How Companies Can Plan to Mitigate Climate Risk

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Climate change is considered the greatest single threat to humankind, and while individuals are working to minimize their carbon footprints, the overwhelming majority of climate change is caused by businesses.

Through emissions, resource consumption, and waste, companies are responsible for over 80% of climate change. As the threats of climate change rapidly increase, companies in every sector and industry must take responsibility for their sustainability efforts and work to mitigate their climate contributions, regardless of their size or business type.

To avoid the full effects of climate change and reach carbon neutrality by 2050, businesses will need to reduce their emissions by 50% each decade. Doing so will not only benefit the environment but will help companies adapt to changing industry standards as sustainability becomes the norm.

How Companies Can Plan to Mitigate Climate Risk

Reducing Direct Emissions

The first step to mitigating your company’s climate contribution is being aware of your overall carbon footprint. Companies should map out their emissions and identify all major and minor contributions before developing a climate action plan. This will help in setting targets and keeping up with reduction commitments.

Once a plan has been formulated, companies should seek to reduce the emissions of the primary business operations. This can come in the form of:

  • Limiting vehicle emissions by switching to electric or hybrid vehicles
  • Reducing cooling, heating, and electricity
  • Installing solar panels and other sources of renewable energy
  • Minimizing employee travel

Many companies that have already improved their sustainability efforts have reported higher revenue and lower business costs as a direct result of their efforts.

Reducing Indirect Emissions

As businesses work to reach carbon neutrality, they must also take into consideration the emissions that occur outside company walls. Emissions from value chains, known as Scope 3 Emissions, are where the majority of a business’s climate contribution comes from. This includes its supply chains and the goods and services it provides.

Supply chains play one of the biggest roles in businesses’ contributions to climate change. From resource harvesting to manufacturing to shipping, sustainability can be very difficult to track and even more so to mitigate throughout a supply chain. Reports indicate that 1 in 5 businesses have no data on their suppliers’ suppliers, and even fewer businesses are able to track their supply chain in its entirety.

By working towards full supply chain transparency, companies can claim more agency over their products and services, and by extension, their contributions to climate change. Improving quality management systems in supply chains not only helps companies improve ethical and sustainability practices, but can also improve quality at every level of business.

Mitigating the climate risk of a company’s sold product or services can be a more difficult task than managing its supply chain. As with managing direct costs, companies should map the total climate contribution of every product and service, and identify alterations that push them closer to sustainability. This can include:

  • Producing goods with sustainable materials
  • Limiting plastic packaging and single-use plastics
  • Minimizing travel and shipping whenever possible
  • Minimizing waste
  • Maximizing use of recycled materials

Mitigating climate risk can be a massive and overwhelming task. However, the necessity of sustainability supersedes its inconvenience. As companies work to halve their carbon emissions, they will need to work outside the immediate walls of their business and limit their carbon emissions throughout their entire value chains. In doing so they can improve both their sustainability practices and their business.

The post How Companies Can Plan to Mitigate Climate Risk first appeared on U.S. Green Chamber of Commerce.