2020 was set to be the year that climate change would take the spotlight on the world stage. Major companies like Microsoft and Delta kickstarted the carbon pledge trend, announcing aggressive targets to take control of their carbon footprint and setting an example to other companies. By March, however, COVID-19 had taken over as the biggest immediate threat to society and we saw the impact that global crises can have overnight, teaching the corporate sphere invaluable lessons about risk mitigation. The European commission has forecast a deep recession, with the UK economy alone set to shrink by 10%. But whilst the pandemic has certainly made a dent in global GDP, climate change is estimated to make an even bigger impact, causing global GDP to decrease by 2.5%-7.5% by 2050.
While climate risk remains an often overlooked or undervalued factor in risk management programmes, there is an urgent need to integrate resiliency into core business strategy if businesses want to continue to thrive — or even remain operational. The current COVID-19 pandemic, specifically, has emphasized the importance of prioritizing resilience by exposing the fragility of global supply chains and dysfunctional systems across businesses and forcing them to change the way they plan and operate to factor in large-scale crises. These learnings must now be applied to similar risk brought about by climate change; businesses need to prepare for the impact of devastating weather events on supply chains and infrastructure they rely on to remain safe and operational.