Climate change presents enormous challenges for the world, and for organizations that are accustomed to doing business in an environment on the verge of radical transformation. The United States' decision to withdraw from the Paris Agreement has added a new complication. Global Network Perspectives asked experts across the Global Network for Advanced Management about impact of climate change—and the U.S. withdrawal—in their regions.
What are the long-term risks—both of business and the environment—in your region from climate change?
The very nature of the Philippines, being an archipelagic country located at the typhoon belt of the Pacific, leaves it vulnerable to the immediate and long-term effects of climate change. The country is rich in natural resources and these are all in danger of being destroyed by the long-term effects of climate change. Droughts occur when the temperature of the ocean is beyond its average range, which in turn makes weather events difficult to predict. High sea surface temperature also creates more powerful storms, since they gain they strength from warm water. Droughts and floods will devastate existing the agricultural industry of the country, which currently employs 27% of the labor force. Tourism contributes around 9% to the gross domestic product of the country and that is in danger as well, as the majority of tourists visit the country to enjoy the beautiful beaches, which may not stay that way for long. The acidification of the oceans could lead to the death of coral reefs, which are home to diverse mixtures of aquatic life.
Businesses are dependent on the infrastructure of the state, and the long-term effects of climate change could dramatically increase the costs of maintaining their current value chain. The acquisition of commodities is an issue that businesses should be concerned about since climate change will affect the sources of such materials. The majority of the goods arriving in the Philippines are shipped, and unstable weather conditions could make the routes of these vessels treacherous given the idiosyncrasy of typhoons in the region. They key for businesses is to develop cost-efficient and resilient systems that will enable them to reduce their waste products and aid in slowing down the rate of climate change. If their stubbornness to adapting to climate change resilient persists, the cost of maintaining their operations under a very hostile environment could force them to close. Small and medium-sized enterprises would be the most affected by this and so they must come up with creative, cost-effective solutions in order to survive.
How much are employees and consumers holding companies accountable for their business's stance on climate-related issues?
As people all over the world are becoming more educated regarding climate change, they have started demanding products and services that have less of an environmental impact. They will also demand from their employers more climate neutral work environments. That said, the Philippines is a developing country with a multitude of issues to face. Many people live under on around the poverty line and are struggling to provide for their families. Although these people are by and large also the most vulnerable to the effects of climate change, it would be an illogical—perhaps even unethical—stretch to expect these people to incorporate climate change as a relevant factor in their decision-making process. That said, the emerging middle class in the country is aware of the issues and has the economic power and the will to choose for more climate neutral products and services if made sufficiently aware of the available choices.
What impact, if any, could the U.S. leaving the Paris Agreement have on your country or region?
The United States has played a significant role in most of the global events in the past couple of decades, whether it be related in conflict or humanitarian action. The Paris Agreement was a significant global agreement for signatory countries to signify that they stand by each other to support a common goal. In acts or agreements like these, the international community is responsible in policing each other with regards to the pledge they made and purposely keeping away from such agreement only alienates that country from the signatories. That said, the absence of the United States in the Paris Agreement may be quite a headline, but in terms of impact to other nations, it will probably be minute. More than anything, the agreement is for the benefit of the signatory’s country and the world. Even if the U.S. may not be part of it, all the other signatory nations see its importance and will most probably honor it. If anything, all the US did by not being part of this agreement is alienate itself for their own supposed personal goals of helping their own citizens first.