Business Resilience in the Face of Environmental Uncertainty

By: Katie Brenneman

Most scientists agree that the global climate is changing at an unprecedented rate, bringing with it a host of environmental uncertainties that humanity must contend with.

For business leaders, uncertainties typically equate to risks that must be mitigated. Finding ways to incorporate greater resilience into the company in the face of environmental uncertainties may be one of the greatest challenges leaders must address in the modern era. 

Fortunately, there are numerous approaches and differing paths to creating resilience. For some, it might mean investing in new and improved green technologies; for others, the process might involve more direct, hands-on changes to the company model.

The key is to build a resilient company that can quickly adapt to the many changes heading our way. Those who can get ahead of the curve will most likely see major success.  

A Growing Threat

The initial connection between business continuity and climate change may not be immediately obvious, but the two are deeply intertwined. Factors that can be influenced by climate take multiple top spots of the ‘top disruption’ rankings. Likewise, climate ranked is the greatest threat for up to 58% of surveyed emergency risk managers. Many of the biggest concerns arise from climate change’s impact on weather patterns and the increase in severe weather. 

Aside from the incredible economic damage severe storms can cause (topping $340 billion in 2021 and increasing annually), longer-term issues can also arise for businesses. For instance, more severe storms and weather patterns have caused insurance rates to increase drastically in areas of the country that are prone to disasters such as hurricanes, flooding, or wildfires.

These cost increases can significantly impact your bottom line and make remaining open in certain locations untenable. 

Additionally, many businesses may be putting themselves at risk as they try to adapt. New, sustainability-minded policies and infrastructure upgrades can be expensive and take a lot of foresight to implement successfully. Further, investments in new technologies can be risky because they may not always pan out or could be outpaced and rendered useless quickly.

That doesn’t mean businesses shouldn’t take steps to adapt, but it does mean they should do so cautiously. 

Steps in the Right Direction

As previously mentioned, there are thousands of ways that business leaders and their companies can work to adapt and become more resilient to climate change. One example is through infrastructure and building design. New builds today can be designed with much more environmentally friendly materials and conservation strategies. Rainwater catchments or green roofs can play a major role in conserving resources and cooling down urban spaces. 

Business leaders can also choose to make their supply chains more resilient to climate. This might mean choosing vendors taking steps to become more environmentally friendly. It could also mean investing in new technologies such as artificial intelligence within the supply chain systems. Such technologies could help reduce shipment emissions, better track supplies reduce duplicate orders, and identify other weaknesses in the system. 

Other environmentally oriented goals may be more nebulous but can still profoundly impact when added up. They could be small things such as rewarding employees for becoming more environmentally friendly (think riding bikes to work or participating in an office recycling program).

These goals could also involve investments that make the community stronger and more resilient to climate change such as the company contributing to a community garden project to encourage local food production or coastal mangrove plantings to protect against storm surges. 

Tracking Progress

All of these small steps in the right direction can add up for businesses over time. Using technology to track and manage your company’s environmental successes is a great way to continue pushing the envelope and to communicate with the public all of the great steps you are taking.

This communication can be a smart business strategy, as a large portion of the global population regularly indicates in surveys that they are willing to spend more on products produced by environmentally friendly companies. 

AI-driven environmental, social, and governance (ESG) reporting can help with this tracking. It works by monitoring the steps that businesses are taking to become more ESG-responsible over time and can be used to identify where additional improvements can be made. Leaders may also use integrated analysis platforms to take data from multiple inputs and help strategize new environmental resilience initiatives.  

Becoming more resilient to environmental changes and uncertainties is no easy task, and there is no quick way. However, there are hundreds of different strategies for taking steps in the right direction and working to prepare your company for whatever this crazy world throws at it. After all, doing nothing is no longer an option. 

____________________________________________

Katie Brenneman is a passionate writer specializing in business management, tech innovations, education, and sustainability-related content.