How Can Businesses Help Preserve Life on Earth From The Effects of Climate Change?

ClimateAngels | Sep 09, 2023

“Explore this blog post to get started in exploring how people close to businesses and companies help preserve all life on the planet Earth. Discover how companies can adopt innovative ideas and practical solutions to mitigate the cause and effects of climate change.”

group-men-earth-globe-in-behind-and.jpg<br />
September 9, 2023

Amid climate challenges, businesses strive to preserve life on Earth and challenge the link between gross world product (GWP) and carbon emissions.

This flawed logic may lead some to assume that the climate damage they do is a necessary sacrifice to keep the global economy running.

However, the perspective is now changing; this out-of-date thinking is now being replaced by the ones who lean towards nurturing the life on the only planet humans have so far – the Earth.

Not only do businesses can make their operations more sustainable, but many are already doing so. They are reaping financial returns, attracting investment, and responding to ever-growing consumer demand for environmentally responsible products and services.

What is the Impact of Businesses on Climate?

Businesses undeniably have a significant impact on the changing climate of Earth. Evidence across the globe unequivocally shows that businesses are intertwined with environmental challenges, making their engagement in sustainability a matter of global importance. The call for transparency, accountability, and a dedicated shift toward sustainability is clear and inescapable.

Thus, embracing these principles, companies around the world can become catalysts for positive change, fostering a greener, sustainable future for generations to come.

The connection between business activities and Earth’s climate change is being monitored and analysed by organizations such as the CDP (formerly, Carbon Disclosure Project).

The CDP is a global non-profit organization that encourages businesses to disclose their environmental impacts, particularly regarding emissions, and take action to reduce them.

The current data, however, paints a concerning picture. Of the businesses reporting to the CDP on their climate change, forests, and water security disclosures, only around 2% have received an ‘A’ grade for environmental transparency and performance (around 330 businesses out of 15,000).

Of nearly 15,000 companies scored, 330+ made it onto this year’s A List. These companies are leading the way in environmental transparency

Source: CDP – Number of companies leading in environmental transparency space.

That leaves a large majority either failing to report their emissions or, worse, contributing significantly to climate change.

The situation is further exacerbated by the fact that over 30,000 businesses, worth a combined 24.5 trillion USD, declined to respond to the CDP’s request for information. This group includes recognizable names like DTE Energy and Glencore, known for their substantial environmental impact.

On a positive note, 2022 saw a record-breaking number of businesses, over 18,700 representing over half of the global market capitalization, disclose their impacts through the CDP. This 42% increase from the previous year reflects an increasing demand for environmental transparency and accountability from consumers, employees, shareholders, and investors.

More than 18,700 companies disclosed their climate, forests and water security impacts through CDP in 2022

Source: CDP – Data shows, over 18,700 companies disclosed their climate impacts in 2022.

Yet, the broader issue persists. According to the Carbon Majors Report, just 100 businesses are responsible for 71% of global emissions since 1988:

100 COMPANIES ARE RESPONSIBLE FOR 71% OF GHG EMISSIONS

In Image: CDP – 100 businesses are responsible for 71% of global emissions since 1988

This stark statistic illustrates the immense influence that a small number of corporations wield over our environment. Their decisions and actions hold significant sway in the systemic changes needed to confront climate change.

Adding to this complexity, analysis warns of a financial risk tied to heavy investments in fossil fuels. An estimated $1 trillion in investments in coal, gas, and oil could become stranded assets, losing their value in light of increasing international commitments to reduce carbon emissions.

Over $1 trillion of oil & gas assets risk becoming stranded as a result of policy action on climate and the rise in alternative energy sources

Data Shows, more than $1 trillion of oil & gas assets risk becoming stranded.

Moreover, some businesses’ heavy investment in fossil fuels poses a financial risk as well. Carbon Tracker’s research indicates that $1 trillion invested in coal, gas, and oil projects over the next decade could lose value in the face of growing international commitments to reduce carbon emissions.

The overwhelming evidence demonstrates that businesses not only have an impact on the environment but that their actions (or lack thereof) are at the core of some of the most pressing environmental challenges today.

The data underscores the critical need for:

1. Transparency

2. Accountability, and

3. A committed shift toward sustainability

These are the basic principles for businesses to help mitigate their climate impact and foster a healthier planet for all.

Why Should Businesses Care About Their Impact on Earth?

Business leaders are often aware of the ethical imperatives to reduce their environmental impact, yet many fail to incorporate sustainability into their core business strategies. It is crucial for leaders to comprehend the strategic value that lies within business sustainability.

In a 2018 BSR/Globescan survey, a significant 75% of corporate sustainability professionals believed that business leaders have not sufficiently modified their business strategies to address climate change. This vast global issue profoundly influences consumer behaviour, financial flows, and the availability of materials:

Company Performance on Pre-Defined Leadership Attributes - The 2018 GlobeScan-SustainAbility Leaders Survey

In Image: The GlobeScan-SustainAbility Leaders Survey on Company Performance

Watch This Short Video: Global Environmental Impacts of Consumer Products

Global environmental impacts of consumption Source: JNCC

The survey reveals a clear acknowledgment of the ethical reasons to pursue sustainability, with business leaders ranking ethics as the foremost motivation. Yet, the data also uncovers a gap between intent and action: fewer than 33% of respondents confirmed that their businesses had integrated a sustainable strategy into their business planning.

Sustainability in business is not merely an altruistic endeavor. It’s a strategic move that aligns with market dynamics and stakeholder expectations. The survey’s North American and European respondents, 64% and 84% respectively, emphasized that sustainability needs to influence core business activities.

The compelling case for sustainability transcends ethical responsibility – it’s a vital component of strategic business planning that can lead to long-term profitability, resilience, and success.

Sustainability as a Business Strategy: The Opportunity of the Future

There is a growing recognition that environmental responsibility and economic growth can coexist. Businesses must take advantage of several key points in this regard:

1. Changing Assumptions: The assumption that environmental responsibility and economic growth are mutually exclusive is being debunked. There is a growing understanding that these two goals can be pursued simultaneously.

2. Opportunities in Sustainability: The sustainability space offers unique opportunities. As sustainability becomes more mainstream, there is the potential for disruption in existing methods and the creation of new avenues for innovation and growth.

3. Growing Market for Sustainability: The market for sustainable products and services is expanding rapidly, with new markets emerging regularly. This growth suggests that businesses have a chance to capitalize on these opportunities.

4. Preserving and Protecting Resources: Climate change actions encourage businesses to adopt models that not only preserve but also protect life and essential resources. In this context, a broader commitment to sustainability beyond profit, with a focus on protecting the environment and resources essential for life, can go a long way toward a sustainable future.

5. Ethical Imperative: The shift towards sustainability is not only good for business but also an ethical imperative for the future of the Earth.

In essence, there is a growing convergence between economic growth and environmental responsibility. Businesses can benefit hugely from embracing sustainability, as it not only makes financial sense but also represents an ethical imperative for the future of our planet.

However, it’s important to acknowledge that the real-world implementation of sustainable practices and the challenges businesses face in this endeavour may vary significantly.

Nonetheless, with dedication and innovation, businesses can navigate these challenges and contribute positively to a more sustainable future.