How companies are adapting to climate change
In organizational decision making there has always been the implicit assumption of stable climate. From the dawn of civilization to the industrial age this assumption has consistently guided strategic choices. However, the specter of climate change challenges this paradigm.
As we continue, as a planetary civilization, the current trajectory of increasing carbon emissions, the need to take into account in business decision-making processes both current and future levels of climate change increases.
Climate adaptation and resilience require strategic decisions
Here arises the question from which the others mentioned below arise: how can organizations manage this climate change environment and the profound impact on the functioning of the business environment? How to develop the necessary capacities to assess and effectively address these challenges? Furthermore, how can companies ensure their viability and resilience in a future defined by a much different climate than today?
These questions form the core of a debate in which as many organizations as possible should engage. Until climate adaptation and resilience become part of the fabric of strategic decision-making in both the public and private sectors, discussions around this vital issue will remain absolutely necessary.
Adaptation, in this context, involves not only managing the visible consequences of climate change, but also those that are already part of the future of climate developments or very likely to manifest. Geographical variations and industry-specific pro-vocations require subtle understanding and pro-active planning. Adaptation requires organizations to comprehensively assess potential risks in different scenarios and develop robust strategies to mitigate them.
While remarkable progress has been made by many organizations in their adaptation efforts, there remains a palpable need for better synchronized action. This involves adopting a broader, forward-looking perspective in planning and strengthening organizational capacities to respond effectively to the challenges of climate change.
Moreover, adaptation is not just a defensive maneuver aimed at managing risks. This presents strategic opportunities for organizations not just to survive but to thrive in the face of adversity. By integrating climate adaptation into their operational ethos, companies can uncover new growth opportunities and gain a competitive edge in an increasingly volatile world.
Strategic forecasting actions and pro-active planning
Strategic foresight and proactive planning are imperative for organizations aiming to navigate the complex terrain of climate change. Here are some key considerations to guide them on this transformative journey:
Holistic risk assessment
Organizations need to take a holistic approach to climate risk assessment, considering a diverse spectrum of potential impacts across their entire value chain. This involves analyzing vulnerabilities, from supply chain disruptions to market changes, and developing contingency plans to mitigate them.
Scenario-based planning
Given the uncertainties inherent in climate change, organizations must engage in scenario-based planning (standard, positive, negative) to anticipate a range of possible futures. By visualizing different climate scenarios and their impacts, companies can better prepare for tailored responses and minimize potential disruptions.
Capacity building
Building domestic capacity to understand and respond to climate change challenges is vital. This includes investing in staff training, using data analytics to make informed decisions, and fostering a culture of innovation and resilience within the organization.
Collaborative partnerships
Tackling the complex challenges of climate change requires action and collaboration. Companies from all industries, organized in representative associations, must partner with government agencies, research institutions and civil society organizations to pool resources, share knowledge and collectively address the challenges of climate change.
Innovation and adaptation
Adopting a mindset of innovation and adaptation can unlock new opportunities for organizational growth and differentiation. By implementing sustainable development practices and capitalizing on emerging markets, companies concerned with these themes can position themselves as leaders in a rapidly changing world. Furthermore, adaptability is as important as innovation, as it enables organizations to respond promptly to changes in their business environment and adapt accordingly to remain competitive.
In conclusion
Taking climate change into account is no longer an option, but a strategic imperative for companies in all sectors of activity. By integrating climate considerations into their decision-making processes, building adaptive capabilities and capitalizing on strategic opportunities, organizations can not only survive but thrive in an era of climate uncertainty. It is time for business to rise to the challenge by promoting adaptation as a means to a sustainable future.
Florentina Șușnea este Managing Partner în cadrul companiei PKF Finconta. Experiența ei profesională de peste 26 de ani cuprinde domeniile de audit statutar și IFRS, consultanță fiscală, probleme de rezidență fiscală, restructurare financiară și fiscală, documentație și politici de Transfer Pricing, fuziuni și divizări, M&A, expertize judiciare, contabile și fiscale, due diligence de achiziții. Florentina este membru acreditat al următoarelor organizații profesionale: Camera Consultantilor Fiscali, Camera Auditorilor Financiari din România, Camera Expertilor și Contabililor Autorizați din România si Association of Certified Anti-Money Laundering Specialists. A absolvit Facultatea Finanțe-Contabilitate din cadrul Academiei de Studii Economice, București, Facultatea de Drept din cadrul Universității ”Titu Maiorescu”, programul MBA de la Tiffin University din SUA, este doctor în economie și a urmat numeroase cursuri naționale și internaționale în domeniul fiscal. florentina.susnea@pkffinconta.ro
