Climate Change and Business Risk: Some of the Biggest Challenges.


When we talk about the effects of climate change, often the first place we look is the natural world. There are polar bears dying from starvation for lack of sea ice; there are forests in the American West catching fire and burning rapidly after years of drought have dried out the vegetation. There are human costs too: the damage to homes and communities from extreme weather events that happen with more frequency and severity as the planet warms. And there’s the poor air quality that causes and exacerbates health problems, especially for children and the elderly.

These are compelling arguments for those of us already concerned about our changing planet. However, some of the best arguments to win more supporters for climate action aren’t about the environment at all. Climate change is going to cost us real, hard dollars that we just can’t afford. It’s not just taxpayers on the hook for cleanup and resilience investments. Whole industries will have to change dramatically or disappear. Here are a few that are most at risk:


Climate change’s effect on agriculture is clear. Cultivating crops is already dependent on the climate—you wouldn’t, for instance, grow bananas in Nova Scotia. Some have argued that climate change could increase growing seasons in more northern locations.

But climate is more than temperature. Take California, which despite a wet El Nino year, still hasn’t climbed out of nearly five years of severe drought. Home to a $54 billion agriculture industry, California produces the majority of fruits and vegetables grown and consumed in the United States. During the drought, which scientists say is aggravated by climate change, farmers were forced to let fields lay fallow or even let orchards go as there was little water to save the trees. Drought is expected to become more common and more severe across the West. Back east, increased heavy downpours can cause massive erosion of topsoil, making farms less productive and farming more expensive to replace this nutrient-rich soil.

Beverages (beer, soda, wine)

In 2013, alarmed by the impact of climate change on hops production, water availability and other impacts, more than 20 breweries created the Brewery Climate Declaration, which both advocates for climate action and commits signatories to making their operations greener. As of 2015, their numbers had nearly doubled. Winemakers may feel the impacts even more. As any winery tour will explain, grapevines’ production and quality varies from one side of a hill to another. The climate changes that affect temperatures, precipitation patterns and growth schedules pose a much larger threat to wineries around the world. BuzzFeed’s dramatic headline How Climate Change Will End Wine As We Know It isn’t quite as hyperbolic as you’d think.

It’s not just alcohol at risk. Beverage industries, obviously dependent on water, face serious challenges as climate patterns change and cause water scarcity, leading to increased costs for beverage companies. Recognizing the threats to its business and supply chain, Coca-Cola, a strong supporter of the Obama Administration’s climate agenda, released a climate statement outlining its concern and actions the company will take to reduce its carbon footprint through energy efficiency, renewable energy and even climate-friendly refrigeration.


One of the most insidious and least discussed impacts of climate change is ocean acidification. As humans spew more carbon dioxide into the atmosphere, the ocean absorbs lots of it. The good news is that this slows global warming a bit by removing some greenhouse gases from the atmosphere. The bad news is that carbon dioxide changes the pH of the ocean which is already making it harder for some species to survive.

Shellfish are some of the biggest losers. As the ocean acidifies, it becomes harder for shellfish to create and keep their calcium-based shells. That’s bad for fishermen and companies that rely on this catch for their livelihoods. Warmer and acidic waters affect other fish too. Some species are moving to deeper waters or even closer to the poles, meaning local fishing communities are left without their catch. Declines in fisheries have led governments to enact strict catch limits to hold off population collapse, but that’s made it hard for some fishermen to make a living.

Winter Sports

For the third year in a row, the Iditarod Dog Sled Race could only ceremonially start in Anchorage, Alaska. Too little snow that far “south” forced mushers and dogs to move north to an altered course that would be safer for humans and animals. Of course, not many of us are professional mushers, but all industries that rely on snow should be seriously concerned about a warming world. Protect Our Winters, an organization of professional skiers and snowboarders, estimates the downhill ski resort industry lost more than $1 billion in the first decade of the 21st century between high and low snowfall years. In 2015, Squaw Valley near Lake Tahoe had received just one-third of its annual average by February, forcing it tocancel its World Cup cross events. Even in Canada, resorts have been forced to shut down early due to unseasonably warm weather.

The impacts on the sport obviously have ripple effects. Winter apparel companies, ski equipment, snowboard and other manufacturers and winter goods-providers also suffer when fewer people are able to enjoy winter sports—so too do shops and restaurants in ski towns who rely on winter sports tourists for business.


Insurance companies, in a way, are highly effective gamblers. They create complex models that weigh the odds of any array of disasters happening to their customers and set their rates based on the likelihood that they’ll have to make big payouts in any given year. Climate change blows these models up. In 2005, home insurers lost $8 billion after Hurricanes Katrina and Rita, which collectively caused more than $40 billion in insured losses. Just seven years later, Superstorm Sandy resulted in more than $18 billion in insurance payouts. Insurers know some years will be worse than others, but as these 100-year storms (so-called because they are only supposed to happen once every 100 years) increase in frequency, something will have to change—profits, premiums or the ability to insure some things and places at all.

Reinsurance companies—businesses that insure insurers, kind of like hedging bets—get this. Munich Re and Swiss Re, two of the largest, have been outspoken about climate impacts (acknowledging that climate change is caused by humans) and started incorporating climate change into their models and encourage more resilience and carbon pollution mitigation.

Businesses focus on the bottom line, and when it comes to climate change, the bottom line is businesses know we need to act. While the above industries face acute risks, the economy is large and dynamic, and climate change will have ripple effects that impact everyone. Many companies are already doing something about it. BICEP is a coalition of more than 365 companies under the business sustainability organization Ceres that support the Clean Power Plan and real climate action. The stronger their voices become and larger their numbers grow, the more pressure politicians and regulators will face to act and the better chance we’ll all have of weathering the physical and economic impacts of global warming.

In considering the effects of climate change on various industries, it’s difficult to ignore the one that will need to change the most in order to minimize climate impacts—energy. According to a recent report by Environment America, the United States has the potential to meet 100 percent of its energy needs with renewables. Not only does the U.S. have access to vast energy reserves in the form of wind, sun, earth and oceans, but renewables reduce the need for using dangerous energy extraction methods. With energy leading the way, other industries may also reap the benefits and work toward mitigating the negative consequences of climate change.

Originally published on DeSmogBlog
Aaron Viles is a Senior Grassroots Organizer for Care2. He works with citizen authors on Care2 Petitions to create petitions that will win concrete victories for animals, the environment and other progressive causes.