The Effects of Climate Change and How Technology Can Help

Climate change has become an undeniable fact which has affected businesses around the world. The rising sea level, the more prominent natural disasters force us to rethink about how we do business without damaging the environment profoundly. Earth's temperature has gone up over the last half of the century dramatically. 2016's temperature was 1.69 degrees warmer than the 20th-century average. Our socio-economical activities lead to more greenhouse gas emission. Around the globe, the number of climate-related disasters has more than tripled since the 1980s. How do we find ourselves in such a place? Scientists believe we all have a role to play in climate change. Therefore, businesses and individuals need to make changes to our lifestyles.

How does climate change evolves because of our socio-economic activities?

Climate change evolves because of our socio-economic activities. The biggest emitters of greenhouse gas are China and the US. Together they make up for more than 40% of the global total greenhouse emission, according to 2017 data from the European Commission's Joint Research Centre and PBL Netherlands Environmental Assessment Agency. China and the US have massive industrial activities. The use of coal and fuel in these activities pose a threat to the air surrounding the industrial areas. The transportation of goods by trucks or planes have increased the emission of CO2 into the atmosphere. Farming activities have caused massive greenhouse gas emission. Farms emitted 6 billion tonnes of greenhouse gas in 2011, or about 13 per cent total global emission. Soil disturbance has caused carbon emission. Digging up the soil has changed the level of carbon in it. As farmers continue to convert land, we continue to lose CO2. The carbon footprint of products used in agriculture is substantial enough to mention. It includes fertilisers and feeding products. Individuals in these highly industrialised countries also impact climate change. Transport by cars or planes has increased greenhouse gas emission. Using household equipment such as tumblers has affected the Carbon dioxide level.

How does climate change impact our business around the globe?

As climate change continues, there will be more disasters coming our way. It can make droughts or storms more likely or intense. The extraordinary heatwave which killed some 70,000 people in Europe should have a once-in-500 year event. However, it becomes a once-in-40-year event. Climate change also adds moisture to the air and takes it away from the land and ocean. It will make drought worse. It will make the weather more extreme. Insurance companies have more risk exposure, and natural disaster-related claims will become more common than they would ever expect. During the 2019 Bushfire event in Australia, insurance companies paid out an enormous amount of money to overwhelmed businesses and individuals. In the future, insurers need to forecast the demand for claims more accurately, using precise data from the Bureau of Meteorology with the help of AI. In that way, they can estimate the premiums charged and the number of reserves for claims.

How could businesses win the fight against climate change?

The fundamental change needs to happen in business process levels.

Perhaps we could plant more trees in the industrial levels ? Create efficient energy sources (Nuclear power?)

Businesses are now moving away from fuel and coals and toward renewable energy such as solar, wind and biomass energy. They drive innovation in the hope that our future will not be so grim. Climate change has become an urgent matter. Companies have been treating climate change as a social responsibility issue rather than a business problem. Those are the ones which endure the biggest hits. Each company needs its tailored strategy to deal with climate change. Business needs to start treating carbon emissions as costly because overtime companies will be vulnerable to climate change. It is a matter of operational effectiveness, not just a social responsibility. It is similar to a production line having too many raw materials than it needs, which creates more waste and unnecessary supply space.

The effects of climate change could be associated with infectious diseases. Covid-19 is proof of nature's revenge on human beings. It has become a global pandemic which impacts 150 countries and the lives of billions of people around the globe. Covid-19 is a zoonotic virus, which is animal-borne due to climate change. Because of the increase in temperature, more animals are moving closer to the poles. They meet each other in ways that are unnatural to them. It results in more pathogens, hence, more new diseases. Companies now need to look into ways of working remotely to reduce the impacts of infectious diseases while ensuring their operational efficiency.

Some companies even go further with their approaches to climate change to reduce their vulnerability. They change not only their operations but also their strategies. They lead the restructuring of their industries to become more adaptive to climate change and address the issues more effectively. They even innovate their activities to create a genuine competitive advantage. Firms might go digital with all of the documents sent out to customers and use automation instead of the work of human beings where possible. They could replace face-to-face client meetings with remote online meetings. They could create a line of products as opportunities to enhance or extend their competitive edge in the market. A Chilean startup company called "The Not Company" use plant-based materials to replace animal products while keeping flavours intact in food using AI. Tesla, Inc. specialises in electric cars intending to provide passenger cars using clean and renewable energy at affordable prices. These companies use climate change as opportunities to create new products and disrupt the market.

Insurance companies will need to have an outlook of what climate change may mean to them. Insurers will expect more claims from customers due to the rise in the number of natural disaster events. They have to have a system to predict what events will likely occur and the extent of their damage. The general public who is afraid of what might happen to them down the track may require more insurance. However, more claims due to climate change could mean that insurance companies may not experience healthy profits. The insurance industry has been a leader in identifying climate change-related risks to property, health, crops and other activities subject to insurance. Society needs to know about these risks.

Manufacturing businesses may experience global warming differently. It will affect the demand for products such as more household goods and more food in the bunkers. However, it could also mean erratic climate can make it harder to predict what to grow to be profitable in the future. They will also have a risk of food supply and operations interruptions due to extreme weather events. The manufacturing industry relies on agriculture. The agricultural businesses will take damage from climate change. The likelihood of extreme weather events will expose farmers to potential disruption to water supply, illness of livestock and interrupted access to land during a flood or extreme rain conditions. It can result in an interruption in the supply chain of manufacturing businesses. These industries will rely on accurate predictions from the insurance industry to plan and to prepare what is next for them.

Businesses, which are from different industries, need to come together to help fight Climate Change. Using technology, they can predict and change their practices to become more ethical and sustainable. They need to be mindful of the impacts they have on other industries as well when it comes to global warming.

What can we conclude from this?

We can win the fight against climate change if we look further into new technologies and beyond economic gains. Education of younger generations about protecting our planet is crucial when our world becomes increasingly hotter. Earth is not beyond repair if we act now as businesses, individuals or governments. Hundreds of years after climate change, we will look back and have no regrets because we have done the best that we could. The future is in our hands. It is our responsibility to raise awareness about climate change and the way the human race faces this particular challenge.