The multinational corporation Coca-Cola has always emphasized corporate economic efficiency. However, in 2004, when the company lost its lucrative business license in the Indian market due to severe water shortages, the situation began to change.\n
Global droughts depleted the water resources needed for Coca-Cola\u2019s soft drink production, causing the company\u2019s financial losses to expand continuously over the past decade. To this day, Coca-Cola has been forced to acknowledge that climate change is a serious force of economic disruption.<\/p>\n\n\n\n
\u201cMore and more droughts, increasingly unpredictable changes, and once-in-a-century floods occurring every two years,listed Jeffrey Seabright, Coca-Cola\u2019s Vice President for Environment and Water Resources, describing the recent climate challenges.\nThese problems have also disrupted the supply of sugarcane and sugar beets, as well as citrus fruits needed for juice production.\n\u201cWhen we consider the key ingredients required for our formulas, we view such events as threats to the company\u2019s normal operations,\u201d he said.<\/p>\n\n\n\n
Coca-Cola\u2019s experience reflects a new trend in awareness among American business leaders and mainstream economists.\nGlobal warming is now recognized as a disruptive force that can reduce GDP, increase the costs of food and commodities, disrupt supply chains, and intensify financial risks.<\/p>\n\n\n\n
As extreme weather disrupted supply chains, Nike\u2014a multinational corporation with more than 700 factories in 49 countries\u2014also took a public stance on global warming.\nIn 2008, floods forced Nike to temporarily shut down four factories in Thailand.\nBecause cotton is essential for producing sports apparel, the company has grown increasingly concerned about the worsening droughts in cotton-producing regions.<\/p>\n\n\n\n
Hannah Jones, Nike\u2019s Vice President for Sustainable Business and Innovation, noted that \u201cdroughts reduce the supply of cotton in the market, driving up costs.\u201d\nIn its financial risk report submitted to the U.S. Securities and Exchange Commission (SEC), Nike disclosed the impacts of climate change on water availability.<\/p>\n\n\n\n
As climate change drove up costs, both multinational companies responded internally: Coca-Cola adopted water-saving technologies, while Nike increased its use of synthetic materials that are less dependent on weather conditions.\nGlobally, these companies have also actively lobbied governments to implement environmental policies.<\/p>\n\n\n\n
As multinational corporations increasingly require themselves and their supply chains to conduct risk assessments and implement mitigation measures for climate change, small and medium-sized enterprises (SMEs) in Taiwan must also develop the ability to manage their own risks.\nOnly by doing so can they minimize climate-related risks, transform potential future crises into business opportunities, and establish a solid foundation for long-term stability within their industries.<\/p>\n\n\n\n