven transparency is opening up everything a company does to the scrutiny of customers, communities, employees or any other stakeholders that care.
In the food industry, yet again, the pressure is rising. Consumers today want to know more about what’s in the things they eat and drink, creating what business is calling a
At one of the many business conferences running in conjunction with the official negotiations in Paris, Kellogg’s CEO John Bryant described why “addressing climate change is mission critical” for his company. He highlighted both the growing demand from consumers about how their food contributes to a sustainable world, and also the direct risk to “fragile supply chains” from weather shocks. Bryant basically described how the megatrends of climate, resources and transparency directly affect his company.
Clearly the risks to business are growing. That said, the real story on why society and companies are acting on climate change is much more positive. For business, there are multi-trillion-dollar markets in play – the world is starting to redesign transportation, energy, buildings, food, consumer products and finance to build a low-carbon society that works for all. In the end, a thriving world is a more profitable world.
And this is why, even with abundant evidence all around us, it doesn’t really matter if everyone “believes” in climate change. To support the climate discussions, former California Governor Arnold Schwarzenegger
Unfortunately, climate change is not going away anytime soon, but neither is the global push to do something about it. Companies are increasingly on board because they have no choice as they face the triple threats of climate, resources, and transparency. But they’re also shifting how they do business because, as the Governor points out, it’s just a smart choice.
We now have a unique opportunity to change how the world works and build more resilient companies and cities. This is the only path to a thriving world for what will be 9 or 10 billion people, so let’s get to work.
Andrew Winston is a globally recognized advisor, speaker, and writer on business strategy and mega-trends. He is the author of The Big Pivot and co-author of the international bestseller Green to Gold.
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