Climate change

Definition

Climate change refers to significant and lasting changes in the Earth's climate, particularly those caused by human activities, such as burning fossil fuels and deforestation. This phenomenon leads to global warming, rising sea levels, and extreme weather events, which can have profound impacts on societies and economies. The effects of climate change are increasingly viewed as key societal issues that influence business operations and relationships with the public.

5 Must Know Facts For Your Next Test

1. Climate change is largely driven by human activities that increase greenhouse gas emissions, primarily from fossil fuel combustion.
2. The effects of climate change include more frequent and severe weather events, such as hurricanes, droughts, and heatwaves, which can disrupt supply chains and affect business operations.
3. Businesses are increasingly being held accountable for their environmental impact, leading to a rise in corporate social responsibility (CSR) initiatives aimed at mitigating climate change.
4. Regulatory frameworks around the world are evolving to address climate change, pushing businesses to adapt practices that reduce emissions and promote sustainability.
5. Investors are increasingly prioritizing environmentally sustainable companies, creating financial incentives for businesses to engage in practices that address climate change.

Review Questions

• How does climate change pose risks to business operations and decision-making?
  • Climate change poses significant risks to business operations by causing disruptions in supply chains due to extreme weather events and resource scarcity. Companies may face increased costs related to energy and raw materials as regulations tighten and public scrutiny rises. Additionally, businesses must consider their long-term viability in a changing climate, prompting them to adopt adaptive strategies and invest in sustainability initiatives.
• Discuss the role of corporate social responsibility (CSR) in addressing climate change within business-society relationships.
  • Corporate social responsibility (CSR) plays a vital role in how businesses engage with society regarding climate change. Many companies are adopting CSR initiatives that focus on reducing their carbon footprints and promoting sustainable practices. This not only helps mitigate climate change but also enhances a company's reputation among consumers who value environmental stewardship. Effective CSR strategies can lead to stronger relationships with stakeholders and a competitive advantage in the market.
• Evaluate the implications of regulatory changes aimed at combating climate change for businesses and their operational strategies.
  • Regulatory changes aimed at combating climate change have profound implications for businesses, as they often require companies to re-evaluate their operational strategies. Compliance with new regulations may lead to increased costs initially but can also open up opportunities for innovation and efficiency improvements. Businesses that proactively adapt to these regulations may gain competitive advantages, while those that resist change risk facing penalties or losing market share as consumers shift toward more sustainable options.

Related terms

Greenhouse Gases: Gases like carbon dioxide and methane that trap heat in the atmosphere, contributing to global warming and climate change.

Sustainability:

Practices that meet current needs without compromising the ability of future generations to meet theirs, often focusing on environmental protection.

Carbon Footprint: The total amount of greenhouse gases produced directly and indirectly by an individual, organization, or product, usually measured in equivalent tons of CO2.