Don’t ignore the business risks of climate change

By Suzanne Orme June 30, 2024

Climate change is here today

It’s not just an environmental issue and something that will affect us only in the future. The climate crisis is already causing profound damage across the planet with just 1.2C of average global heating over the last four years. Impacts of climate shocks in one place are cascading around the world through food price spikes, broken supply chains and extreme weather events.

Impacts will continue to worsen

According to the Intergovernmental Panel on Climate Change (IPPC) impacts will continue to worsen. 77% of climate scientists believe global temperatures will reach at least 2.5C above pre-industrial levels by 2100.  The scale of future impacts will depend on what happens – or not – in politics, finance, technology, business and civil society. impacts will vary according to how the Earth’s climate and ecosystems respond.

The risks to your business are escalating

Risk is defined by the International Organisation for Standardardisation (ISO) as the effect of uncertainty. And nothing is more uncertain than the impacts of climate change on your business and its stakeholders. To help you, ISO created Net Zero Guidelines in 2022. Additionally, I’ve created a list of common risks and opportunities. You can use this as a prompt for discussions to help decide whether each issue is a strength, weakness, opportunity or threat for your organisation.

Common risks and opportunities
	Product/supply chain Ability to maintain business continuity in the event of extreme weather events Amount of flexibility in sourcing to respond to supply chain shocks Level of customer satisfaction with information given to them on climate change commitments and carbon emissions data Likelihood of attracting customers seeking products and services with a lower carbon footprint
	Economic / Financial Effect of escalating energy prices vs. large reductions in the cost of solar and battery storage Ability to absorb the high up-front cost of new equipment and technology to obtain long term savings from energy efficiency and clean energy sources Likelihood of attracting private investment for products and services with fewer climate impacts
	Political / Regulatory Degree of compliance with applicable obligations such as the National Greenhouse and Energy Reporting Act (NGER) and Safeguard Mechanism Eligibility to secure government funding in the next decade such as the $22.7 billion Future Made in Australia supporting the transition to net zero Ability to engage in the policy development process and regulatory debate through submissions to government discussion papers
	Social/ community Degree of commitment of employees and contractors to climate-related policy commitments and objectives Effectiveness of engagement, consultation and participation of internal and external stakeholders regarding climate change

There is mounting pressure for businesses to do more

In February 2024 ISO published amendments to the management systems standards . These set out the expectation of businesses that are certified to ISO9001, 45001; 14001, 22001, 27001 and  many more. My list of risks and opportunities is designed to help your business to demonstrate the processes needed.

There is a growing expectation for reliable and transparent reporting of climate change information. Accordingly, it’s essential to follow the best practice guidance in the ISO14064 suite of greenhouse gas standards.  You can choose to have your greenhouse data and information independently verified.