There are better ways to cash in on climate change

Peddling air conditioners in 2030 may seem enticing, but can we do better?
Photo by AbsolutVision on Unsplash

If I were to tell you that 10 years from now, it is almost certain I will be suffering from hunger, lacking access to clean water, and my home will be stiflingly hot, possibly even uninhabitable — what would you do to help me?

Likely your inclination is to try to help me avoid this terrible fate: “Here, let me provide a solution so you never have to worry about hunger or extreme heat, and so that you’ll be able to continue living in your home for decades to come. Even your grandchildren will inherit this beautiful home!”

When it comes to climate change, my dilemma is our shared dilemma. However, major corporations seem reluctant to give us solutions. Rather, it would seem most are counting the ways that they’ll be able to profit off our misery once it hits.

Last month, Bloomberg reported on the disclosures made by corporations to the Carbon Disclosure Project on how they are preparing for climate change. The Carbon Disclosure Project collects self-reported environmental data from companies around the world, including how companies see the risks and opportunities of climate change on their businesses.

The 2018 results make for bleak reading.

Some (justifiably) see risks on an operational level, like whether Coca-Cola will be able to access water to make their drinks or whether the weather will get too hot for Disneyland visitors. Others, however, see brighter futures ahead. Home Depot is anticipating it’ll sell more air conditioners as temperatures rise, while Merck & Co. expect to sell more drugs as tropical and waterborne diseases spread northward in a hotter climate.

It’s nearly impossible not to look at these claims and fault them for a little too much optimism. Sure, some of us will probably buy more air conditioners in the near future, but will people have that luxury if they are fleeing heatwaves, droughts and/or floods? If access to water and food becomes difficult and therefore expensive, where will the money (not to mention energy) come from to buy and power an air conditioner? Will ordinary people or even governments be able to afford drugs for tropical diseases for the masses, or will these become a luxury only the rich can afford in their air-conditioned bunkers?

Let’s face it, these are not climate change strategies. These are overly optimistic coping mechanisms for companies that don’t really know where to start in the fight against climate change… or don’t want to, since many times the leaders of these companies won’t be around to see the effects of their inaction.

Real climate change opportunities go far beyond business-as-usual and look to urgently develop the systems and solutions that we need to avoid the worst effects of climate change.

Forward-thinking business leaders are not looking at how to sell the same things to the same markets, understanding and accepting that the markets of tomorrow will not look like they do today. Rather, these leaders focus on true climate change solutions as the main business agenda.

What do these solutions look like?

The New Climate Economy report of 2018 outlines five areas where strong growth can mean solutions to our shared problems. Apart from the sustainability of our world, the financial imperative is clear as well: growth based on low-carbon, sustainable solutions represent a US$26 trillion growth potential as compared to business-as-usual.

  1. Clean energy systems: From increasing renewable energy capacity, decarbonizing our transportation systems, increasing access to electricity, and ensuring the air we breathe is clean, energy systems will need to be entirely transformed in the next decade. And energy companies are seeing it as well. It may have started out as a traditional oil company over 50 years ago, but today, Finnish energy company Neste gets more comparable earnings from renewable products than from its oil refinery activities. They may still have a ways to go before they can boast being a truly sustainable company, but their vision for creating renewable fuels, solvents and bioplastics from waste materials is a company-wide transformation that keeps up with the changing times.
  2. Smarter urban development: It’s no secret that the world is getting more and more urban, with 6 new megacities predicted to join the existing 33 by 2030. How will these cities look, and how will the choices urban planners make influence the lifestyle options of the future billions living in cities? Businesses can also provide disruptive solutions that transform our urban lives: take mobility as a service, such as Helsinki’s Whim app. Whim aims to make owning a personal car less attractive by providing a one-stop solution for combining public transportation, city bikes, taxis and car rental on an as-needed basis, representing a total transformation in how mobility is organized.
  3. Sustainable land use: Agriculture accounts for roughly 10% of the world’s greenhouse gas emissions, and land change use for another 6%. Ensuring that we allow these natural resources to work with us, not against us, in the fight for climate change will not only create a natural resilience against extreme weather events, but also create jobs and ensure we can feed the world. One part of this equation is shifting how we think about farming. IKEA’s Lokal concept is just one of the many solutions being introduced to make use of spaces in cities, bringing food closer to the average city dweller and reducing the strain traditional farming has on the environment.
  4. Wise water management: Affordable access to clean water could be a fantasy for many in the future, unless major gains are made in how we use water across households, agriculture and industry. Fertilizer and garden solutions company Biolan is capitalizing on their expertise in dry toilet systems to help pave the way for more sustainable sanitation and water management systems, most recently by donating dry toilet systems to South Africa’s drought-plagued Cape Town, where it is already imperative that every drop counts. By doing so, Biolan also ensures that they are at the forefront of a new normal in the world of water and sanitation.
  5. A circular industrial economy: The past year has seen an explosion in public consciousness on the (mis)use and disposal of plastics. Along with plastic, the linear life of cement, steel and aluminium pose major threats for the fight for sustainability. Early this year Terracycle, along with a host of participating companies from Unilever to Procter & Gamble, launched Loop, a platform to enable traditionally disposable packaging to be returned to manufacturers, cleaned and reused. Similar coalitions of companies will be crucial to truly reimagine the way in which we use and value materials, and can have crucial brand and differentiation benefits to participating companies.

There’s no question that transitioning to a sustainable, low-carbon world will not be easy. But as the companies in the above examples have done, it’s also time for businesses to ask themselves: which is the bigger business opportunity, providing a bandaid or providing a cure?