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Business impacts


Economics has emerged as the key driver for companies that are taking action on climate change. (1) The bottom line is where businesses start and end! In this section, you will find information that will help you understand why climate change is your business. Once you understand how climate change will affect your business you will be in a better position to minimize the risks and maximize the opportunities.


In this section, you will find

  • information about the risks of climate change on your business
  • a summary of how the Kyoto Protocol will affect your business
  • a description of the internal and external business drivers for reducing greenhouse gas emissions


Click here to see Business solutions

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Business risk due to climate change


There are three main categories of risk:

  • Natural Capital
  • Government Policies
  • Customer and Public Pressure

Natural Capital

This risk threatens the natural resources or capital that many businesses rely on for raw materials (forests, fisheries, agriculture) or indirectly (real estate, tourism, retail, restaurant). For example, even if your business does not depend directly on natural capital you still need to ask about your suppliers and customers.


Government Policies

There is a risk that policies will influence the market to favour less greenhouse gas-intensive businesses, products and services.


Customer and Public Pressure

Whether you sell business-to-business or directly to consumers, your customers will increasingly prefer climate-friendly products.


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Kyoto Protocol


In February 2005 the Kyoto Protocol became international law, signaling the first concerted step towards a global commitment addressing climate change.

Under this agreement, thirty industrialized countries, including Canada, are legally bound to reduce emissions by an average of 5.2% from their 1990 levels by 2012.


Canada

In May 2006, the Canadian Environment Minister declared that the Government of Canada no longer endorses or promotes the Kyoto Protocol emission targets saying they are too ambitious. (2)


Manitoba

In 2007, the Province of Manitoba released Beyond Kyoto, their action plan for achieving their commitment to meeting the Kyoto target. Within this plan is a section titled Business Opportunities: Low-carbon profits.


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Business drivers to reduce greenhouse gas emissions


Whether you are driven to change because of the risks to your businesses bottom-line (internal) or because the government forces you to make a change (external), there are ways that climate change puts pressure on your business.


Internal drivers

  • reduce costs
  • increase the quality of products and services
  • diversify products and services
  • stimulate innovation
  • increase employee motivation
  • personal commitment and responsibility to community
  • manage risk and liability
  • maintain or increase market share


External drivers

  • customer or consumer demands for “greener” products
  • profitability and access to capital
  • shareholders demanding accountability and transparency
  • competitive advantage by setting the trend or following the market leader
  • government regulations