The events of the past week prove that the climate can play tricks on us. After a warm and very dry summer, the arrival of the first rain immediately brought flooding, the effects of which we have yet to learn. Climate change is a global problem that affects various aspects of life, and one of them is business. Entrepreneurs, regardless of industry, must prepare for the challenges that ongoing global warming brings. These changes can directly affect operations, costs, as well as company profits. Below I outline some of the key impacts of climate change and practical ways to protect against them.
Floods
They are the first to be highlighted due to recent events. Climate change is leading to an increase in rainfall intensity, which can cause flooding. Even in regions that were previously not at risk, flooding can become a real problem for businesses, because even if there is no river or other body of water in the area, a rainfall of 50l/m2 per day can cause catastrophic damage.
How to protect yourself?
- Invest in flood risk insurance.
- Conduct a risk assessment of your location – especially if your business operates in a flood-prone region.
- Secure your infrastructure: install flood barriers and adapt buildings to extreme weather conditions.
- Rethink the location of new facilities and choose areas that have a lower risk of flooding.
Extreme heat
Rising global temperatures mean the heat will be longer and more intense. This can affect workers, machine productivity, and higher air conditioning and building cooling costs. Hot weather also means drought, causing disruptions to power plants and electricity supplies.
How to protect yourself?
- Invest in modern air conditioning systems and energy-efficient cooling technologies.
- Provide employees with appropriate working conditions, including adjusted breaks if work is done in hot conditions.
- Monitor energy consumption and invest in alternative energy sources, such as solar panels, to reduce air conditioning costs.
Disrupt supply chains
Climate change can cause disruptions in supply chains, especially in regions affected by drought, floods or hurricanes. This is especially true for the food industry, for which a poor harvest can mean problems with continued operations or reduced profitability. Problems in one country can have a direct impact on raw material availability and delivery delays.
How to protect yourself?
- Diversify suppliers – work with several sources instead of relying on one.
- Build stocks of key materials to reduce the risk of production interruptions.
- Track global climate risks to respond in a timely manner to changing conditions.
Increased energy costs
Rising energy costs are a result of the need to adapt energy infrastructure to new weather conditions. Prices could rise sharply, affecting the day-to-day operations of businesses, especially those that consume a lot of energy. Added to this is the cost of CO2 emissions, which, despite stable prices so far, could become significantly more expensive under the impact of increased demand.
How to protect yourself?
- Invest in energy-saving technologies and alternative sources such as solar or wind power.
- Optimize energy consumption by upgrading buildings and machinery.
- Consider long-term contracts with energy suppliers to gain price stability.
Increasing regulatory requirements
In response to climate change, governments are introducing increasingly stringent regulations on carbon emissions, waste management and sustainability. Failure to meet these requirements can result in penalties, as well as loss of customer confidence. Banks are increasingly reluctant to finance companies and technologies that are considered cost-effective, and energy companies must comply with increasingly stringent taxonomies.
How do you protect yourself?
- Keep track of changes in environmental regulations and adapt your business to meet new requirements.
- Invest in sustainable technologies and business practices that reduce your environmental impact.
- Invest in training for employees so they are aware of new regulations and implement them in their daily work.
Summary
Climate change is a challenge that affects every business – regardless of the scale of operations or industry. Floods, extreme temperatures, supply chain disruptions, rising energy costs, raw material losses or tighter regulations are just some of the risks. It is important for companies to take preventive measures now, investing in technology, insurance and education to mitigate risks and prepare for the changes ahead. Adapting to new conditions can become a key element of competitive advantage in a changing climate.
