What activities should companies prioritize in order to effectively manage climate change risks?

To manage climate change risks, companies should focus on three (3) major activities: education, reducing greenhouse gas (GHG) emissions and adaptation...

1. Educate Employees, Customers and Suppliers:

a. Understanding the causes of climate change and its potential outcomes is key to managing the risks. To this end major companies should provide incentives that encourage education throughout the entire company and its stakeholders so that decisions at every level are helping to achieve climate goals.

b. The latest IPCC Assessment Report is one document that can help educate employees in many areas regarding climate change risks.

2. Reduce GHG Emissions:

a. Complete a baseline GHG inventory of all company activities, including supply chains and customer use of products, as well as product end-of-life scenarios.

b. Adopt GHG reduction targets and develop metrics for tracking emissions.

c. Implement policies to begin reducing GHG emissions through energy efficiency, conservation and switching to renewable sources, and by purchasing offsets. DOE’s Climate Vision program can help here. Consider joining the Chicago Climate Exchange (CCX).

d. Review business processes/product designs, and look for ways to reduce material and natural resource consumption. Also, look for ways to reuse and recycle materials to reduce inputs.

e. Provide incentives for purchasing departments to search for and use suppliers that have implemented sustainable practices and GHG reduction programs. Companies that are ISO 14000 certified have met certain environmental requirements.


f. Encourage less driving miles for commuters, and more telecommuting and teleconferences.

g. Monitor and verify results of these initiatives.

3. Adaptation to Future Changes:

a. Identify business operations, including supply chains and other interests, that could be disrupted by climate and environmental changes, such as increased storms and rising sea level, and create plans for dealing with these changes.

b. Identify areas within the business that may come under GHG emissions regulations, and develop plans for compliance.

These priorities overlap to some degree; for instance reducing GHG emissions will likely involve reducing fossil fuel usage and shifting to renewables, These measures will improve adaptation by insulating companies from the dramatic swings in fossil fuels prices and possible disruptions in supply that are predicted in the future. Reducing emissions will also help to achieve future regulatory compliance goals.