Good Question! Here at Third Thought we believe in science, and we believe there IS a climate crisis. We believe we need to get busier right now. The cost of action is less than the cost of inaction both in human and financial costs.
Should Climate Be a Key Uncertainty?
Most businesses around the world will acknowledge a climate crisis because their employees are experiencing the effects of the climate change. Employees have had to evacuate because of forest fires or perhaps they’ve lived with the smoke. In 2020 our hometown, Portland, Oregon, we had the worst air quality in the world for about a week and our son and family lived with us for that week due to evacuation orders.
Flooding in coastal communities and flood plains have also required evacuations. Extreme weather events have disrupted employee lives and organization operations. Frequent power outages due to overtaxed power grids mean we can’t work remotely. The global supply chain lives at the whimsy of the weather.
So, I don’t use the climate crisis as a Key Uncertainty. There’s nothing uncertain about the Climate Crisis. The big uncertainty is whether we’ll be able to address the damage in time or whether it will be too little too late.
I recommend you include climate in each scenario in different ways as a risk. To explore Scenarios focused solely on Climate Change I recommend visiting The Network for Greening the Financial System.
Many organizations are taking a larger part in climate action. Some are innovators to mitigate the effects. Others are responding to the values of their employees and customers and making changes. And many organizations are disinvesting in funds that harm the planet. Read more in Final Thoughts for inspiration from the stories about a few companies.
The Bigger Question
What can and should businesses be doing to interrupt climate change? The simple answer is, “As much as they possibly can.” We could meet the 2025 targets and the 2050 targets if every person, every business, every government had a greater sense of urgency. Hitting the 2025 targets is looking very iffy given that it’s already near the end of 2022. I go back to the fundamental question in scenario work:
Can we see the need to adapt in advance and prepare now for the Future?
Obviously, many can see the need to adapt or there wouldn’t be as many efforts happening right now. There is a lot of bleak news about the degradation of our oceans and our earth and our air. but it’s not hopeless.
There is a Lot to Notice
Younger employees are driving greater attention to ESG (Equity, Sustainability, Governing). Investors, large and small are changing where they put their money. The fossil fuel Divestment Movement hit 40 trillion in represented assets in 2022.
A new report suggests solar and wind power can grow enough to limit global warming to 1.5C if the 10-year average growth rate of 20 per cent can be maintained to 2030. There are a lot of positive climate stories but you have to seek them out. Encouraging and inspiring voices like Katherine Hayhoe (Saving Us) and David Cooperrider (The Business of Building a Better World) can add some balance to what is feeding our brains.
As individuals we can make different choices. And the cumulative effect of our choices matters.
As employees, investors, and consumers our collective voices and choices matter.
As citizens our collective voices matter.