The Paris Agreement, emissions targets, renewables – massive climate change issues that are being addressed at a global level. But how can we crop these ‘big pictures’ to suit our smaller SME frames?
Recently I undertook an online course on Climate Change, which left me questioning how what is going on with our planet relates to how we go about running our businesses. Apart from going solar, going green, buying an electric car and recycling – how should we be adapting our business models for the impacts of climate change?
My ambitious objective, in 1200 words, is to translate the science into proactive, hands-on actions for you to adapt and ensure business viability into the future while capturing emerging opportunities. Not what you can do for climate change but how you need to change your business because of climate change.
When I started researching I found very little information for SMEs. Just as you need to adapt your plans, I have adapted mine and will attempt to simply create awareness and hopefully inspire you.
For input, I reached out to Professor Lesley Hughes, a Distinguished Professor of Biology and Pro Vice- Chancellor (Research Integrity and Development) at Macquarie University, former Federal Climate Change Commissioner, and currently a Councillor with the publicly funded Climate Council of Australia – just a few of her impressive credentials!
Reality not Risk Management
Much of the business-related information focuses on Top 100 and listed companies and talk primarily about ‘risk management’, driven by shareholders. I feel we should be talking ‘reality’ not ‘risk’ management and tackling both the direct and indirect impacts that require change in how we operate.
Professor Hughes emphasises that even if we cease fossil fuel use today, warming, and associated climatic changes, will continue for some decades because of the greenhouse gases already released to the atmosphere.
Critical Year 2030
The world has already warmed by about 1° C compared to pre-industrial times. The recently released report of the Intergovernmental Panel on Climate Change (IPCC) emphasised that global warming of at least 1.5° will almost certainly occur between 2030 and 2052, with a high probability of warming of 2° C or more causing serious, and possible irreversible damage across many sectors.
Just over 10 years away. Planning on building a business to hand over to your children or sell for a profit in what – 5, 10, 15 years? Time to review your business plans if you want that to be a reality.
Weather or Not
Probably one of the easiest issues for us to relate to is weather. Climate modelling reveals that extreme weather events will become more frequent and more intense. We regularly see how Sydney seems to shut down whenever there is a major storm, heatwave or other weather event with the flow-on effects of power outages on air-conditioning, machinery and elevators in high rise buildings and transport disruption. Cafes, dining and entertainment businesses get especially hard-hit in storms. People can’t get out for lunch and they rush home from work. Remember the Camden floods of a few years ago?
Prepare a storm plan. If staff can’t get to work – go remote, reach for the cloud and set up staff to work from home where possible. Consider facilities for essential staff to stay on site overnight. We get forecasts that these events are coming, so be smart.
If customers can’t get to you, set-up a delivery service. When your supplies are delayed by weather – there goes your production schedule. So place orders in advance.
Connecting The Supply Chain
Everything originates from something that occurs naturally. So how will what you make, sell, use be affected? Warming is already causing significant changes in ecological systems and these changes affect the production of resources.
Professor Hughes points out that our natural environment is our life support system
-ultimately, the air we breathe, the water we drink, and the food and fibre we use every day is affected by the health of our environment. As the impacts of climate change on species and ecosystems become more severe, risks of reliable and high quality supply chains increase.
We operate in a global economy, making supply chains more complex. Where do you source your components, products, raw materials and in turn where does that business source theirs?
“Different climate effects are being seen across different areas of the globe,” Professor Hughes explains. “Some areas are more prone to extreme weather events and some are already experiencing impacts on the supply chain from water scarcity and deforestation.”
Rising sea levels are a threat to entire countries. Bangladesh for example is particularly prone and they have become a significant player in garment manufacturing.
Smart businesses will be investigating their complete supply chain, right down to the smallest element at a global level, considering threats to supply, sourcing alternatives and having Plan B ready to go. Floods greatly affect supply chains – during the 2011 Brisbane floods, supermarkets came close to running out of everyday commodities.
Sustainability and Ethical Sourcing
Driven by consumers and emerging through the food industry, sustainability and ethical sourcing is now spreading across many other industries. Customers are more astute in supporting businesses that implement sustainability policies.
Another supply-related consideration is the carbon footprint of transport of our commodities popularly referred to as ‘food miles’ in relation to what we buy to eat, but also relevant as ‘component miles’. Greenhouse gases from transport is the second highest source of emissions in Australia so buying local can reduce your climate impact. Driven by customers, these business decisions are astute marketing as well as protecting our environment. “Many dining businesses are already reviewing their menus as the simple idea of meat-free Mondays is equivalent to taking millions of cars off the road in the amount of GHG, ie carbon, released into the atmosphere,” Professor Hughes points out.
Food supply in general is a major consideration and we’re already seeing climate change impacts on Australian food producers. How farmers are responding and ‘what’s on the menu in 2050’ are just some of the topics discussed at the 2019 World Science Festival.
Professor Hughes says the climatic changes in certain regions are already changing agricultural practices. “As traditionally colder regions, such as Russia, warm, they have the right conditions to grow new crops such as wheat,” Professor Hughes said. “While in the warmer regions, a 1-2 degree increase in global temperatures will negatively affect yields of important crops such as wheat, rice and maize.”
Not So Fantastic Plastic
It started with single-use plastic bags, straws, water bottles, single-use plastic cutlery and now plastic in many forms is becoming ‘material non gratis’. While you’re considering your own use of plastics – in manufacturing and packaging – consider the opportunities! Producing and supplying plastic alternatives and recycling waste into useable products could represent new opportunities.
Driven by the need to reduce emissions and power bills, the take-up in renewables , especially solar, is surging with local businesses enjoying unprecedented growth. The challenge for the rest of us is to look for other emerging opportunities to adapt, adjust and grow our businesses. I know little about engines, but surely the move to electric cars offers new opportunities for the motor vehicle sector – for example, training and upskilling to specialise in service and repair of this new technology. With rising petrol prices, contain your expenses by using teleconferencing and face time instead of driving to meetings.
If your business is seasonally-based, then you definitely need to be constantly reviewing your business plan. I’m writing this in the hottest late April in 160 years when I should be thinking of getting my skis tuned for the start of the ski season. Says a lot to me.
Retailers get hit particularly hard when the seasons seem to be out of whack but these changes can also affect recreational, tourism, heating and cooling and other businesses.
While we’re all working hard to arrest global warming with our own efforts and putting pressure on national decision-makers to do more, we can look at the opportunities for ourselves.
There is great potential in the construction industry to build and use our nfrastructure differently, being innovative in design and materials. Get into the nursery business and plant more trees.
If you operate in a service industry, equip yourself to advise other businesses on climate change reality management.
Ac t, Don’t Just Talk
Climate change is no longer a hypothetical future problem, it’s a reality. A reality on a global scale and an actuality for our personal and business lives. Things are changing
faster than most climate models would have predicted a decade ago, and we need to be aware, and adapting.
Professor Hughes says business should tap into the many good sources of up to date, accessible information such as the reports provided by the Climate Council of Australia.
Focus should be preparing for, not waiting for, major impacts while being a part of the solution.
I’ve definitely been too ambitious with this topic and will have to cover more in future issues. But I genuinely hope that I’ve motivated you into action and we invite you to share your experiences and ideas on our Facebook page so together we can inspire Macarthur to make a move on climate change.
For more inspiration www.climatechange.org.au