The impact of climate change on business
'Climate Change is the greatest market failure the world has seen' Sir Nicolas Stern, former Chief Economist of the World Bank. This statement reinforces the view that climate change is a product of the world's economic and social 'system' as a whole, albeit developed economies have contributed significantly more per their population to date than developing nations. It is an issue that encompasses all leading actors of the market: operational forces such as large companies, regulatory forces such as government, intellectual forces such as think-tanks, research centers, universities, trade associations, foundations, and so on. As it has been caused by the system, it will need to be solved by the system. Nevertheless, the issue is rapidly taking on political form, as debate naturally forms over who is responsible for it and therefore who should be obliged to provide solutions who is to blame and who is to pay and be obliged to redress those most directly impacted? This question is at the centre of the current debate about shifting blame to individuals instead of companies, to companies instead of government, to government instead of individuals. No matter how circular the debate becomes, it firmly reinforces that climate change is a universal issue, not just a matter of individual consumer responsibility but one of market forces, including business, government and other organized interests. The challenge for business will be to recognize opportunities amidst the debate, to show leadership while being blamed, and to marshal the strengths of business to address climate change even in times of uncertainty.
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