Climate change

Definition

Climate change refers to significant and lasting changes in the Earth's climate patterns, primarily driven by human activities such as burning fossil fuels and deforestation. It has far-reaching impacts on ecosystems, weather patterns, and global economic stability.

5 Must Know Facts For Your Next Test

1. Climate change can affect a company's supply chain by disrupting production processes and increasing costs.
2. Businesses are increasingly required to report their carbon emissions and sustainability practices to stakeholders.
3. Climate change poses financial risks through potential regulatory changes, physical damages, and shifts in market preferences toward sustainable products.
4. Sustainability reporting helps companies identify areas where they can reduce their environmental impact and improve operational efficiency.
5. Investors are increasingly considering climate-related risks when making investment decisions, emphasizing the importance of transparent sustainability reporting.

Review Questions

• How can climate change disrupt a company’s supply chain?
• Why is sustainability reporting important for businesses in the context of climate change?
• What financial risks does climate change pose to businesses?

Related terms

Sustainability Reporting: The practice of disclosing information about a company's environmental, social, and governance (ESG) performance.

Carbon Footprint: The total amount of greenhouse gases emitted directly or indirectly by an individual or organization.

ESG (Environmental, Social, Governance): A set of criteria used to evaluate a company's operations and ethical impact.