It's Time for Businesses to Adapt to Climate Change. How Should They Do It? Business leaders need to understand the entire range of opportunities in climate mitigation and climate adaptation.

The outcome of COP26 has left many disappointed.

Despite 151 parties having submitted new or updated nationally determined contributions (NDCs) in the run-up to the conference, commitments to curb emissions continue to lag significantly behind what is needed to limit global heating to 1.5 degrees Celcius by 2030. Calls for drastic climate action around the world were met by constraining economic realities and touch choices involving the balancing of immediate development needs with the expectations around green growth.

Meanwhile, the baton is being passed on to the private sector, which is facing mounting pressure for climate action. Armies of investors, businesses and other non-state actors participated in COP26. Over 2,000 companies committed to new science-based targets for reducing their emissions, a trend that does not exclude the financial sector, which has seen large financial firms making commitments to shift their portfolios to net-zero by 2030.

As financial portfolios are increasingly expected to align with climate goals, the need for transparency intensifies. Companies are increasingly expected to release clear and detailed plans on how they will achieve their net-zero commitments.

And businesses are listening. As many ready themselves for the expected deluge of climate reporting and regulation, an increasing number have released net-zero targets of their own. However, a recent analysis suggests corporate climate targets are vague, unambitious and lacking follow-through. Despite the rush to action, most continue to lack a clear understanding of how climate change will impact the strategy and operations of their business in the long term. This reality makes planning for climate adaptation a real challenge. While it can be easy to proclaim lofty goals, many companies' climate strategies are a lot more modest when it comes to outlining specific steps with any chance of achieving desired outcomes.

As presenteeism abounds, it is no surprise that many companies have chosen to adopt a "wait and see" attitude, quietly expressing utter confusion about what to do next. And so far, climate-focused policymakers and nonprofits have not been of much help. It is easy to get overwhelmed.

Yet the risk of inaction is high: Increased droughts and other extreme weather events can threaten the economic base of entire regions, upending the way of life for communities; skyrocketing flood insurance rates and equipment maintenance costs can drive long-established companies out of business; entire regional workforces can become susceptible to previously rare diseases. Even companies less affected by the physical impacts of climate change face risk from customer boycotts, employee activism, investor pressure, the increased cost of capital and the impact of regulatory sanctions on companies that fail to act on the worldwide climate issue.

While the pressure to act mounts, businesses leaders need to understand the entire range of opportunities in climate mitigation and climate adaptation. Alongside shoring up your company and strengthening its market position, you need to be able to get yourself in a position to help others adapt to the changing climate.

Here are a few steps every company can take now.

1. Assess your company's greenhouse gas (GHG) emissions profile, set a reduction goal and develop detailed and realistic plans for achieving it.

This might involve changing your production processes, travel arrangements, logistics and distributions. It could also mean transitioning to purchasing renewable energy, improving fuel or energy efficiency of your buildings and equipment or subsidizing your employee's use of public transportation options.

Keep in mind that your company has tremendous capability to drive change — even small businesses can make changes with significant impact. Often, these changes produce financial savings, too.

Related: Why Now Is the Time to Invest in Climate Technology

2. Assess your company's climate risks.

Think through how changing weather patterns or rising temperatures might impact your infrastructure. Don't forget about changing market demand and consumer attitudes. New regulations can also present risks and cost a pretty penny to comply. Evaluate potential impacts and develop plans of action in case those risks materialize.

Related: What Is Business Climate Change, and Are You Prepared for It?

3. Analyze opportunities that may open for your company as the result of changing climatic conditions or regulations.

Although no one wants to look like a profiteer, your business's very survival may depend on your ability to "be in the right place at the right time," and take an honest survey of opportunities. For example, if your business provides products or services that can help individuals and communities adapt to the impacts of changing climate, you need to be thinking strategically and positioning your business to continue doing so.

Climate change is our collective challenge and cannot be solved from organizational siloes. Remember to collect and share relevant data, motivate your employees and their social network, choose suppliers that can demonstrate climate consciousness and educate your customers.

Most importantly, the risks and opportunities related to climate change must be reflected in your core business strategy — doing so will enable your organization to adapt and transform to meet the challenges of tomorrow. This may be in the form of new processes and procedures, and in certain cases, a reworking of the business model in its entirety. Nevertheless, the core of what it takes to stay in business and prosper is still the same: the unwavering pursuit of customer and shareholder value, tending to the needs of communities where you operate and staying on the right side of regulators. Your company can continue to grow with ease and momentum if you take the right steps to protect and develop it to adapt to these new conditions.

Related: Catching Up On Climate Change? There's Still Time To Do It Right.