A Considering the Crisis of Climate Change and the Responses that Companies Should Take
As many have pointed out so far, measures against global warming can be a business opportunity, and many companies are moving towards its realization. On the other hand, the momentum of global greenhouse gas emission growth has slowed due to the economic downturn, and some countries are predicting that it will start to decline, and the global warming problem appears to be heading in the direction of solving the problem ‘at first glance.’ As a result, interest in measures to combat global warming has diminished and the importance of measures to combat global warming has diminished. Therefore, this study intends to discuss how companies should recognize global warming in order to appeal again to the need for global warming countermeasures. In particular, we need to focus on the aspects of risk and recognize the issues of corporate governance and global warming. In business operations, risks associated with global warming are often classified into three categories: (1) physical risks, (2) regulatory risks, and (3) market risks.
Physical risk can be defined as the risk that physical phenomena caused by climate change, such as sea level rise and abnormal weather, affect a company's business activities. For example, factories located in coastal areas risk flooding and shutting down operations due to rising sea levels, and there is a risk that rising temperatures and drought will affect harvests in agriculture, forestry and fisheries.
Regulatory risk can be defined as the risk that greenhouse gas emission regulations and energy management regulations to avoid global warming may limit business activities or impair business profitability. Representative risks include emissions trading systems and environmental taxes, and are the most easily imaginable risks associated with global warming. We must thoroughly examine the various regulatory trends and consider their impact on our company.
Market risk can be defined as the risk that changes in social and consumer demand due to global warming will reduce or disappear business opportunities. This includes the risk of significant damage to our reputation in the global warming sector due to inadequate responses to physical and regulatory risks, and consequently loss of support from society and consumers. When considering market risk, it is important to assume changes in social and consumer demand. These changes may arise due to physical and regulatory risks. Therefore, to understand the impact of market risk, both physical and regulatory risks must be considered.
Currently, many companies are still waiting and waiting to respond to the global warming problem. Waiting and continuing to watch increases the risk. A real wait to respond to the risk of global warming will be carried out after completing the preparations mentioned in this study.