Harnessing Climate Change as a Catalyst for Business Growth
Solar panels above water. Image source: Pixabay
Written by Austin Page
Addressing climate change is an important feat for many businesses. Climate change is a growing problem with significant consequences, and businesses must learn how to properly approach the issue. Studies from Accenture and Boston Consulting group estimate that climate change has caused over $3.6 trillion in damages and it’s clear—especially with recent events like the tornado that touched down in Scotts Valley—that things are only going to escalate.
Understand Possible Business Risks of Climate Change
Climate change has posed different kinds of challenges for businesses, and it would be risky not to at least understand them. For example, many industries are now suffering from climate-related disruptions, such as rising costs due to supply chain issues and loss of property and assets due to extreme weather events. Without action towards these disruptions, businesses will suffer regulatory fines and decreased customer satisfaction. Additionally, climate change is changing customer expectations more than ever. Since there is a rising concern about the effects of overconsumption, more customers are favoring eco-friendly, and sustainable products over traditional products.
How Climate Change Provides Opportunities for Business Growth
As industry trends are changing to address climate change issues, it presents various opportunities for business growth. Not only do these opportunities contribute to a more sustainable future, but they can also drive innovation and create new markets.
Sustainability Innovation
Adopting sustainable practices opens up several doors for sustainability. In Santa Cruz County and the Central Coast, many companies are leveraging climate-focused innovation to their advantage. Rather than seeing it as a hurdle, these companies have reframed their thinking and identified opportunities to come up with Earth friendly solutions. For instance, surfing brands in Santa Cruz are adopting eco-friendly products and practices, such as using reclaimed wood for surfboards or using recycled materials, to not only cater to environmentally conscious consumers but create high quality products. Sphera, formerly Supplyshift, was born out of the need for more transparent supply chains. Their team built a software network that allows companies to engage with their suppliers, understand who and where their suppliers are, and how much they're emitting.
With dedicated R&D staff, businesses can also optimize resource use in different sectors to make processes more efficient and further reduce their carbon footprint. R&D teams can play a significant role in mitigating the impact of climate change in your business in the long term by coming up with novel ways to address complex climate change challenges through dedicated research.
Competitive Advantage
Exploring new ways to be sustainable also provides a competitive advantage for brands and companies. Companies that commit to eco-friendly practices can differentiate themselves from others in the industry by emphasizing what they are doing to be more sustainable. Many companies have taken to sharing their values directly on their home page or having a seperate tab indicating the actions they have taken to be more green. Consumers will feel more aligned and more likely to purchase from brands that share the same values for sustainability than those who don’t explicitly mention them. Sustainability resonates with many consumers today, and brands that adopt these practices sooner rather than later will send potential customers a clear message of responsibility and forward-thinking
Unlocks New Markets
Sustainable ventures that address climate change issues help businesses unlock new markets. These new ideas can provide a way to tap into new audiences. Looking at possible ways to engage in renewable energy is a prime example of this. Renewable energy has significant potential for growth, especially in regions like Santa Cruz and the Central Coast. Along with existing options like solar and wind, Verdagy’s green hydrogen facility in Moss Landing could be another potential clean energy source and partner for businesses.
Climate-conscious products are also a great way to help the company stand out to partners and investors. It’s a strategic yet authentic way to build a brand reputation. It shows stakeholders that the brand is proactively taking steps to contribute to a brighter future and has a game plan that will hold steady in difficult times.
Creates a Circular Economy
Many businesses today follow a simple model: they take resources, make products, and then throw them away ("take-make-dispose"). While this has worked in the past, it's bad for the environment.
Climate change can actually push businesses to grow in a good way. They can become part of a circular economy where resources are reused, recycled, and repurposed instead of wasted. This is a smart business strategy that helps the environment and creates new income sources. Companies that join the circular economy are seen as leaders in sustainability.
One way to grow in a circular economy is to make products that last longer and are easy to recycle or reuse. Many products today are designed to break easily and become outdated quickly. But if companies make products that fit the circular model, they'll attract more customers who care about sustainability.
Drives Employee Engagement
Employees can often feel disengaged with their work, especially when they don’t feel fulfilled with what they do. Creating a sustainability-focused culture makes it easier for employees to feel purposeful in their work. It can be as simple as identifying ways to reduce single use plastics in the office like brewing coffee for everyone to enjoy, providing signage on how much waste was diverted or how much energy was saved, etc. As times change, more employees are also favoring companies that not only state their values but make it a priority. They want their efforts to contribute to something bigger than just financial gain. For example, giving your employees the option to pick up a sustainable volunteering project or opportunity such as participating in beach cleanups and making it a competition could help coworkers get to know one another better, increase morale, and help reduce waste along our coastlines. Allowing employees to work from home or remotely a few days out of the week can significantly reduce emissions and allow employees to still get work done. Organizations that integrate environmental and social responsibility into their core business operations can foster stronger, more motivated teams who feel their work has a meaningful impact.
The Bottom Line
Tackling climate change can be difficult and tricky, but it’s not impossible. Businesses and organizations that adopt sustainable practices to address climate change are more likely to tap into new markets and appeal to wider audiences. The right strategies will not only reduce environmental impact but also enhance a business’ profitability and reputation.