By now, we all understand that climate change is a business issue. The way the companies think about the environment - everything from recycling to plastic use to how often and far employees and executives travel - impacts the world in which we live.
But climate change is no longer a social (Millennials don’t want to see plastic water bottles in the conference room) or political issue for boards to consider. There are legitimate economic and risk-based implications to companies as it pertains to our climate. For example, in 2019, fifteen weather events caused $130 billion in financial losses. Sea level rise alone is forecast to cost the global economy some $43 trillion by 2100.
As we have studied the climate over the years - actions humans can take to preserve it, what we are doing to harm it, and the impact our behaviour can have - we have seen that there are many lessons that we can take away personally. This is particularly true when it comes to businesses and corporate boards (yes, hear us out) - there are best practices that business leaders should apply to their organisations that parallel what we know about the environment and our climate.
Diversity is imperative.
We all know that trees are good for the planet - they have a natural ability to absorb CO2 and keep our air clean. We want to save our forests to protect wildlife and keep our air clean. But it’s not that simple - there is a science behind how trees grow together. Planting trees - or reforestation - must happen under diversified conditions. This is for two reasons - forests composed of several species are more resistant to climate and natural hazards, and they provide more ecosystem services than single-species forests. Ultimately - diverse forests perform better and are best able to prevent ecosystem failure.
Similarly, diverse organisations and diverse boards perform better, bringing together different perspectives and propelling businesses forward. Board rooms filled with individuals who come from the same industry or background, race or gender, are not best suited to see - or solve - the various problems that may arise. Further, according to a study by Harvard Business Review, the board’s culture can affect how well diverse boards perform their duties and oversee their firms. Having multiple perspectives not only represented but heard means there is a better chance of getting ahead of the number of risks, consequences, and implications of actions the board may take.
Climate change has increased rapidly because of the lack of efficiency in so many products. Cars emit harmful gases, light bulbs give off far more energy than needed - making electric bills increase, and homes and buildings bleed energy. Of course - many changes have been made to address these inefficiencies directly. Electric cars have reduced greenhouse gases, LED lights use 90 percent less energy than fluorescent bulbs, and modern insulation makes homes more energy-efficient. All of these steps matter in the fight against climate change.
Efficiency also matters in the boardroom. Gone are the days where board members want - or need - to fly across the country for a four-hour meeting, print out books of materials to prepare, and vote on issues in person. Boards now can go digital - they can conduct board meetings virtually and securely, saving time and money for all involved - ultimately making the board more efficient and effective. And there are additional benefits from board efficiency that directly impact the environment. Shaparency has partnered with Ecologi, and is planting a tree for every corporate board that commits to going digital. It’s easy - and makes sense - to think about efficiency regarding the boardroom and our climate.
Nurture the space you’re in.
Climate change is a business issue, and board members can learn lessons from those who study our climate. After all - each board is its own ecosystem, and it needs to be nurtured and taken care of to function properly. So think about that the next time you’re in a board meeting - or any meeting. If you don’t take care of the space you occupy - treat individuals with respect and protect the environment where you work - then it will start to fall apart, not function as it was made. Let’s take these lessons from climate change and think about how they apply to our lives and our businesses.