What Leaders Can Do About Climate Change-Related Business Challenges
By Nathan Christensen, Mineral CEO
Portland, Oregon, is known for its mild climate. In June, the average daily high is 72 degrees. But in June 2021, Portland recorded a high of 116 degrees, 8 degrees higher than the previous record. But 2020 also had a record in store for Portland. That summer, wildfires spread across the Western United States, and in September 2020, Portland recorded an AQI (Air Quality Index) of 516, or beyond “hazardous.”
Our company employs 70 people in the Portland area and 50 more in the San Francisco Bay Area, which has experienced similar environmental extremes. These crises created hazards and disruptions for our employees—from home evacuations to power outages to travel restrictions to health conditions—that put their physiological, mental and professional well-being at risk.
As we all know, this phenomenon extends beyond the West Coast. The National Oceanic and Atmospheric Administration (NOAA) tracks weather and climate disasters, including those that cause more than $1 billion worth of damage (CPI-adjusted). According to this data, in the 1980s, the U.S. averaged 2.9 disasters per year, resulting in billions of dollars in costs. In the 2010s, that average rose to 12.3 per year. In 2021 alone, the U.S. has averaged 20 different billion-dollar disasters per year, a stark contrast from the averages from the decade before. Our company is familiar with these events, too, as we employ people in 32 states across the U.S. Like many businesses, it can feel like we’re navigating the impact of extreme weather or natural disasters on our employees on a weekly basis.
It’s tempting to dismiss this trend as a scientific or policy issue, but I argue climate change is also a critical business issue—one we should be talking about as a part of the “future of work.” Businesses need to adapt their people and talent strategies to account for the effects climate change could have on their organizations and workforce.
Here are three steps employers can take now.
1. Rethink your employee benefits.
We’ve seen first-hand that the effects of climate change can be dangerous and highly disruptive, especially when natural disasters hit. At our company, Mineral, we incorporated an “environmental crisis” policy into our benefits package. Any employee whose household is affected by a natural disaster that triggers an emergency declaration by local or state officials is eligible to receive a credit for up to seven nights of lodging. The policy also includes paid time off for volunteering in the wake of a crisis, as well as access to mental health services. Consider if it’s feasible to find ways to offer support for your employees if impacted by natural disasters.
2. Adapt to shifting talent markets.
Climate-related migration is already underway on a global level. There are signs that we may see an increasing number of “climate migrants” in the U.S. as well. In a recent Redfin survey, “nearly half of the respondents who plan to move in the next year said extreme temperatures or increasing frequency and/or severity of natural disasters played a role in their decision to relocate.” U.S. regions and cities that are expected to be more resilient to the effects of climate change, for instance, those in the Great Lakes area, are being branded as “climate havens.”
For this reason, climate change could influence the distribution of talent within the U.S. Employers should assess whether the geographies from which they currently hire are likely to be affected and, if so, consider how to broaden their talent pool. At a high level, we could see more people move inland to escape rising sea levels, north, to escape rising temperatures, and east, to escape increasing wildfires. In one stark example, scientists predict that rapid sea-level rise could make parts of Miami unlivable, displacing up to 800,000 people. If a business’ talent pool currently resides in a region expected to be severely affected by climate change, and its business model allows for it, the business should consider transitioning to a more remote or distributed workforce to recruit from other geographies.
3. Plan for disaster.
Whether it’s people, data, systems, products or processes that are most vulnerable, every employer should have a plan in place for how it will operate in the context of a natural disaster. The Occupational Safety and Health Administration (OSHA) recommends every business have an Emergency Action Plan (EAP) in place. Importantly, OSHA also recommends including employees in the development of an EAP and training employees for specific emergency situations before they strike. The shift to more remote work has added new complexity to disaster preparedness and may require employers to update their plans. Employers now need to monitor events in more geographies, as well as develop systems for assessing employee welfare and communicating information if a disaster occurs either at the office or at home.
Of course, preparation is only part of the equation.
Given the costs at stake, every employer also needs to do its part to prevent or mitigate further climate change. This is not just a matter of science; it’s also a matter of sentiment. According to the 2022 Edelman Trust Barometer report, people want to see businesses doing more to address climate change.
Businesses can begin by reviewing their own contributions to emissions, including electricity usage, heating and cooling, business travel and employee transportation, and then setting an emission reduction target and developing a plan for how to reach that target. Ultimately, the biggest impact will come if employers make addressing climate change not just programmatic but cultural, woven into the organization’s mission, vision, values or corporate social responsibility strategy.
Climate change is already creating challenges for both businesses and their employees. As the situation accelerates, it will play an increasing role in the distribution, expectations and well-being of our workforce. Business leaders will serve their companies and their employees well by adapting their strategies to both prepare for and help reverse the climate-based realities we face.