A Changing Climate: why every employee should understand climate risk
Last week marked the release of the latest Intergovernmental Panel on Climate Change (IPCC) report - the final in an eight-year-long undertaking from the world's leading scientists.
The findings are sobering. Not only are climate impacts on people and ecosystems more widespread and severe than expected, but some climate impacts are already so devastating that they cannot be adapted to.
The good news is that the report emphasises we have many of the solutions at our disposal now. As businesses and employees, we can (and should) be doing our bit to mitigate climate change; but we should also be thinking about how we can adapt our business practices to this new reality.
Why should every employee understand this?
Climate risk isn't just something that concerns business leaders and policymakers. Every employee has a role to play in understanding it too. Think of it like a game of Jenga – every piece you remove increases the risk of the tower toppling over. In the same way, every action or decision made by an employee, regardless of department and seniority, can either increase or decrease their company's climate risk.
For example, imagine you lead a retail company that relies heavily on a supply chain that's vulnerable to climate impacts. By empowering your employees to understand the risks associated with your supply chain and encouraging them to make decisions that reduce those risks (for example, locking in contracts with sustainable suppliers), you can create a more resilient business.
The same principle applies to all parts of your business. Employees in finance, marketing, human resources and other departments can all contribute to reducing climate risk. By empowering them with the knowledge and resources they need to make informed decisions, you can help your business navigate the challenges of an increasingly volatile climate.
It's also important to think about the second and third-order effects. The IPCC report highlights that climatic and non-climatic risks will increasingly interact, creating compound and cascading risks that are more complex and difficult to manage. Employees must understand how the full value chain may be impacted, so that they can help you predict and navigate these evolving risks.
