Taking the Long-Term Approach to Climate Change
Nurturing a greener future
Will your business be around in 50 years? According to , 80 percent of companies that existed before 1980 are no longer here, and another 17 percent likely won’t survive the next five years. One explanation for this volatility has to do with where companies place their value—chasing quarterly earnings, focused on the short-term growth and profitability of a company. When companies prioritize short-term gains, they may lose focus on the long-term results and viability of their company.
Embracing a long-term mindset can often help businesses to generate greater returns over the long haul while positively impacting humanity at the same time. The philosophy behind longtermism is to utilize an ethical outlook on the future with a broader scope of impact rather than maintaining a narrow focus. From 2001 to 2014, . studied 615 companies based on their short- or long-term perspective. This study found that companies focused on longtermism earned 36% more, created 47% more revenue, and made $7 billion more in market capitalism than companies focused on short-termism.
A long-term perspective is not only good for business longevity and staying powerful, but it can also play a net-positive role in the climate crisis through improvements in sustainable practices, social responsibility and environmental impact. With climate change accelerating at a pace almost twice as fast as it was in 1981, the problem is much larger than potential negative financial performance. In a world facing the existential threat of climate change, prioritizing the short term is shortsighted.
A short-term outlook does not only affect businesses, but it also impacts society as a whole. Being the main contributors to climate change, companies’ decisions impact much more than just their own performance. According to , as of 2019, 100 energy companies alone generated 71% of all industrial emissions. However, all businesses can play a role in reducing their climate impact. As uncertainty about the viability of , businesses are faced with the opportunity to lead.
“I would like all businesses to solve the practical, grounded needs of people in the future. I would like for businesses to be rewarded for that practical ingenuity, not for the extraction of resources at the detriment of the planet and the greatest segments of humanity”
Kate Barron-Alicante, the director of impact with Abacus Wealth Partners
Big impact starts with baby steps
A long-term view considers the future of a firm, and all of its stakeholders, 20, 50, and 100 years from now. The same approach can also be valuable for business leaders at a personal level as they think about the world they want to leave behind for their families. are key motivators for business leaders to engage in addressing climate change.
It was a prime motivation for Kate Barron-Alicante to improve her education in climate change by earning a certificate in Climate Action for Business.
“Being a parent has shown me how fast time can go, and has made it more visible how we're a part of generations over time,” said Barron-Alicante, the director of impact with Abacus Wealth Partners. “[It] has called me to rise above individualized concerns and consider how I want to honestly answer when inevitably my child one day asks me what I did at this moment in history with respect to taking climate action.”
“When my children grow up, I want them to be proud of how we’re somehow able to turn the tide away from the worst possible outcome of climate change,” Barron-Alicante added.” In the era of my children's adulthood, I would like all businesses to solve the practical, grounded needs of people in the future. I would like for businesses to be rewarded for that practical ingenuity, not for the extraction of resources at the detriment of the planet and the greatest segments of humanity.”
Barron-Alicante wants to be a good role model for her children, demonstrating the necessary actions that should be taken to create a secure future for younger generations. So, how can we turn these intentions into actions? Education is a great way to initiate this process.
Leeds offers a Climate Action for Business Certificate to teach professionals how to integrate long-term climate action into their organizations. This two-day program is taught using the framework, encouraging quicker climate solutions, employee engagement at any level (not just in the sustainability sector), supply chain value emission reduction and standardized framework reporting.
After completing this program, participants are prepared to lead their businesses through a full climate strategy process, from data collection to reports, while simultaneously reducing emissions along the way with a tailored strategy plan for their organization and earn for completing the course.