Impact of Climate Change on Businesses and Importance of Sustainability

This report discusses the impact of climate change on businesses, including increasing complexities in regulations and rising operational costs. It explains the concept of sustainability and carbon footprint and highlights steps that businesses can take to reduce their carbon footprint. The report emphasizes the importance of reducing carbon footprint and outlines examples of companies that have made their processes sustainable.

Individual Report

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................1

INTRODUCTION
Climate change means change in the patterns of climate at global or regional level.
Climate change is the root cause behind the occurrence of natural calamities such as droughts,
floods, tsunami, etc. Climate change results in damaging homes, expensive insurance, in
appropriate conditions for outdoor working etc. In this report the explanation of problems that
are faced by the businesses across the world due to climate will be done with the help of certain
examples. The term environment sustainability is used to refer to the responsibility of the
individual or business to protect the natural resources and use it in a way that it last optimally
meeting the requirements of both present as well as the future. Further the steps that can be
incorporated by the businesses for reducing their carbon footprint will be discussed. The report
will outline the importance for businesses to maintain a sustainable approach in their operations.
MAIN BODY
The term climate is used for referring to the average weather of a particular region for a
long period of time. The types of climate namely are as: Tropical, dry, temperate, continental and
polar. Shifts in the patterns of temperatures and weather over a long period of time is referred to
as change in climate. There are major implications of change in the climate of the Earth over the
businesses and professionals involved in policy making. The impact of climate change is seen
over business in number of ways.
The first impact over the businesses is in the form of the capital expenditures that are to
be incurred over the systems inbuilt for emission control. A hefty amount of money is incurred
by some companies on the upgradation of the facilities that cause pollution and over the
deployment of systems that supports controlling of emissions (Rolnick and et.al, 2022). These
things are to be done by the businesses for complying to the regulations that have been laid down
for the greenhouse gas emissions. It becomes problematic for the businesses if they fail to meet
such regulations. Compiling to the regulations results in incurring capital expenditures whereas
not adhering to such regulations will cost in the form of legal proceedings and good market
reputation. The energy and utility companies are the ones that are most affected by such
regulations (Hofmann and Jaeger‐Erben, 2020). So the companies working in the energy industry
have to install the expensive equipment and systems for meeting the regulations.
Another issue that becomes problematic for the companies are the cap and trade policies.
These policies are formulated with the aim of lowering carbon emissions. For achieving this aim

a limit is set for the companies, regarding the extent to which the company can emit pollution.
The companies as per the policy are allowed to sell the allowance that remains unused by them
to the companies in need (Hickmann and et.al., 2021). The world’s initial and largest cap and
trade policy program is of the state of California, it has mixed results. The program of California
faces back slash for creation of more pollution levels by permitting the companies that are richest
and largest to purchase the allowances from other companies.
The problem for the businesses includes higher prices for the goods or services.
Companies belonging to energy industry are affected directly by the regulations (Rosenbloom
and et.al., 2020). These in turn affects the other companies that are from other industries as well.
The amount direct impacting companies pay in order to adhere to the regulations gets onto the
services or products they offer. Their products are highly used by the other companies and hence
these companies have to pay higher prices for such utilities and transportation (Kelly, Onat and
Tatari, 2019). The companies that are affected by the regulations in this way further charge
higher prices to their customers.
Carbon footprint is the amount of CO2 that the companies release by their activities into
the environment (Jay and et.al., 2019). Sustainability is a term given for making the processes
such a way that the carbon footprint decreases to minimum levels. It is beneficial for the
companies to reduce their carbon footprint. There are various ways through which this can be
achieved by the companies. Firstly the companies can choose sustainable suppliers (Manzanedo
and Manning, 2020). A business aiming to makes its processes sustainable in order of protect the
environment and purchasing materials from suppliers that are not sustainable in their businesses
means that the business is funding such suppliers to continue the unsustainable process in its
operations.thus with the step to choose from the sustainable supplier the company can be few
steps ahead towards protecting the earth (Trovato, Nocera and Giuffrida, 2020).
Some other ways to reduce carbon footprint are recycling the unused resources, using of
resources that are recycled in place of buying new resources, opting for online platforms for the
meetings and events purposes and making investments in green energy (Olatunji and et.al.,
2019). This benefits the businesses as their operating costs reduce through efficient processes.
The major companies making their processes sustainable and setting examples for others are
Ford Motor Company, Disney, Fisher Investments, Hewlett Packard, Johnson And Johnson,

Nike, ebay Eco Initiatives, Starbucks Stores And Google (9 Companies with Great
Environmental Initiatives, 2022).
CONCLUSION
Based on the above report it has been cleared that climate changes effects the companies
largely. There are various problems that are faced by business all over the world such as
increasing complexities in regulations and increasing operations cost. The report has discussed in
meaning of sustainability and carbon footprint. Sustainability is the usage of natural resources in
a rational manner keeping in mind future needs and the cost that comes to environment form the
extraction of such resources. Carbon footprint of a business entity is the released amount of
carbon dioxide by it in the atmosphere. The report has highlighted some steps that will help
businesses aiming to reduce their carbon footprint. Vitality for reducing carbon foot print has
been outlined.

REFERENCES
Books and Journals
Hickmann, T. and et.al., 2021. The United Nations Framework Convention on Climate Change
Secretariat as an orchestrator in global climate policymaking. International Review of
Administrative Sciences. 87(1). pp.21-38.
Hofmann, F. and Jaeger‐Erben, M., 2020. Organizational transition management of circular
business model innovations. Business strategy and the environment. 29(6). pp.2770-
2788.
Jay, J. A. and et.al., 2019. Reduction of the carbon footprint of college freshman diets after a
food-based environmental science course. Climatic Change. 154(3). pp.547-564.
Kelly, C., Onat, N. C. and Tatari, O., 2019. Water and carbon footprint reduction potential of
renewable energy in the United States: A policy analysis using system dynamics. Journal
of Cleaner Production. 228. pp.910-926.
Manzanedo, R. D. and Manning, P., 2020. COVID-19: Lessons for the climate change
emergency. Science of the Total Environment. 742. p.140563.
Olatunji, O. O. and et.al., 2019. Drivers and barriers to competitive carbon footprint reduction in
manufacturing supply chain: a brief review. Procedia Manufacturing. 35. pp.992-1000.
Rolnick, D.and et.al, 2022. Tackling climate change with machine learning. ACM Computing
Surveys (CSUR). 55(2). pp.1-96.
Rosenbloom, D. and et.al., 2020. Opinion: Why carbon pricing is not sufficient to mitigate
climate change—and how “sustainability transition policy” can help. Proceedings of the
National Academy of Sciences 117(16). pp.8664-8668.
Trovato, M. R., Nocera, F. and Giuffrida, S., 2020. Life-cycle assessment and monetary
measurements for the carbon footprint reduction of public
buildings. Sustainability. 12(8). p.3460.
Online
9 Companies with Great Environmental Initiatives. 2022. [Online]. Available through:
<https://www.smartcitiesdive.com/ex/sustainablecitiescollective/9-companies-great-
environmental-initiatives/1193165/>
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