by The Impact of Climate Change
Climate change is one of the defining issues of our time and a defining risk to businesses in all sectors. According to the latest report from the Intergovernmental Panel on Climate Change (IPCC), limiting global warming to 1.5°C would require “rapid and far-reaching” transitions in land, energy, industry, buildings, transport, and cities. The impacts of climate change—ranging from increasing temperatures and rising sea levels to more frequent extreme weather events—are already affecting communities, natural resources, economies, and financial systems around the world.
The implications of climate change present both risks and opportunities to businesses. Physical risks like chronic heat waves, flooding, and droughts can disrupt operations and supply chains. Transition risks such as policy changes, legal actions, and changing customer or investor preferences as the world shifts to a low-carbon economy may also affect profitability. However, adapting to and mitigating climate change can also open new areas for innovation, products, and services in burgeoning low-carbon sectors like renewable energy, green buildings, and clean transportation.
Assessing Climate Risks and Opportunities
To thrive in this new landscape, businesses need to understand climate change inside and out—from physical and transition risks to mitigation and adaptation opportunities across their operations, supply chain, and markets. That’s where Climate Change Consulting comes in. Consulting firms specializing in climate strategy help businesses assess risks and opportunities, set targets for reducing emissions and building resilience, develop science-based plans to transition operations, and track and report on progress.
Common areas of assessment include supply chain vulnerability analysis, climate scenario planning, carbon footprinting, assessing impacts on assets and production, determining financial implications under different policy pathways, and stakeholder/investor expectations. Consultants use frameworks like the Task Force on Climate-related Financial Disclosures (TCFD) to evaluate climate risks and opportunities. They also work with clients to determine science-based targets for emissions reductions in line with the Paris Agreement goal of limiting warming to 1.5°C.
Designing and Implementing Climate Strategies
Once risks and opportunities are understood, climate consultants support the design and implementation of comprehensive climate strategies and action plans. This includes recommendations on adaptation and resilience measures, net zero transition roadmaps, procurement of clean energy and vehicles, investments in technologies like carbon capture and storage, and development of climate-friendly products and services. Consultants provide guidance on climate strategy best practices, help integrate climate considerations into business units, operations, and decision-making, and facilitate collaboration across functions and departments.
On the mitigation side, strategy areas include developing science-based emissions reduction targets and clean energy transition plans for achieving net zero goals. Consultants help determine the most cost-effective paths for decarbonizing operations through energy efficiency upgrades, on-site renewables, switching to zero-emissions vehicles and equipment, process changes, and investments in certified offsets or carbon removal technologies. Strategies also address reducing supply chain emissions through supplier engagement programs and incentives.
Tracking and Reporting Climate Performance
Staying on top of climate regulations and best practices to maintain a license to operate also requires continuous tracking of climate performance indicators and reporting to external stakeholders. Climate consultants support the tracking of metrics like energy use, water consumption, waste generation, Scope 1-3 emissions, renewable energy usage, at multiple facility and portfolio levels. They assist with climate risk and performance disclosures according to standards like CDP, TCFD, GRI, and SASB to meet mandatory and voluntary reporting requirements. Consultants also help benchmark climate performance versus industry peers and evaluate progress against emissions reduction targets.
Businesses today face growing expectations to contribute solutions to climate change. Well-designed climate strategies backed by expert consulting lower risks, cut costs, and carve out new opportunities in emerging low-carbon markets. As climate risks become increasingly financial risks, climate change consulting delivers value on multiple fronts for ambitious and forward-thinking organizations committed to sustainable operations and climate action.
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1.Source: Coherent Market Insights, Public sources, Desk research
2.We have leveraged AI tools to mine information and compile it
