How Does Climate Change Affect Business? Free Essay

Research Field

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The field of climate change and its implications on international business has been covered in several studies. However, the adaptation mechanisms have not been well outlined in these studies. The recognition that there is a key relationship between climate change and international business has become widespread in the global business community. Developing a consolidated framework that can be used by businesses during these times is very crucial (West & Brereton 2013 p.1). As a result of the climate changes, the investment portfolios as well as the global market adjust and opportunities are created that result to winners and losers. The industries that develop a competitive edge become the winners while those who do not are presumed as the losers. This study will, therefore, focus on the ways to deal with the impacts brought by the climate changes. The effects on various industries will be discussed and the necessary measures to tackle the changes will also be elaborated.

The Adaptation Mechanisms of International Businesses to Climate Changes will serve as the topic of this study. This topic was arrived at after a thorough perusal of the various studies conducted with regard to climate change and its effects on the business world. These studies have only highlighted the effects without giving much detail to the ways to counter the changes.

Statement of the Problem

Companies understand that sustainability is not a choice but a market fact. While many businesses have taken some measures to adapt to the unexpected impacts of climate changes, other enterprises are not aware of the impending risks and the necessary adaptation measures. Adaptation to these changes reduces the business’ vulnerability both in the short and long term. Adaptation measures can be either low cost or high cost but regardless, businesses should strive to implement them. Some of the strategies developed by the firms in relation to climate change, denote patterns of market approach (Kolk 2009, p.5).

Climate change effects can be well observed due to the rise in global temperatures, changes in precipitation, and even the extreme weather events. These changes have become prevalent in global business. Every year, there arises new challenges in international business strategies which need to be addressed. For many companies, the effects of these changes are huge. According to a report by the International Leaders Forum (2012, p. 5), water shortages that are yet to be experienced will cause disruption in the direct operation, distribution networks, consumer markets, and the general supply chains. Businesses must, therefore, come up with the right procedures to cope with these climate changes. These changes will also bring an alteration in the market thereby shutting off some markets and creating new ones.

The distribution and benefits of climate changes are core interests to many policy makers and business leaders (Bettina et.al 2009, p. 12). As a consequence, the changes have become a constant agenda in many companies in the world. Many corporate boards have regarded the phenomenon important in reconsidering the strategies in terms of investment, brand management, and product development.

The response of the business to the climate change depends on its sector, the leader’s point of view, exposure to the change, and its capabilities (Jones and Levy 2007, p.2). However, despite the risks posed by these changes, many business leaders do not consider them while pushing for development of new products. It is therefore vital for businesses to adapt to the changes if they want to prosper in the future.

Why does climate change matter

The primary objective of this study will be to establish the mechanisms that will enable businesses to adapt to the changing climate. The study will also show the industries that are mostly affected and how best they can do to counter the changes so as not to go out of business. It is only through implementing these actions that we are guaranteed of sustaining ourselves despite the changes in climate

Research Methodology

The research will employ several research methods in order to draw the best adaptation mechanisms. First, a desktop survey will be conducted to review the literature for climate changes and the adaptation methods that have been used over the last ten years. All the related research studies conducted at this time will be identified and used during the survey. A detailed report will then be produced so as to reveal the existing gaps in the adaptation process due to climate changes.

A workshop will also be conducted with leaders of various companies, regulatory authorities and other key stakeholders. The report produced initially from the desktop survey will then be handed to each of these participants to serve as a guide during the session. Each workshop session will be used to build on the theme of the previous workshop. The sessions will be as follows:

ü Session 1- the approaches to adaptation

ü Session 2- the risks brought by the climate changes

ü Session 3- costs involved in the adaptation

A comprehensive report will be drawn during the final session of the workshop and tabulations will be made. The results of this study will be generated after consultation from some of the workshop’s attendees and thorough consultation with other global business heads.

Significance of the Study

Information gathered from the study will be useful to business policymakers and company leaders across the world. Climate change is an inevitable course and, therefore, companies will need to use the proposed mechanisms from this study so as not to waiver in the wake of the changes. These mechanisms that will be drawn from the study are vital for the survival and thrive of any business. The companies will therefore be able to come up with the strategies that best suit them. The study will also serve as a reference for other researchers in this line of study. The field of climate change and the impacts on business develops numerous topics over the years which ought to be studied so as to enable the businesses to conform to the changing nature.

Reference List

Furrer, B., Hoffmann, V. and Swoboda, M., 2009. Banking & climate change: Opportunities and risks: An analysis of climate strategies in more than 100 banks worldwide. Sustainable Asset Management, ETH Zurich and ZHAW.

Jones, C.A. and Levy, D.L., 2007. North American business strategies towards climate change. European Management Journal, 25(6), pp.428-440.

Pinkse, J. and Kolk, A., 2009. International business and global climate change. Routledge.

West, J. and Brereton, D., 2013. Climate change adaptation in industry and business.