How to Develop a Climate Change Plan

How to Develop a Climate Change Plan

Managers can learn from different strategies when considering how to deal with climate change in their business.
Lauren Rakowski May 27, 2010
Until the late 1990s, companies focused on political responses to climate change, usually to oppose new regulations. By 2005, they used market strategies to find opportunities or mitigate risk.

Research by Ans Kolk and Jonatan Pinkse identifies market strategies companies used in response to climate change in 2005. They examined corporate climate change strategies for 136 Global 500 companies (the 500 largest companies according to the Financial Times), provided by the Carbon Disclosure Project. Using cluster analysis, the researchers formed groups or "organizational configurations" to create company profiles based on average cluster values across six dimensions.

Several company profiles emerged. Many companies were considering reducing emissions, but had not yet implemented change. Some seized climate change opportunities within their company, along their supply chain, or beyond their current markets. Others mitigated risk by entering the emissions market. Increasingly, managers chose between innovation, such as more energy-efficient production, and compensation, such as the purchase of emissions credits. Managers can learn from these strategies when considering how to deal with climate change in their business.

For managers, it's important to develop a climate change plan that is strategically sound for your company. Some options include: Kolk and Pinkse suggest future research examine development of climate change strategies as regulation increases and emissions markets evolve. What climate strategies are most appropriate for different industries and organizations? How do stakeholders respond or engage? What factors lead to successful ventures into new markets? Research on these questions would provide valuable insights for business and policy makers.
Kolk, Ans, & Pinkse, Jonatan. (2005). Business Responses to Climate Change: Identifying Emergent Strategies. California Management Review, 47(3): 6-20.

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