One of the greatest challenges for companies in implementing their climate change and sustainability strategy revolves around implementation across operational business units and key functional areas. These include - IT
- Supply chain
- Facilities.
Climate change and sustainability-related issues are associated with physical risks linked to the physical impacts arising from climate change. This can result in damage to infrastructure and assets, reduced asset life and increased maintenance expenses, which can have the effect of increasing insurance premiums. Another significant operational risk is the rising cost of energy, which is one of the largest operating expenses for many companies. A company’s response to climate change and carbon reduction — a risk area — is also an opportunity to reduce energy costs through implementation of efficiency measures. Value chain risk associated with customers and suppliers is a growing operational risk area. Everyone is part of someone else’s supply chain. Many companies are working directly with their suppliers with the expectation that the suppliers will provide the customer with sustainability performance information, including their carbon footprint, water and waste information and sustainable labor policies. S ome companies are now required to complete a lifecycle greenhouse gas assessment of their products and to provide this information to their customers. Some companies are also being asked to disclose their plans for reductions in carbon content and costs. For all these reasons, companies are now focused on supply chain as both a risk area and as an opportunity to enhance operational efficiencies. | 