The Effect of Climate Change on International Business

Climate change is currently a critical issue sparking heated debates in society because of its effects on international business. The definition of climate change is quite complex as it refers to changes in average weather of a region or city (Ssusman & Freed, 2018). Numerous reasons cause climate change, but the major cause is the increasing emission of greenhouse gases. On the other hand, climate change not only impacts the environment but also impacts businesses. Fortunately, climate change has some upshots in the business area as it has some positive impacts. The reason is that businesses can adopt environmentally friendly practices that can help reduce the cost of operation and production. International businesses can also penetrate the competitive business environment by creating a sustainable image that makes them appear trustworthy. Conversely, climate change also impacts international businesses because extreme weather conditions can disrupt the supply chain. Therefore, the essay discusses the effects of climate change on international business and ways of addressing the challenge.

Many environmental discussions revolve around climate change, receiving greater public attention. Climate change has been dubbed a terrible difficulty and an expected surprise since it comprises open, complicated, and poorly understood processes. The increased demand to cut greenhouse emissions is being met with resistance due to climate change's perception, complexity, and uncertainty (Winn et al.,2010). Corporations' answers to public expectations to actively engage in environmental issues vary. Some openly oppose caps and laws. Others are cautious, yet others claim that companies must take action while profiting favorably from their efforts.

The major international business affected by climate change is the tourism business. Tourist is a service sector that primarily entails tourists moving from their home country to international countries primarily for leisure. However, tourists mainly decide to travel based on the climate and natural environment. As a result, climate change impacts the demand for tourists because when the weather is favorable, the majority of tourists travel. In contrast, tourists fail to travel to international countries when extreme weather conditions. Therefore, when the demand is high, the businesses in the tourist sector make profits. In contrast, when the demand is low, businesses incur losses.

Another effect of climate change is increasing capital expenditure on international businesses. The reason is that countries across the globe are mitigating the effects of climate change, and they have strict guidelines, particularly for international businesses. For these businesses to adhere to the climate guidelines of climate change set in the countries they are established, they have to spend a significant amount of money upgrading their polluting facilities. The businesses also spend money installing emission control systems to comply with the regulations set to reduce the emission of greenhouse gases. Therefore, international businesses spend more capital expenditure to comply with emission policies.

Another impact of climate change is that it affects the prices of goods and services. The reason is that international businesses of the energy regulations aim to reduce the emission of energy. When these organizations change their utilities and methods of transport, they pass the charges to the suppliers. These costs are later passed to consumers, resulting in high prices of goods and services. When the prices of goods increase, international businesses...…vast and systematic mechanism of water irrigation that would necessitate the abundance of water, for which companies have to be vigilant with the use of water. It is projected that food scarcity could worsen, other than food insecurity in a few countries and geographic regions, most likely resulting in a war for water and food.

Therefore, the corporate environment has changed dramatically in recent years, thanks to increased rivalry and a wave of globalization that has swept the globe. Many businesses are branching out beyond their native countries to meet the changing wants of other countries. This tendency has made businesses aware of the necessity to operate effectively in a competitive market with clearly defined business practices that significantly emphasize the public interest (Human, 2018). Many businesses with a track record of decreasing emissions are shifting their focus from risk management to new business opportunities. They have adopted market-based approaches, presenting economic prospects as businesses strive to enhance resource efficiency by boosting energy efficiency and lowering expenses. Many of these businesses have discovered that reducing their environmental footprint influences their efficiency, reputation, and overall business environment. Many companies foster invention, which leads to fewer goods and less carbon-intensive activities, or they help businesses reduce their carbon footprint. Climate change symbolizes an approaching market shift for the corporate sector, which may either establish and modify existing businesses or generate new ones. Adopting measures to minimize greenhouse gases is a lengthy strategy to meet growing possibilities and restrictions, not just a morally acceptable obligation. Through active engagement with non-governmental groups, authorities, organizations, and the broader population, businesses can play a part…