Climate Change And International Business Strategy

Does your company have an international business strategy? If so then it’s important to know the various factors that could affect it. One of the key ones is climate change and here’s how it could affect your business:

  1. Change in Demand

Various factors such as changing weather patterns and changing prices could have an effect on the demand for goods as well as your international business strategy. One example is that if global temperatures rise, the demand for winter products such as heating systems could decrease.

On the other hand, in the case that temperature increase there would be more demand for other products and services. For example, there could be a spike in demand for purified water. It’s important to be aware of these changes as they could affect your company.

  1. New Trade Route

There’s no doubt that the melting of Arctic ice could have an effect on global business and your company’s international business strategy. That’s due to its effect on global temperatures and major changes that could make certain areas uninhabitable within time.

However, an interesting development is that ironically it could also create an open trade route that could save energy. It would create an open trade route linking the Atlantic Ocean and Asia. The energy savings would be due to shorter shipping times.

  1. Companies’ Public Perceptions

This is yet another way climate change could affect companies and international business strategy. Many companies are concerned about maintaining their reputation. Public opinion seems to be moving against companies that it believes are big polluters.

This has resulted in many companies taking steps, so they appear to be a “green” business. One example is the “Beyond Petroleum” campaign of BP. That company has also invested billions of dollars in green energy products to try and prove that it’s serious about cutting carbon emissions.

However, while many companies are taking such steps, there are skeptics who question if the companies are trying to preserve their reputation instead of being sincere about dealing with climate change. However, it’s safe to say that one of the effects of climate change has been a concern among some companies that they’re perceived as big polluters.

  1. Emissions Agreements

There are various agreements that could be affected by climate change including the European Union Emission Trading Scheme, Kyoto Protocol, and others. This could, in turn, affect your company’s international business strategy as well.

Several of today’s companies have foreign operations. As a result, they could be under the jurisdiction of various climate change laws/regulations. For example, the US didn’t sign the Kyoto Protocol. However, its companies operate in countries that are trying to follow the protocol’s rules. Meanwhile, the European Union has a credit system for emissions that applies to big polluters. The Yair Hamami business strategy supports this.

It’s unclear what the effects of various regulations could be. However, some experts believe a global cap/trade system could follow the Kyoto Treaty.

These are some of the key ways changes in climate including rising temperatures, and sea levels could have a major impact on your company international business strategy.

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