The Impact of Climate Change on Small Business

Owning a small business can be immensely rewarding—and overwhelmingly stressful. However, your success is affected by far more than your own decisions. In fact, many outside influences can impact a small business. These influences can come in the form of people, the local and national economy, and even environmental changes. Climate change’s impact on small business operations can be significant, and it is beneficial to understand what these impacts are, and what you can do about them.

How Climate Change Affects Small Business

The effects of climate change can be felt by everyone. Similarly, companies, no matter the size, can contribute to global warming. However, the impact of climate change can significantly impact smaller businesses. understanding what global warming is, how it affects you, and ways to minimize the impact on your business can ensure that your business works to reduce climate change.

Climate change can affect a small business on multiple levels. Small businesses often have a lot more to lose than larger companies, especially those that have the finances and resources to risk some of the negative effects created by climate change. Understanding how climate change can impact your business can help you prepare and develop solutions to prevent issues.

Unwanted Additional Expenses

Finances are a chief concern of businesses of any size, but finance issues can make or break a small business. If climate change continues to worsen, this could cause governments to enforce different mitigation responses, which could result in businesses taking on the associated costs. A possible example of this issue could be the required implementation of green energy in the form of solar, wind, or geothermal power.

While green energy solutions are a great investment for any size business looking to minimize their negative effects on the environment, the startup costs associated with these upgrades can be significant. If your business is not prepared to take on green energy costs, climate change could force your hand and negatively impact your financial standing.

Insurance Impacts

Climate change could also impact the type of insurance coverage you need for your small business. Climate change is causing an increase in the severity and occurrence of severe storms. If you live in an area that is commonly impacted by severe storms, you may need to invest in higher insurance coverage, including disaster coverage. Disaster coverage is essential to restore your business in the aftermath of a flood, tornado, earthquake, or other severe storms. If the likelihood of these severe storms continues to increase, so will the price tag associated with this coverage.

Operational Impacts

As you know, a small business is much more than what customers see and experience. A small business relies on several moving parts to achieve success. This can include manufacturing, inventory, transportation, and many other operational branches that all come together to keep a business running. Climate-related disasters could impact any part of this chain from production to warehousing.

Necessary Building Upgrades

Climate Change

Climate change can result in the increase of a variety of natural disasters such as hurricanes, tornadoes, and other extreme storms. Even in areas that aren’t impacted by natural disasters, the increase in temperatures has been experienced everywhere. In many areas, extreme heat can prevent people from coming to work without mitigation efforts in place. To accommodate the potential risks associated with climate change, small business owners may need to invest in significant upgrades.

If severe storms are a significant issue in your area, you’ll want to have certain policies and procedures in place. In addition to general guidelines concerning what to do, you should also have a safe place for your employees or customers to utilize if necessary. This could include incorporating steel structures within the building, adding a safe room, or investing in sealant to minimize the impact of flooding. Even heat-associated mitigation efforts may be necessary, including new or upgraded cooling systems. As a business owner, the responsibility of keeping the building itself and the people within it safe and secure.

Productivity Losses

Productivity is vital for any business, but especially for smaller businesses that rely on just a few employees to keep the business operating effectively. If climate change continues to impact the environment, this could lead to an increase in employee sickness and injury. An increase in pollution can affect air quality by increasing the number of allergens in the air. Those with respiratory issues such as asthma can be most significantly impacted.

Significant climate changes can also increase the risk of infectious diseases. Higher temperatures could lead to extreme heat, which is another serious health risk. A lack of resources may be the result of all the above issues, including difficulty securing food and water supplies. A decrease in accessible resources, an increase in temperatures, and an increase in airborne pollutants could all significantly impact the health of your employees as well as the overall productivity of your business.

Consumer Demands Could Change

A small business can only thrive if the consumer base continues to need its products or services. Climate change could impact the shopping habits of consumers, which could prove beneficial or harmful depending on the business. Shifting price points as well as changes in weather can impact what consumers choose to purchase. For example, if temperatures continue to rise, demands for cold-weather products could drastically decline.

A small business owner must adapt to these changes by being aware of sustainable trends and shopping habits of their consumer. Choosing to utilize environmentally friendly production and packaging methods can increase your popularity among consumers who want to work with businesses that care about the environment.

Fewer Customers

Protesting Climate Change

Similarly, climate change could also impact how many customers frequent your business. Climate change can affect a person’s health and finances. Natural disasters can significantly affect tourism, as well as the number of residents who choose to live within a specific area. In turn, tourism can impact the success of a business, especially seasonal businesses or those located within a tourist-friendly area. The scarcity of resources can also create financial strain for individuals and businesses alike.

Even if climate change slows, customers are now more conscious of where they are willing to spend their money. A customer may opt not to utilize your small business if you don’t demonstrate policies that protect the environment. Making small choices such as offering eco-friendly solutions and catering to the newest shopping trends can ensure you are able to grow and maintain your customer base.

Higher Prices

Climate change can impact production, manufacturing, shipping, and storing facilities and businesses. Climate change can result in the general increase of prices of utilities and transportation. This occurs when increased costs of energy and production drive up the costs for materials and products that the business needs. To accommodate the increased expenses of operating your business, you’ll need to increase your prices, affecting your customers.

How Can Small Businesses Prevent Climate Change?

Severe impacts of climate change can be reduced if enough voices are heard at a higher level, including on government platforms and international business conventions. In addition, climate change can be slowed with enough commitments by individuals and small business owners to do their part. Moreover, recycling offers benefits to a small business.

Overall, businesses will benefit from keeping an eye on trending consumer behaviors. This not only ensures your business is the most attractive among their competition, but also serves to attract consumers looking for sustainable products from environmentally friendly businesses. Consumers are increasingly aware of the negative effects our habits have had on the environment and are often looking to purchase from businesses that demonstrate a commitment to the environment and transparency in their practices.

Make an Impact on Climate Change

Recycling in the office

Reducing the amount of waste your small business produces is a great place to start. Fortunately, you don’t have to spend a lot to decrease your dependence on materials. For example, if you own a small restaurant or bistro, you can invest in paper straws or biodegradable packaging. You can also minimize your use of single-use plastic, provide recycling bins, and invest in proper training for your employees. Together, your efforts can minimize the waste that finds its way into a landfill.

You can also pledge to use green-friendly cleaning products throughout your business, decreasing your reliance on harmful chemicals. Consider using smart technology to regulate temperatures throughout your building and ensure that energy isn’t wasted by unnecessary power drains. Then, be sure to let consumers know the advances you’ve made to reduce your impact on climate change.