Business owners often think about risks in terms of the potential for financial loss. But other risks can also wreak havoc on our businesses, like natural disasters and other environmental threats. That’s why environmental risk management is so important. By taking steps to protect your business from these risks, you can help ensure your business’s long-term resilience.
Here’s a look at why environmental risk management is critical to business resilience and what you can do to minimize your business’s exposure to these risks.
Environmental Risks That Threaten Businesses
Climate change is one of the biggest environmental risks facing businesses today. As temperatures rise and weather patterns become more extreme, businesses are increasingly vulnerable to damage from floods, hurricanes, and other natural disasters. In addition, climate change can lead to increased costs associated with energy use and water consumption. As a result, businesses need to consider minimizing their exposure to these risks.
Another big environmental risk facing businesses today is air pollution. A report by Greenpeace Southeast Asia and the Centre for Research on Energy and Clean Air found that burning gas, coal, and oil causes three times as many deaths worldwide as road traffic accidents. They also estimate air pollution has an economic cost of $2.9 trillion, which is 3.3 percent of the world’s GDP. Air pollution not only poses a health risk to employees and customers, but it can also damage property and equipment. In addition, air pollution can lead to higher operating costs due to increased energy use and the need for repairs or replacement of damaged equipment.
What Businesses Can Do
While environmental risks are a major threat to businesses, there are things that you can do to minimize your exposure to these risks. Here are a few tips:
Identify alternative sources of supply
When it comes to business, it’s important to be prepared for the unexpected. One of the most unpredictable things that can happen is a natural disaster. If your primary supplier is affected by a natural disaster, you must have a backup plan.
One way to do this is by identifying alternative sources of supply. You can identify potential suppliers in other parts of the country or even in other countries. This way, if your primary supplier is affected by a natural disaster, you can still get the supplies you need to keep your business running.
In addition, it’s crucial to plan how you will communicate with your employees and customers in the event of a natural disaster. This plan should include things like alternative methods of communication and how you will keep your employees and customers updated on the status of your business.
Invest in disaster-resistant infrastructure
Disasters can have a huge impact on businesses, both financially and operationally. That’s why companies need to invest in disaster-resistant infrastructure. This type of infrastructure is designed to withstand natural disasters like floods, hurricanes, and earthquakes. By investing in this type of infrastructure, businesses can help protect their businesses from the damage that these disasters can cause.
Moreover, investing in disaster-resistant infrastructure can help businesses save money. For example, a business with a facility prone to flooding may have to spend money on flood insurance. But if that business has a facility that is designed to be flood-resistant, they may be able to cancel their flood insurance policy. This can save the business money in the long run.
Businesses should also consider investing in backup power systems. Natural disasters can often lead to power outages, which can impact a business’s operations. A backup power system can help ensure that a business continues to operate even when there is a power outage.
By investing in disaster-resistant infrastructure, businesses can help protect themselves from the financial and operational impacts of natural disasters.
Government recommendations can help businesses minimize their environmental risks. The Occupational Safety and Health Administration (OSHA) offers a variety of recommendations for businesses on how to protect employees from air pollution. The Environmental Protection Agency (EPA) also provides resources on its website that can help companies to reduce their air pollution.
In addition, the Financial Stability Board (FSB) established the Task Force on Climate-Related Financial Disclosures (TCFD) in 2015 to make recommendations for transparent, reliable, and consistent reporting of risks and opportunities associated with climate change. The TCFD recommendations highlight how climate change will affect business and offer company-wide procedures for end-users to understand how climate change affects their people, processes, and bottom line, as well as how their firm influences the environment. They also recognize climate risk while identifying potential benefits.
Train employees on how to safely operate in areas where air pollution levels are high
Many businesses operate in areas where air pollution levels are high. This can be a problem because high levels of air pollution can have a negative impact on employees’ health.
That’s why businesses need to train their employees on how to operate safely in areas where air pollution levels are high. Employees should be taught about the dangers of air pollution and how to protect themselves from it.
Businesses can also help protect their employees from the adverse effects of air pollution by providing them with masks and other safety equipment. Employees regularly exposed to high levels of air pollution should be given special medical attention, and businesses should keep track of any health problems that their employees may experience due to exposure to air pollution.
Environmental risk management is critical to business resilience because it helps protect businesses from the damaging effects of climate change and air pollution. By taking steps to reduce their exposure to these risks, businesses can help ensure their long-term viability and continued success.