Mid-Term Group Assignment Table of Contents Question 1 ..................................................................................................................................................... 2 Question 2 ..................................................................................................................................................... 4 Question 3 ..................................................................................................................................................... 6 References ................................................................................................................................................... 10 Group 4 1|Page Mid-Term Group Assignment Industry Sector Researched: I. II. Technology and Startup companies Manufacturing Question 1 What is the impact of climate change on business? Do companies feel pressure from consumers to change their business habits towards more sustainable solutions? How are consumers driving climate solutions with their spending habits? Does this vary by generation? Environment is a crucial element in any company’s strategy. But how companies respond to the growing demand to address climate change varies across industries. Among technology companies, climate change has a tangible and increasingly critical effect on its strategic business management — it is a business continuity issue, it is a cost issue, and it is also a core strategy issue. It is high time that we consider the impact of climate change on IT (Technology and Startup companies). Climate events do not only have an impact on lives. Significant events can affect the continuity and survival of industries and businesses, especially when they affect information technology systems. It is worth mentioning the fact, while our heads (and data) might be in the cloud, ultimately our IT and technology infrastructure lives right here on a planet that is facing an existential crisis. Environmental concerns in general, and issues regarding climate change in particular are moving from the realm of corporate environment health and safety (EH&S) personnel into that of corporate financial strategy which involves chief executive officers and chief financial officers as well as board of directors. Climate change has become a major financial risk due to the efforts of the Task Force on Climate-related Financial Disclosures (TCFD) in raising corporate and regulator awareness of climate change as a financial risk and to make recommendations for disclosure of climate-related risk. In many jurisdictions around the world, mandatory climate risk disclosure has gained traction due to the Task Force's work. Group 4 2|Page Mid-Term Group Assignment If we take a closer look, Critically, the technology industry is comprised of many different subsectors with climate risk and disruption occurring at more micro levels. The assessment of climate risks should therefore be tailored to the particular needs of each company. Moreover, companies feel pressure from consumers to change their business habits towards more sustainable solutions that is the reason we’ve seen a notable increase in the number of technology companies disclosing carbon reduction targets. Approximately 70 percent of tech companies now disclose carbon reduction targets in their reporting. Any leading technology company that does not yet report carbon targets is now clearly out of step with global good practice. Climate change is a huge factor when it comes to Manufacturing Sector as well, from the initial stage of manufacturing a product to the final form the organization has to comply with environmental and pollution controlling aspects, which are heavily based on climatic changes. Climatic changes always have a heavy impact on the industries, demanding them to implement new techniques or improve present manufacturing techniques which always involves a huge amount of money. Yes, Companies are extremely pressurised from the Consumers and Government for more sustainable products and services. The best example for this is, Volkswagen Audi Group. They were pioneers of Internal Combustion Engine Vehicles and no they are giving up on their own technology and started to research and work on more sustainable Electrics cars. This is a very diverse topic and there are a lot of people who are environmental conscious and contribute to the prevention of climate change by purchasing organic and recyclable products that disintegrate in a landfill. These include Baby Diapers, Dog Litter bags, and recyclable packaging. This seems to be improving as the generation progresses. The newer generation is more inclined towards climate change, and it could be due to the fact of education and exposure to it a very early stage of their life. Changing consumer behavior in response to climate change is complex, and many consumers are not capable of determining which behavior changes are worthwhile. Group 4 3|Page Mid-Term Group Assignment Question 2 How are businesses adapting to the increase in scarcity of resources? How are businesses adapting their products towards green alternative products? It is irrefutable fact that the green economy has a resource-scarcity problem. The world is at a tipping point when it comes to sustainability with thousands of companies simultaneously shifting to more sustainable practices and innovating new products and services to enable sustainability. The need for sustainable resources is becoming urgent considering demanding transparency and accountability by consumers, setting legally binding targets by the government, and bold commitments of the companies. New solutions, however, will inevitably exacerbate bottlenecks in the very infrastructures, resources, and capabilities they depend upon. While the supply of these sustainability-related resources will expand due to investment and innovation, in many categories rapid growth in demand will likely outstrip supply, heightening competition and pushing up prices. Businesses that think ahead will devise a plan for delivering on their promises, securing the necessary inputs, and capturing the value of sustainable business models. Considering tech and start-ups companies when it comes to combat this problem, companies start identifying where, when, and how significant scarcities will emerge in their ecosystem. Moving forward they focus on strategies that they can adopt to overcome resource scarcities. A portfolio-based approach to resource scarcities is on the rise, allowing companies to pick and choose the strategies that best suit their business model. From our research and findings, we have found that the first step in identifying, overcoming, and creating competitive advantage in cases of resource scarcity is to use sustainable business model innovation (SBM-I) followed by the eight portfolio-based strategies to yield the best results. SBM-I enables companies to combine environmental, societal, and financial priorities; reimagine their core business model; and turn sustainability into a competitive advantage. Eight core strategies that leading companies are adapting are: ⎯ Secure the supply: Select and contract with suppliers to mitigate a shortage and create a more resilient supply chain. Group 4 4|Page Mid-Term Group Assignment ⎯ Own the origins: Acquire supplies or invests in companies developing alternative resources. ⎯ Force innovation: Innovates alternatives to address scarcities or bottlenecks. ⎯ Extract value: Capture value through price premiums or build new businesses to need. ⎯ Broaden the market: Advocate for public policy that enables technology innovation, expense supply, or incentives alternatives. ⎯ Seed the market: Invest in early-stage technologies and new companies that address scarcities. ⎯ Arbitrage the options: Create value from different supply and pricing dynamics across geographies. ⎯ Act collectively: Participate in industry and cross sector coalitions to address supply constraints. Businesses are also adapting green alternative products as a primary strategy for offsetting greenhouse gas emissions and to reduce their operations’ negative environmental and social impacts. The go green movement is strong here in the North America. From large multinational companies like Walmart to my local coffee shop, sustainable business practices are cropping up everywhere – including the tech sector. Based on our research, technology and start-up companies are doing remarkably well in this field. Giant tech companies like Google, Cisco, Dell, Intel, Adobe, etc. have comprehensive sustainability plan in place, including some rather creative eco-friendly measures. Google started switching to carbon free energy equipped data centres in early 2000 and announced as a carbon neutral tech company in the year 2007. Cisco is another eco-friendly leader in the tech industry has the highest percentages of telecommuters. Telecommuting saves money in energy costs and reduces tailpipe emissions by eliminating commutes. Intel, the Greenest Company in America (Forbes, 2010) has taken the biggest ecoinitiatives in the green energy arena. According to Forbes, 51% of Intel’s annual energy consumption comes from renewable sources like solar, wind, geothermal and biomass. Manufacturing Businesses are adapting to new techniques from waste reduction to developing and implementing less-resource based products. As the world population is increasing, there is a direct proportion of resource scarcity for the natural resources. As the scarcity issue is increasing, Group 4 5|Page Mid-Term Group Assignment the cost of supply of the resources is rising too. Despite the situation, many firms have relied on their outdated planning system that fail to account for the rising prices and the supply chain. Many firms need to tend to focus on areas such as a) Using resources efficiently or reusing them. b) Exploring other alternatives for the resources. c) Securing supply chain d) Trying to change the business model. Companies that go into a change in business models in order to lean towards the “green” products and try to change their manufacturing methods and practises are: IKEA is one of the finest companies and one of the first retailers in their industry to get into renewable energy resources and waste management. They were the first ones to sell the LED Bulbs and lighting fixtures in their stores. IKEA have installed more than 250,000 solar panels that accounts 90% of their facilities and also, they have two wind farms located in Texas and Illinois that generate 3 to 4 times the renewable energy needed to power these locations. They have planted 2.4 million trees in American forests to further offset CO2 emissions, and they only land 15% of their waste in landfills. Question 3 How should companies respond to the increase in climate change activism? What kind of ethics will companies have to incorporate into their practices? Is fresh air and clean water a human right? How will companies respond if this becomes a universal right? Companies are coming under more and more pressure to address climate change activism as it continues to be a worry for people all around the world. There are many ways that businesses might respond to climate change activism, but it's crucial for them to think about their particular situation and what they can actually do to address the problem. Group 4 6|Page Mid-Term Group Assignment The companies can respond to environmental action by becoming more transparent. This may entail revealing their emissions statistics, establishing emission reduction targets, and tracking their success in achieving those targets, this may entail discussing and cooperating on climate change solutions, assisting with campaigns to raise understanding and to educate the public about the issue, and joining forces to promote climate-friendly legislation. Each business will have to think about how it fits into the world and what it can actually do to combat climate change. But businesses may demonstrate an engagement by acknowledging this crucial concern by increasing clarity, making investments in sustainable energy, and interacting with activists and other stakeholders. The type of ethics that businesses must include into their procedures will mostly depend on their personal viewpoint. This can assist in lowering emissions, generating employment in the clean energy industry, and demonstrating a commitment to combating climate change. Businesses can be in response to climate change action. Companies that are dedicated to combating climate change, for instance, will need to implement ethical practices that support their objectives, Technology and start-up industries for instance can do efforts such as lowering emissions and investing in sustainable energy. Other businesses that are less dedicated to fighting climate change may not need to adjust their operations as drastically, but they still need to be conscious of the ethical ramifications of their choices. Manufacturing businesses, on the other hand, have a broad area and giving them the right pace toward the audience is the best way to grow in the market. The manufacturing industry should respond to these factors. The best way to assess a country's greenhouse gas emissions is to consider its influence on the environment and the globe. A corporation must be examined to determine which production processes produce the most pollution research is complete, businesses can start considering ways to reduce their emissions. Next, manufacturing companies need more power and consume more energy, so reducing them also can help with climate change activities. Renewable energy is becoming increasingly popular among consumers, and it also offers businesses an intriguing answer. Companies like ekWateur or Enercoop offer an intriguing way to use entirely renewable energy. Moreover, the manufacturing department can choose more Group 4 7|Page Mid-Term Group Assignment environmentally friendly products. For example, new printers, air conditioners, bulbs, materials, and laptops, so these manufacturers need more equipment. Providing them with more efficient, energy-wise, standard products will benefit the company. Manufacturing companies’ strengths are their employees and their customers and setting up best practices for the customers and for their organizational staff is a must. Manufacturing companies mostly require a lot of risks, so companies should give employees a high amount of health and safety practices, companies should give them the right benefits and compensation, companies should give customer values about their demands by following the latest technologies with high quality, integrity in management ethics, customer and personal integrity. Although clean air and water are necessary for human life, but they are not generally regarded as universal human rights. Companies would be compelled to offer these resources to everyone, regardless of their ability to pay, if clean water and fresh air were made universal human rights. This would probably have a big effect on businesses, especially the ones that work in the polluting industries. In order to comply with the new rights, these businesses would need to make considerable adjustments to their processes, which might be expensive and challenging. Generally speaking, firms are likely to be significantly impacted by the rise in climate change activism. Businesses will need to think carefully about how they might address the problem and integrate moral principles into their work. In order to comply, businesses would need to make considerable adjustments to their current procedures if access to clean water and air were made a fundamental human right. In manufacturing industries, production emits lots of carbon and other chemicals which harm the environment and people’s health and having fresh air and clean water is a fundamental human right. Companies should start to focus on clean water and start manufacturing green products to save the universe from chemicals. Manufacturing should attract customers by giving them the right to live, and safe, clean, healthy, and sustainable environments. For example, in one article the world bank states that manufacturing start making the transition to clean fuels and stoves to meet the UN Sustainable Development Goals by 2030. This would cost about $US 5 billion annually. This is an excellent investment given the advantages to women's health, time savings, Group 4 8|Page Mid-Term Group Assignment linked income potential, quality of life improvements, less air pollution and greenhouse gas emissions, and decreased stress on forests (Boyd, Para. 17, 2019). Group 4 9|Page Mid-Term Group Assignment References Boyd, D. R. (n.d.). The Human Right to Breathe Clean Air. Annals of Global Health, 85(1), 146. https://doi.org/10.5334/aogh.2646 Dunlop, C. (2019, December 12). 12 tech companies who are proactive about being green. AuthorityLabs. Retrieved November 8, 2022, from https://www.authoritylabs.com/green-techcompanies/ Embry, E. (2019). Climate change and entrepreneurship. Handbook of Inclusive Innovation, 377–393. https://doi.org/10.4337/9781786436016.00032 The green economy has a resource-scarcity problem. Harvard Business Review. (2021, July 9). Retrieved November 8, 2022, from https://hbr.org/2021/07/the-green-economy-has-a-resource-scarcityproblem KPMG. (2021, July 1). Climate risk for the technology industry. KPMG US. Retrieved November 8, 2022, from https://info.kpmg.us/news-perspectives/industry-insights-research/climate-risk-forthe-tech-industry.html Leendertse, J., Rijnsoever, F. J., & Eveleens, C. P. (2020). The sustainable start‐up PARADOX: Predicting the business and climate performance of start‐ups. Business Strategy and the Environment, 30(2), 1019–1036. https://doi.org/10.1002/bse.2667 Thøgersen, J. (2021). Consumer behavior and climate change: Consumers need considerable assistance. Current Opinion in Behavioral Sciences, 42, 9–14. https://doi.org/10.1016/j.cobeha.2021.02.008 Young, D., & Beck, S. (2022, October 14). Solving the puzzle of sustainable resource scarcity. Canada EN. Retrieved November 8, 2022, from https://www.bcg.com/en-ca/publications/2021/how-totackle-resource-scarcity Yahoo! (n.d.). Ikea US and American forests create a child-oriented 'forests' video to be shown in IKEA stores across the US. Yahoo! Finance. Retrieved November 17, 2022, from https://sg.finance.yahoo.com/news/ikea-us-american-forests-create-110000202.html Group 4 10 | Page
