An article caught my attention last week from the Auto Industry Action Group, entitled “How Climate Action May Impact the Auto Industry.” Initially, I thought it might tell the story of an industry that has seen significant disaster-related setbacks taking charge to prevent future problems. Actually, it proved to be a polemic about how to protect the industry from climate-related regulations.
Like the finance industry, which gained important business-continuity planning lessons from 9/11 and more recent disasters for example, Goldman Sachs’ stellar disaster-recovery preparations that enabled it to keep its lights and power on in lower Manhattan after Hurricane Sandy). I presumed that automakers were also familiar with risk mitigation, drawing lessons from disruptions to their supply chain after Japan’s devastating 2011 earthquake, tsunami and nuclear disaster.
I bet there are a few leaders in the auto industry who are assessing the realities of the climate-change issue and are mulling risk evaluations that, for instance, include a look at the relative vulnerability by country of origin of their major suppliers – China Japan, Korea and Mexico. As of 2011, Japan and Korea possessed a similar level of readiness, and Mexico and Japan’s vulnerability matched, but China was the least prepared and most vulnerable of all of them. (Check out the vulnerability/readiness matrix here to compare countries.)
Others closer to home may be thinking about these risks. The environmental choir, namely The American Sustainable Business Council, published an interesting article about small business risks from climate adaptation.
I can only assume that many car dealerships, which stand at the tail end of the industry’s value chain, consider themselves small businesses. Without climate-adaptation leadership, they could find themselves in trouble. Among several compelling statistics noted in the article, an estimated 25 percent of small- to-mid-sized businesses don’t reopen after a major disaster, and 57 percent of small businesses have no disaster-recovery plans.
These small businesses represent our American jobs and the backbones of our communities. As climate-related risks grow at home and abroad, we should make it a priority to find the right tools to help all business owners manage for a dramatically changed future.