How Canadian Companies Should Handle Climate Change
After the abrupt decision made by United States President Donald Trump to pull out of the Paris Climate Agreement, business leaders in Canada quickly turned their attention towards the issue of climate risk. Business management consulting professionals believe that climate issues cannot be escaped by Trump or by anyone else; in fact, future sales growth projections and decisions related to logistics should be approached with climate in mind.
According to Laura Zizzo, a business management and implementation consultant from Toronto, the measures to combat certain effects of climate change are already in motion and cannot be turned back. In a recent article published by The Globe and Mail, Zizzo described how major investment firms such as BlackRock and the Bank of England insist on conducting utilization analysis studies as they relate to climate issues before they take on new investments.
Business Disruption Due to Climate
In 2017, the Canadian Securities Administrators Office started to conduct workload analysis and review of disclosures so that they can start to understand how climate change may affect their operations. One of the first issues noticed in these reviews is that insurance costs are rising sharply due to the greater frequency and intensity of storms.
For Canadian companies that rely on the extraction of fossil fuels in Alberta, for example, business performance improvement may hinge upon companies adopting measures similar to what some OPEC countries are currently doing, which is to seek revenue sources other than oil production. The growth of electric cars and the switch towards solar and wind power generation will one day affect the Canadian oil market; in light of this situation, investors do want to hear about companies that are not diversifying their products and services.
Are Canadian Businesses Ready for Climate Change?
According to the Bank of Canada and the Canadian Chamber of Commerce, the Great White North is not quite ready for climate change in terms of business. A major issue is that quality management reviews at most companies fail to take into consideration climate risk factors even when they are very obvious.
Insurance premiums and the costs to clean up pollution are just the tip of the iceberg, so to speak. What Canadian business owners need to think about is compliance. Sustainability measures are being implemented at the federal and provincial levels, and they should not be thought of as being negotiable.
In the end, Canadian companies that choose to ignore how climate change will impact their operations could face a rude awakening over the next few years. Listening to business consultants who specialize in climate issues now will pay off in the long run; the key is to not follow Trump down the rabbit hole of denial. A lot of the resources at Carpedia International Ltd. could be useful if you want more information.