Finance & Investment

Climate Preparedness:
From Crisis Springs Opportunity

Having the systems in place to respond to and (in some cases) capitalize on climate change impacts will ultimately determine which businesses succeed and which fail.

Brand Provided | By Chris Yoko | Published 1 day ago | About a 5 minute read

Image: The Exchange TRX in Kuala Lumpur incorporates climate-resilient and adaptable features in its design, construction and operations. | The Exchange TRX

While climate change may not be a priority for the new presidential administration, research increasingly shows that climate resilience is key for business success. It’s hardly a surprising outcome: Climate change is the new economic reality, and businesses that can adapt — just as they’re adapting to developments such as artificial intelligence (AI) — will be the ones that can win the day.

It’s the new reality of doing business: Whether you’re a mom-and-pop restaurant or a Fortune 500 company, climate change is going to impact and disrupt your business operations — whether through direct weather emergencies or distant supply chain disruptions. Just as AI is shifting the speed and efficiency at which companies operate, climate change is forcing companies to do the same — in many cases, slowing them down as they adjust to disruptions.

And while companies across industries have spent millions of dollars adopting and adapting to AI, not nearly the same economy-wide investment has been given to climate preparedness. But these coming changes will affect everyone, regardless of industry. Being prepared and having the systems in place to respond to and (in some cases) capitalize on climate change impacts will ultimately determine which businesses succeed and which fail.

Preparing for climate disruptions

Last year, climate-related natural disasters cost the US over $92 billion and have been slowly whittling away at the country’s GDP — as increasing fires, flooding and other extreme weather events disrupt the daily operations of countless businesses. The impacts can range from minor — ex: offices shut down for a few days as local employees brace for a hurricane — to devastating, as more and more Los Angeles-area business owners can now attest.

Businesses need to have mitigation strategies in place in order to respond most effectively. For corporate businesses, this may look like creating an emergency safety plan — one that helps them to avoid the tragedies we saw across multiple states after Hurricane Helene. It may be an extra task for the HR team, or even an additional member who can think through and manage emergency response and systems flows.

Tech companies, meanwhile, many need to consider contingency solutions: If a fire threatens company servers, what backups are in place to ensure customer service is not impacted? How and where will that web traffic be redirected, and what cybersecurity consequences and vulnerabilities will follow that switch?

Even something as local and small as mom-and-pop restaurants are having to think through supply chain issues — sometimes, across the world. If a typhoon in the Pacific Ocean or a drought in Europe can disrupt access to a staple as basic as rice, perhaps they need to rethink their menu — something many restaurants have already started to do.

From crisis springs opportunity

Alternatively, there are areas where businesses may be able to capitalize on climate-related disruptions.

Famed hedge fund manager Michael Burry has gone in on water as the next commodity to invest in — reasoning that its value will increase as extreme weather creates more drought and supply issues. Burry is not alone in his logic; the financial modeling behind different commodities investments — as well as the portfolio adjustments that will need to be made as these commodities are impacted by weather — is a huge area of opportunity that companies and investors are pursuing.

Even the less predatory versions of this climate-related projection — doing risk assessment for economic development funds, for example — are increasingly being shaped by individuals and companies that have a grasp on climate change's enormous current and future impacts. Entrepreneurs and business leaders who can capitalize on these predictive models, which can forecast everything from where to store energy to how to design and retrofit buildings to increase resilience, can lean into the curve caused by climate.

Climate change is just like AI, in this way: We’re sitting at the precipice of a transformation that will fundamentally reshape how our economy operates. Businesses and individuals that are able to forecast the effects of, and the needs created by, our climate-changing world will possess a major first-mover advantage — one that not everyone will be prepared to capitalize on.

Unlike AI, however — which has everyone and their cousin running to figure out how to leverage it — climate resilience sadly isn’t inspiring the same zealousness.

Workforce considerations

Aside from the long-term viability reasons, here’s another reason climate adaptation should be receiving the same attention given to AI: The next generation of top-tier workers are deeply invested in their climate future.

Gen Zers are the climate generation; they understand that their future is integrally tied to how the world responds to climate change in the next few years. Not only does it shape how they vote and act as consumers — it changes how they show up to job interviews, as well: 23 percent of Gen Z workers would consider taking a lower-salaried role at a company that is embracing climate action, while 48 percent said they would leave a company that wasn’t meeting its climate commitments.

Proactivity around climate adaptation is essential, and it breeds effective management — the kind that’s willing to think outside of the box to be prepared for every incident and opportunity.

Climate change is here. Are our business leaders prepared?

Chris Yoko

Chris Yoko is the founder of digital agency Yoko Co and Carbon Off — a platform that enables forward-thinking companies to offer carbon offsets as an employee benefit.

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Climate Action