Author: Bob Press (TAP Financial Partners)
In a recent survey from Deloitte Global, 80% business executives indicated they are concerned about climate change’s effects on their business. Additionally, almost 30% of respondents said they were already feeling the impact of climate change within their organization.
According to the survey, companies in the public sector, consumer, life sciences, and healthcare industries are feeling the most pressure from climate change. However, there’s no question that all companies should be prepared for whatever the future holds as the earth’s temperature continues to rise.
Five Areas of Concern
The odds that some climate-related disaster (hurricane, tornado, wildfire, etc.) will occur have increased. The impact could range from needing to close for a day because of a power outage to facing severe facility damage that takes several months to recover from. Either way, any workforce disruption can have long-lasting effects, especially if employees experience damage to their homes or incur personal injuries because of the weather event.
- Supply chain
As if COVID-19 wasn’t already playing havoc with the global supply chain, more than 25% of executives participating in the Deloitte survey claimed to be currently facing an issue of resource scarcity because of climate change. Small businesses should expect to face supply chain challenges that result whether the extreme weather takes place in their own backyard or across the world. As a recent example, China’s 2021 drought combined with their reliance on hydroelectric power has led to substantially higher power costs that have reduced power heavy aluminum production, which presents a real issue for manufacturers in particular industries such as aerospace as China is the largest exporter of aluminum in the world.
As the likelihood of experiencing a severe weather event increases, so do insurance costs, with many types of natural disasters not covered by traditional property insurance. One example is that companies located in or near flood zones likely need to get a separate flood insurance policy to ensure they are covered in the event of a hurricane or other major storm.
The earth’s changing climate will result in some resources becoming scarcer and their cost increasing. Water, electricity, and food are examples of this. These rising costs can impact companies in all industries, although companies in both the energy industry and a wide ranging number of consumer industries from food growers and processors to cannabis producers are particularly concerned about them.
Research has found a correlation between extreme weather events and increased rates of anxiety, depression, and aggressive behavior, with any of these affecting employee productivity and output.
Now is the Time to Prepare
While there is little any small business owner can do individually to prevent climate change, they can recognize the challenges the situation will cause and take steps to prepare for them now.
This can include accessing support to insulate your business against negative consequences. Contact us today to learn more about our fundraising, financial and consulting services, available at every stage of the small business development process.