Environmental Issues Impacting Business
Matt Moshiri, President, Verisk Maplecroft Are companies considering Climate issues in their business strategies? How well global organisations manage the escalating environmental and climate crisis is now one of the most critical factors determining their long-term resilience. And while a growing proportion of businesses are seeing the issue finally make its way into boardrooms, it’s right to question whether companies have put the necessary steps in place to address a crisis that will impact them across a number of fronts. What are the risks and fallouts of environmental issues? Alongside the physical risks posed by climate change, harsher regulations will emerge and mounting legal liabilities and reputational damage will become a real prospect for many businesses, due to their association with rises in global heating and the destruction of habitats. Additionally, the secondary and knock-on effects of climate change, from social unrest to economic and political instability, will present a complex landscape to be navigated. Yet, while these challenges are largely foreseeable, emissions are rapidly returning to pre-shutdown levels, ecosystems continue to decline, and many organisations are simply failing to act. From a strategic perspective, optionality can provide flexibility to traverse a changing risk environment. However, the climate crisis will back some industries into a corner and force reactive decision-making if not appropriately – and collectively – dealt with in the near term. How the future looks like? The key challenges for business will emerge and how governments, investors and corporates can manage this growing body of risks in the face of ever-increasing pressure from shareholders, regulators and customers is to be seen. With the window closing for actions to minimise climate and environmental impacts, the question is now not only how will organisations respond, but how quickly they will do so. Verisk Maplecroft | Environmental Risk Outlook 2021 Photo: Stockphoto.com
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