Climate Change - a Business Perspective

Current Events Article 2

        Over the last 40 years, the Arctic has been rapidly melting at the hands of excessive carbon emissions, as mass globalization, production and energy use expand in the developing world. This sea ice loss has had a loop-like effect on global temperatures, as less white surface on the earth leads to less solar rays reflecting back off the earth. Instead, more heat becomes trapped in the atmosphere, and thus the issue of climate change aries. However, among the many negative externalities of this environmental catastrophe, the growing count of endangered species and wildlife remains one of the most prominent, yet the least noted on. The analysis that follows will detail how the aforementioned tension has come about, why it is concerning and possible practical solutions to amend the issue.

        On a grand scale, this situation exemplifies a tragedy of the commons, which has lead to the disruption of an entire ecosystem hosted by the Arctic. The decreasing sea ice coverage has lead to a depletion of algae, which the survival of the entire Arctic food chain is dependent on. Specifically, algae thrive on the under-surface of sea ice, which zooplankton feed on, which various types of fish feed on, which are consumed by seals, and so forth. Additionally, ever-increasing global warming has lead to dry spells of snow, but increasing rainfall. This creates an environment unsuitable for harp seals to give birth, or reindeer and caribou to forage for food under the snow. Among the wildlife under threat are caribous, harp seals, polar bears and narwhals. The loss of these larger carnivores connote that the ecosystem is in under threat.

        However, this situation is worsened by the fact that we cannot ascertain nor retrace which specific businesses and corporations are to be held accountable. In consequence, we cannot affirm who the specific stakeholders are, as many are distanced from this predicament and, in totality, do not consider it to be an issue at all. There are stakeholders on the fringe who are typically not taken into account, such as the few indigenous or Native peoples who consider the Arctic to be their land. With the destruction of the ecosystem in place, their survival will be jeopardized. Lack of stakeholder engagement has lead to limited knowledge of the matter and a lack of solutions. Furthermore, most of societal pressure falls on NGO’s and wildlife programmes to take action, such as the World Wildlife Fund (WWF), Greenpeace International and the UK Natural Environment Research Council’s programme, PRIZE. However, it can be argued that those to be held accountable are corporations whose operations leave a massive ‘ecological footprint’, as this directly ties into the deplorable health of surviving ecosystems. The  following illustration (left) displays the size of each country’s ecological footprint, with the United States,  Canada, Western Europe, parts of the Middle East and China ranking among the poorest. [pic 1]

        Regarding the alleviation of such concerns, it is imperative that businesses are not only more transparent within their sustainability reports, but are also reporting significant information, such as: consumption of energy, biomass, building material, water and other resources. While there is currently no method of measuring global footprints, individual city ecological footprints have been and are being evaluated. Additionally, more companies need to be wary of and limit their carbon footprint, as this is the major cause for rising temperatures overseas. By quantifying such contributing factors, they can better understand how they can create shared value within their production and thus, preserve natural capital. Through increase transparency, we will be able to more easily identify the stakeholders at the forefront of the business tension, and respond accordingly. With the emergence of ‘carbon capping’ or taxation more businesses will be pressured to comply with carbon emission regulations and cut their existing costs of production. Such new regulations will not only show the public that companies are focused on comprehensively creating shared value, but will also increase awareness and lobbying of the issue as a whole. The UNFCCC (United Nations Framework Convention on Climate Change) has already begun working hard to invest and redirect financial flows to address climate change. In conclusion, there needs to be a combined effort put into transforming into a circular economy, in which pollution is avoided, waste is reduced and resource productivity is promoted.