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MGMT8420 Sustainable Management

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Ans 1) Climate change as threat Climate change can affect the prices of raw materials and business costs: Due to changes in the climate, the prices of many natural resources used as essential materials for products an ...

Ans 1) Climate change as threat Climate change can affect the prices of raw materials and business costs: Due to changes in the climate, the prices of many natural resources used as essential materials for products and services may get affected as occurrence of abnormal weather patterns can destroy the farms of habitats required for them to grow. Other issues like forest fires, droughts, rising sea levels also affect business activities and will continue to do so. For example due to climate change, sea level temperatures have increased and threatened to destroy naturally occurring ecosystems thus putting the sea food business with its back against the wall due to the depleting fish stocks and reserves ("Climate Change Threatens the World’s Fisheries, Food Billions of People Rely On", 2020) Risks due to changes in regulations, technology and markets: Changes in regulations thanks to pressure being put on governments and corporations by consumers and environmental bodies is a huge threat to businesses. Regulatory changes like the one in EU which made the emission norms much stricter for the automobile industry meant that a lot of companies had to suffer losses and setbacks as they had to redevelop products and manufacturing lines to adapt to the changes. ("CO2 emission performance standards for cars and vans (2020 onwards) - Climate Action - European Commission", 2020) Climate change as an opportunity Opportunity to introspect and improve business model and strategies: Climate change provides businesses an opportunity to forecast and act proactively. This helps businesses save costs by being more efficient as they can re-evaluate and analyze current business practises and strategies. Volkswagen after its “Diesel gate” scandal, other European carmakers have considerably changed their business model with Volkswagen announcing to phase out internal combustion engines by 2026 and switching to electric cars. Opportunity to lead and innovate: Climate change provides business an opportunity to innovate and gain a competitive advantage by creating new markets, technologies and processes. For eg. companies like Tesla have created a new market thanks to its innovation and gained the first mover advantage. It has also pushed other car makers into frenzy and developing their own electric car portfolios. [ CITATION Tho19 \l 4105 ]

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