Business houses should consider protection of the value of the global commons — the earth’s un-owned natural resources, said R. K. Pachauri, Chairman, Intergovernmental Panel on Climate Change, on Saturday.

Addressing the graduates of IIM, Calcutta at its 48th Annual Convocation, Pachauri said: “...Today, even the financial performance of a company is far more dependent on societal factors.... One reason for this is the fact that through our cumulative actions for many decades, human society has impacted on the global commons and the natural resources of the planet to an extent where our cumulative actions are now causing negative effects on business activities as well.”

He cited the example of the natural disaster caused by hurricane Sandy in northern US, which resulted in a loss of $52 billion.

According to Pachauri, businesses have to think beyond the narrow objectives of profit. “...In our focus on maximising profits we have perhaps not looked at some of the negative externalities that a number of economic activities have imposed on the earth’s natural resources…,” he said.

Climate change impact

Pachauri emphasised that companies’ managements should adapt with the changing climate to understand its impact on the overall business.

“Today, what we need is a clear understanding of the way earth’s global commons are likely to change, and how these might impact business in particular…,” he added.

Pachauri said cutting down on greenhouse gas emissions was another key area to focus on. “The world would need to mitigate the emissions of greenhouse gases as part of the overall solution. Neither adaptation nor mitigation alone can avoid all climate change impacts; however they can complement each other…,” Pachauri pointed out.

> ayan.pramanik@thehindu.co.in

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