Critical 5

THE EFFECTS OF GLOBAL WARMING ON TODAYS' BUSINESS ACTIVITIES

Introduction

The global climatic change is taking a different path now in that its effect is not only threatening nature but also business activities in various places in the world. Now businesses can no longer sit down and watch because they now have something to lose. If businesses can effectively integrate strategy, people, processes and technology in pursuit of responding to the climatic change, the result can be positive and it will help solve the upcoming problems, moreover it may help prevent some un foreseen effects which may be catastrophic. But why is the focus on the effects of global warming on businesses? Varying levels of appreciation of the effects of global warming are deeply connected in the differences between direct and indirect impacts of climate change. The question that arises is how the business are impacted by the direct and indirect differences? Some of these effects are potentially threaten to alter the favorable climatic conditions that favor businesses. In this discussion we will focus on the impact of climatic change on business and how business can help counter the arising problem. In addition we will discuss in details the steps businesses should take to help contain the problem of global warming before it gets out of hand.

Major effects of global warming on business

Global warming poses some major risks on business and these risk threaten to affect the business world in a negative way. Some of these risks are as follows:

a) Strategic risk

Global warming which basically is a result of climate change may bring about reputation damage. Cruz, R.V. et al. (2007). Reputation damage may include brand erosion and bad publicity. For example a company's reputation can be damaged following negative publicity from a climate-related accident. This may happen to air lines who deal with airplanes and this may cost the company customers and the end results may be losses.

Competition may rise to be stiff in that the climatic advantage for instance will no longer be available. For example a business which deals with tourism depends a lot on favorable climate for the animals to survive but when the climate changes to bad the animals may die and the tourism status may be affected, and now the firm will have to face the competition with the other firms in the world.

Regulation and political trends will have to change if the climate continues to change. These policies may not favor all businesses in fact some will have to suffer so as they can accommodate the policies. Some businesses can even be swept out because the policies can be very harsh to them.

b) Financial risk

Credit services suffers in that the terms change. Here the creditworthiness is eroded and the interest rates automatically rise as lenders considers escalating business risks. Timilsina, Y. P. (2015). The liquidity ratio also is affected. The areas affected include cash flow, call risks and opportunity cost. For example when a firm was forced to relocate because of floods on the initial location will have to receive lower insurance premiums.

c) Hazard risks.

These risks include fire and property damage from storms from bad natural weather conditions due to global warming. Businesses get direct effect of the change of climate where they suffer from property loss or destruction and they have to start a fresh or they stagnate because of the same.

On the same type of risk another risk can be drought which may force people to migrate from one place to another so as to look for greener pastures, where they can feed themselves and be able to sustain their families. This might be a big blow to the businesses in that area where people have shifted from. Firstly, their customers will now be gone they will have no one to do business with. Secondly, some businesses will suffer a major losses, especially those dealing with highly perishable goods, because of reduced populations. On the other side other businesses will be affected directly especially those that depend on probably rain to survive, examples are large scale farmers, their crops will be affected where by the harvest may not be encouraging.

d) Operational risks.

Business operations may be affected in areas like HR, product development, capacity, efficiency, product/service failure and supply chains. Cogan, D. G. (2006). Supply chain disruptions may occur because of adverse climatic conditions brought by global warming. For examples when there is floods the supply channel will be interrupted in that the goods will not reach the target group because of the obstacle.

Impacts of Global warming.

1) Lack of capacity

The lack of capacity may also be a factor due to increased demand when the weather conditions meet extremes. Cruz, R.V. et al. (2007). For instance the target group may demand more than what a firm has and hence there is a shortage created and this may affect the price of the commodities in that they might shoot up.

2) Damage to property and infrastructure.

Sea levels may rise, floods may take place, wildfire may take place killing wildlife or extreme stream may require extensive repair of essential infrastructure such as roads, bridges, railroad tracks, power lines and airport runways. Chaulagain, N. P. (2006). Most of the stated infrastructure are key in facilitating the success of businesses and if they are destroyed, they affect the health of businesses directly in that they become vulnerable to failure.

3) Mass migration and scarcity threats.

Global warming increases the numbers of refugees who migrate from one area to another because of calamities such as floods, wildlife and other climatic related disasters. These refugees include customers of various business hence when they move out of their residential areas the resident business are the one who are affected directly in that they lose customers.

4) Changing prices of goods and services.

When the climatic conditions change the prices of various commodities get affected in that they rise significantly. The problem is that the effects are felt by everyone even those companies which least pollute the environment. Moreover, even the common man who does not pollute the environment is also affected in that he/she has to pay the price of climate change by getting to pay more for commodities.

5) Effect on the employee performance.

Global warming poses a major problem which is the effect to the mankind's health. Timilsina, Y. P. (2015). Global warming itself is caused by high concentration of green houses gases like carbon ii oxide, methane, nitrous oxide and other toxic gases which go and destroy the ozone layer. The tendency of absorption of ultra violet rays is reduced and when those rays reach the earth surface they bring dangerous effects to the creatures on earth. Another effect is that the temperatures increase and this increase has negative effect on humans and animals. Workers tend to feel dizzy, sleepy and tired. The overall effect on the business is that the quality of work is affected.

Ways of reducing global warming.

i. Practicing Afforest ration.

One way of solving the problem of global warming is through practicing tree planting in that to reduce the concentration of carbon IV oxide in the atmosphere. This will help protect the ozone layer and somehow we will reduce the rate at which the climate is changing. Businesses should create programs where they plant trees regularly. The firms which deal with trees should observe the cut one plant two rule so as to save the world from the disastrous effects.

ii. Increasing the use of renewable energy sources.

Companies should adopt alternative energy sources, for example they should move from coal and petroleum and move to green energy like solar which has no effect on the environment. Businesses should install solar panels and reduce the use of hydro electric power which drains our dams they should also use wind to generate power. In doing so the amount of toxic gases released to the atmosphere will be reduced in a bigger percentage and we will be helping our environment.

iii. Reducing or managing carbon related activities.

People should be made aware of the effects of carbon on the environment other than informing businesses should deploy technologies such as smart metering or energy-efficient buildings to improve efficiency. Measuring an organization's carbon usage, its 'carbon footprint'.

iv. The businesses should develop green products and they should offer green services.

Asses shows how existing products contribute to pollution and how they have contributed to the recent state where global warming has become a major issue and concern. For example businesses should stop serving their customers in plastic containers and bags instead they should make alternative products to substitute these commodities. IBM is at the frontline of campaigning on the green status of businesses. In 2011 they launched a Big Green project, to help reduce data center energy consumption.

v. Deployment of smart technologies.

Companies should invest in new, more environmental friendly technologies such as green data centers, which use less energy. Tushman, M. L. (1990). These technologies help in reducing the amount of energy used and besides that it also helps in conserving the environment in that it has modes of reducing emissions and this helps in protecting the environment.

Conclusions

In summary, climate change is becoming a major problem and if we are not careful it's going to get out of hand. Businesses are already feeling the effect of global warming and if they are not to use these effects as a wakeup call then we well be digging a big hole for ourselves. Luckily the problem is not yet out of hand we can still fight back and help correct the problem and prevent future difficulties.

Businesses can now deploy environment saving measures as discussed above. They should religiously participate in making the environment a better place. Other than the businesses, individuals too, have a responsibility in protecting the environment. Everyone should take responsibility and act now. It’s both a communal and an individual responsibility which should not be neglected.

REFERENCES

Anderson, P., & Tushman, M. L. 1990. Technological discontinuities and dominant

designs: A cyclical model of technological change. Administrative Science Quarterly, 35: 604-633.

Chaulagain, N. P. (2006). Impacts of climate change on water resources of Nepal:

The physical and socioeconomic dimensions. Universität Flensburg.

Cogan, D. G. 2006. Corporate governance and climate change: Making the connection.

Boston, MA: CERES.

Cruz, R.V. et al. (2007). In M. L. Parry et al. (eds.), Climate change 2007: Impacts, adaptation and vulnerability (pp. 469-506). Cambridge: Cambridge University Press.

Timilsina, Y. P. (2015). Chronological trend of climate in the Lumle village development committee from Kaski district, Nepal. Crossing the Border: International Journal of Interdisciplinary Studies, 3(1), 53-64.