Editor’s Note: This article originally appeared on Inc. here.
Opponents of action on climate change like to present the science related to the topic as undeveloped. They also intimate that there’s considerable debate among scientists.
It’s not and there isn’t. The best proof of this is that the business community is taking climate change seriously. Insurers, for instance, know they have to foot the bill for increasing weather-related catastrophes and have used data about climate change models to inform their projections. Many realtors factor climate change into their calculations of long-term value for properties near flood zones. Even Donald Trump has acknowledged the reality of climate change in his business dealings. In his application to erect coastal protection for a golf course in Ireland, Trump cited global warming and its consequences as a primary impetus for the decision.
Why then did Trump pull out of the Paris Climate Agreement? While there’s a knee-jerk tendency to be against anything the previous president was for, we can’t discount the fact that the Koch brothers have spent more than $100 million to groups denying climate change. If any GOP candidates stray from the party’s orthodoxy on climate change, then the Kochs will back someone against them in the primaries.
The good news is that the Kochs’ agenda is at odds with most of the rest of the business world. Companies ranging from Exxon to Walmart to Google acknowledge that climate change is real. While the GOP is clinging to a view embraced by 3% of scientists, businesses are ignoring their agenda and instead are acting as the real force of change.
Why most businesses take climate change seriously
CEOs of Fortune 1000 companies aren’t known as wild-eyed liberals, but as keen observers of market trends. Though some are no doubt driven by conscience as well, many companies engaged in long-range planning see resource and supply-chain issues related to climate change.
For instance, Coca-Cola learned after a water shortage in India in 2014 that climate change is likely to remain a fixture of the landscape. The company sees “100-year floods” every two years and droughts as a threat to the sugarcane, sugar beets, water and citrus fruits as a threat to its business.
Similarly, Nike had to shut down four Nike factories in Thailand in 2008 because of floods. Nike believes that more disruptions to its supply chain are on the horizon and that more extreme weather will cause droughts in regions that produce cotton, which it uses to make its clothing.
Businesses also realize that the majority of the U.S. public believes that climate change is occurring. A 2016 Pew survey showed that 61% of Americans thought that within the next 50 years, climate change will cause major changes to Americans’ way of life.
Why some businesses see climate change as an opportunity
While there’s no upside to continued supply chain disruptions, there are greater profits to be made by adding efficiency. Walmart, for instance, began an initiative in 2005 to shrink its packaging and make truck routes more efficient which in turn has eliminated 28.2 million metric tons of greenhouse gases, the equivalent of taking 5.9 million cars off the road. That initiative also saves the company $1 billion a year.
A World Wildlife Fund/CDP study also found that businesses that cut carbon emissions by 3% annually between 2013 and 2020 could save as much as $190 million from reduced energy bills, increased productivity and innovation. IoT will help these companies squeeze out even more efficiency with sensors that track data to determine the optimum level of resource allocation.
Of course, companies that are directly involved in the energy business also see an opportunity. Tesla, for example, has not only made electric cars a viable category, but is creating new business with solar roofing panels and home batteries
The real opportunity for most businesses at this point is in leadership of energy optimization and supporting the young companies and new products that will together help their bottom line. As the current administration continues to pretend that climate change isn’t a threat and any actions to curtail it would be a drag on the economy, the business community can make a daily habit of proving the opposite. It’s not only good for business, it’s the right thing to do.