Climate change is a global equalizer. No matter your location, industry, or role, its effects impact how you live and work—and will continue to in the future.
“From more frequent wildfires and hurricanes, to more intense heat waves and flooding, to rising sea levels and changes in the ocean, these effects are projected to intensify and to become more unpredictable in the decades ahead,” says Harvard Business School Professor Forest Reinhardt, who teaches the online course Business and Climate Change alongside HBS Professor Michael Toffel. “Consequently, companies in every industry are changing the ways they do business.”
To help you identify risks and opportunities for adapting to and mitigating climate change and make strategic organizational decisions, here’s a primer on climate change basics.
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DOWNLOAD NOWWhat Is Climate Change?
Climate change refers to long-term shifts in temperature and weather patterns. Although some changes in Earth’s climate are natural, most have been caused by humans.
Climate change’s effects include:
- Rising average global temperatures
- Extreme weather events, including storms, heat waves, and temperature fluctuations
- Rising sea levels, which cause flooding
Tackling climate change is an especially lofty issue because of its global nature and long time horizon. To address it, you need to work across international borders and know that your efforts may not come to fruition until decades later.
While sustainability is sometimes viewed as an isolated corporate initiative, climate change impacts every business facet and should be a critical factor in your organization’s strategy.
First, you must understand the underlying, natural phenomena of Earth and its atmosphere. Here’s a breakdown of three key concepts explained in Business and Climate Change.
Related: Listen to Professor Reinhardt discuss climate change and the tragedy of the commons on The Parlor Room podcast, or watch the episode on YouTube.
3 Key Phenomena for Understanding Climate Change
1. The Greenhouse Effect
The greenhouse effect is a natural phenomenon that enables Earth to support life.
“The Earth is heated by solar radiation,” says Harvard Professor of Geology, Environmental Sciences, and Engineering Dan Schrag, who’s featured in Business and Climate Change. “Because the sun is very hot, the wavelength of that radiation is very short—it’s very high frequency. That means it’s mostly in the visible spectrum.”
As the sun’s visible light hits Earth’s surface, some reflects into the atmosphere, but most is absorbed. This causes Earth’s surface to heat up and emit heat of its own back into the atmosphere. Those waves are called infrared radiation. Because of their low frequency, greenhouse gases more readily absorb them in the atmosphere.
There are four naturally occurring greenhouse gases:
- Carbon dioxide (CO2)
- Methane (CH4)
- Nitrous oxide (N2O)
- Water vapor (H2O)2
The heat the greenhouse gases trap is reradiated back to Earth’s surface, increasing its temperature and ensuring it remains warm enough to sustain life—much like a greenhouse can keep plants thriving in colder temperatures.
2. The Carbon Cycle
Carbon is a naturally occurring element that supports all life on Earth. The carbon cycle is the process by which carbon travels between Earth’s surface and the atmosphere.
Any process that releases carbon is called a carbon source; any that absorbs it is called a carbon sink. This “source-and-sink relationship” exists for all greenhouse gases and makes natural cycles possible.
“Carbon atoms move from organisms to the atmosphere in the form of carbon dioxide, and back into organisms again and again,” Reinhardt says in Business and Climate Change.
One carbon cycle example that the course presents is the interaction of respiration, photosynthesis, and decomposition. When you eat food, you take in the energy you need—an example of a carbon sink. As you exhale, you release carbon dioxide (CO2) from the food into the atmosphere—so your breathing is a carbon source.
Plants, which need carbon dioxide during photosynthesis to generate energy, absorb CO2 and act as carbon sinks. When a plant dies, the carbon used to fuel its growth is released back into the atmosphere as carbon dioxide, which other plants absorb. The cycle loops back around when you eat plants or other food and exhale carbon into the environment.
3. The Water Cycle
The third phenomenon, the water cycle, is critical to maintaining stable temperature, weather, and accessible water.
“Water moves constantly through the Earth’s land, atmosphere, and oceans,” Toffel explains in Business and Climate Change. “It evaporates from the surface, condenses to form clouds, and returns to the surface in the form of precipitation. This circular process is called the water cycle.”
The water cycle’s three stages are:
- Evaporation: Water heats and turns to water vapor (H2O)2—a greenhouse gas—and rises into the atmosphere.
- Condensation: Once water vapor reaches the atmosphere, it condenses and forms clouds.
- Precipitation: When clouds in the atmosphere get too dense, water is released back to Earth in liquid or solid forms—better known as rain, snow, sleet, or hail.
If precipitation is solid, it eventually melts into liquid water, and the cycle begins again.
Related: 7 Ways Climate Change Affects Global Businesses
What Causes Climate Change?
All three of the described phenomena depend on maintaining balance—in Earth’s temperature, amount of carbon in the atmosphere, and water in circulation—using naturally occurring resources.
In Business and Climate Change, Toffel explains that humans have disrupted these processes, setting Earth’s regulatory systems out of balance.
“Scientists agree that human activity is now the leading cause of climate change and is why the planet is warming up much faster than it ever has in the past,” Toffel says in the course. “Anthropogenic climate change—or human-caused climate change—began when humans started cutting down forests to clear land for agriculture and other forms of development—building cities, paving roads, and burning fossil fuels for energy, among other activities.”
Humans release a significant amount of greenhouse gas into the atmosphere, creating an imbalance between sources and sinks. That is, too much greenhouse gas emits than can be naturally absorbed.
Some ways in which humans—and businesses in particular—generate excess greenhouse gases are:
- Burning fossil fuels to generate electricity
- Producing cement, steel, and iron for construction
- Waste management, such as landfills and trash incinerators
- Transportation, including cars, trucks, planes, trains, and ships
- Clearing land for agriculture
- Raising livestock
Humans have also created a new type of greenhouse gas called fluorinated gas, often used in industrial processes like refrigeration and air conditioning.
When excess greenhouse gases build up in the atmosphere, the greenhouse effect causes Earth to overheat rather than self-regulate to its optimal temperature.
The greenhouse gas most responsible for climate change is carbon dioxide. An excess of CO2 not only contributes to the dysregulation of the greenhouse effect but throws off the carbon cycle.
Climate change escalating Earth’s average temperature also disrupts the water cycle by increasing evaporation, putting more water vapor into the atmosphere and removing it from bodies of water and soil—which can cause extreme precipitation, heat, and temperature fluctuations.
“Humans are altering these flows in ways that significantly increase the concentration of carbon dioxide in the atmosphere,” Reinhardt says in Business and Climate Change. “This is already affecting the climate, and it’s those consequences about which businesses and society more broadly need to worry.”
Why Do Business Leaders Need to Learn About Climate Change?
Because businesses are major contributors to excess greenhouse gas production, it’s imperative to care about lessening your organization’s climate change effects and adapting to the damage already done.
Luckily, as a business leader, you’re uniquely positioned to make a big impact on this pressing issue.
“Throughout modern history, business firms have been amazing engines for societal change,” Reinhardt says in Business and Climate Change. “They regularly develop technological innovations to produce goods and services that make people’s lives better. Now, climate change is one of the world’s biggest societal challenges. Companies will have to play an active role if we, as a society, are to have any realistic hope of managing the challenges presented by climate change.”
In the face of global challenges, education is the first step to enacting change. Taking a course like Business and Climate Change can help prepare you to not only adapt to the evolving business landscape but also innovate and work toward a better future.
Do you want to learn more about adapting to and mitigating climate change? Explore Business and Climate Change—one of our online business in society courses—and download our free e-book on how to become a purpose-driven, global business professional.
