Climate change is a major business risk, one that should be economic priority rather than afterthought.
The Wall Street Journal, Bloomberg, Kiplinger’s and other business publications increasingly raise alarms. For example, Morningstar features a section on sustainable investing, with a recent headline noting “Can’t Fix Tomorrow with Yesterday’s Tools.” Investopedia points out how the US Securities and Exchange Commission, since 2010, has required companies to disclose to shareholders any climate issues that could have impact on business operations.
The costs of ignoring climate change are immense.
● Businesses and consumers anticipate higher prices for energy along with goods and services.
● Insurance costs are rising, and major companies are dropping coverage for properties in flood-prone regions like Florida, reports the Insurance Journal.
● Retirees, in a notable shift, are examining flood-risk maps and avoiding properties in Florida and other areas prone to extreme weather, reports the New York Times.
● Higher temperatures and water scarcity are reducing crop yields and increasing weeds, pests and fungi.
● The medical research community points to climate change, as the “greatest threat” to global public health, according to a joint statement in 2021 by a group of medical journals, reports Deloitte Insights. Climate change is worsening infectious diseases as well as respiratory, neurological and gastrointestinal problems – and increasing costs.
● Warning waters are prompting ocean species to shift to cooler waters and even causing some populations to crash.
The list goes on. Severe weather events are occurring more frequently and communities must invest in disaster planning.
Stopping climate change requires shifts in individual behavior, and a Morningstar interview described the Take the Jump campaign, urging people to partake in “Less stuff and more joy” with six simple actions that anyone can try:
● Limiting flying and consider taking no more than a flight every three years.
● Reduce meat and dairy in diets
● Purchase no more than three new items of clothing each year.
● Control clutter and stop purchasing unnecessary goods – and hold on to possessions longer and try repairing before disposal.
● Shift energy sources and providers and rely on more renewables.
● Become an active rather than passive investor. Examine pension investments and urge managers to reconsider investing in companies that undermine quality of life. And if you own stocks, take stands by voting on shareholder resolutions. The Climate Action 100+ flagged 14 proposals during the 2021 proxy season – and six received majority approval. The organization provides updates on proposals and the voting season, which starts again in earnest next year.
Photo courtesy of Wikimedia Commons.