What every executive needs to know about global warming

Thanks to the development of the Kyoto Protocol-an international plan to limit carbon dioxide and other so-called greenhouse gases in the atmosphere-global warming is beginning to assume a prominent position on the agendas of business executives. The protocol underscores the consensus among scientists that climate change is a threat that must be taken seriously. It also sends the message that although weather patterns aren't going to change overnight, new regulations designed to curb climate change may themselves disrupt the flow of business. Faced with such a complex problem, however, many executives have wondered where to begin. They naturally feel defensive about possible new regulations, have difficulty reckoning the likely costs, and are overwhelmed by the scientific details. But it's just not good business to hope the problem will go away. A sensible way to start is by taking a close look at the risks-and the inevitable opportunities-associated with shifts in the weather, potential regulatory changes, and the battle over public opinion. Forward-looking companies in a range of industries, from energy to insurance to automobiles, are already seeking ways to mitigate the effects of the weather on their operations, shape any regulatory regime that governments may devise, and inform the public about their efforts to reduce the problems associated with climate change. Companies that calculate the risks and opportunities effectively-as they would for any other part of the business-will be able to make wise investments that allow them to survive the coming storms.