Climate change is a real business risk that can be managed.

 In recent weeks we have seen U.S. Senators call climate change ‘ideology’, but overwhelming evidence reveals climate change as a real business risk – one that can, and must, be managed.

A 2019 study in Nature Climate Change showed that the U.S. alone could lose USD 520 billion across 22 sectors due to global temperature rise. A 2023 analysis reveals profound vulnerabilities to climate change across the country.

Risks fall into three groups:  physical, transitional, and liability risks. Physical threats include flooding, hurricanes, drought, and wildfires – symptoms of the climate crisis which can impact businesses directly through damage to products, premises, and infrastructure. Transitional risk comes with the introduction of regulations designed to address climate change and changes in consumer spending as more climate-friendly products become available, and blame is attached to companies that have failed to act. Companies that pollute are obviously exposed to liability risks. But so are companies that fail to consider future climate change in their products and services.

At Vireo, we are working to gain market and regulatory acceptance of biobased, recycled, and advanced technologies that reduce climate impacts and, therefore, lower business risk. We rely on scientific evidence and data to assess the safety and other impacts of new and emerging substances, ingredients, and technologies.  Our work is very specialized and technical and aims to reduce health, safety, and environmental risks.

The process of robust ESG and sustainability demonstration, reporting, and certification can reveal both potential risks and potential opportunities. Companies can identify the most impactful actions to mitigate their climate change risk. They can effectively communicate the value of these changes to their stakeholders and demonstrate compliance with emerging regulations. They can also discover and demonstrate benefits over competing technologies.