How can you factor climate change into your trade strategies?

1 Assess the risks

The first step is to assess the risks that climate change poses to your trade activities. These risks can be physical, such as extreme weather events, sea level rise, or water scarcity, or transitional, such as changes in regulations, policies, or consumer preferences. You need to identify the sources and magnitude of these risks, as well as their potential impacts on your supply chains, markets, and competitiveness. You can use tools such as scenario analysis, risk mapping, or climate stress testing to evaluate the exposure and vulnerability of your trade operations to climate change.

2 Adapt to the impacts

The second step is to adapt to the impacts of climate change on your trade activities. This means taking measures to reduce the negative effects and enhance the positive ones. For example, you can diversify your suppliers, markets, or products to increase your resilience and flexibility. You can also invest in climate-proofing your infrastructure, facilities, or equipment to minimize the damage and disruption caused by extreme weather events. You can also seek opportunities to benefit from the changing demand patterns or new market niches created by climate change.

3 Mitigate the emissions

The third step is to mitigate the emissions of greenhouse gases (GHGs) associated with your trade activities. This means taking actions to reduce your carbon footprint and contribute to the global efforts to limit the temperature rise below 1.5°C. For example, you can switch to cleaner and more efficient energy sources, adopt low-carbon technologies or practices, or participate in carbon markets or offset schemes. You can also align your trade strategies with the national and international climate goals and commitments, such as the Paris Agreement or the Sustainable Development Goals.

4 Monitor the trends

The fourth step is to monitor the trends and developments related to climate change and trade. This means staying informed and updated about the latest scientific findings, policy changes, market signals, or consumer preferences that affect your trade activities. You can use sources such as reports, newsletters, databases, or networks to access relevant and reliable information and analysis. You can also engage with stakeholders such as governments, regulators, customers, or partners to exchange views and insights on the challenges and opportunities posed by climate change and trade.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?