Climate Change Turns Up Heat on Small Businesses

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When people hear the words “climate change,” they might picture some dystopian horror scene years down the line. I know from experience, though, that climate change is a real problem that is creating major headaches for small businesses today and every day.

Outerknown, a Culver City menswear retailer founded by champion surfer Kelly Slater where I oversee supply chain and sustainability initiatives, has recently experienced such headaches. Just this April, a heat wave struck Malaysia, home to one of our key suppliers. The intense temperatures took a toll on air-conditioning units at the factory, triggering a power outage. The outage shut down the factory at a critical time in the manufacturing cycle, which prompted a dominolike collision through our supply chain.

Because of the production delays in Malaysia, our manufacturer had to ship the finished items to our distribution center in Irvine by air instead of sea. Shipping items by air can be up to five times more expensive than transporting them by water. To complicate matters, because of the holdup in Malaysia, our clothing could not be inspected there and had to be checked in Irvine, burdening us with additional costs.

The stall in production hurt our customers, too. Slow production meant folks received their orders later than expected. This is a tough position for any clothing retailer to be in, but it is especially damaging for a startup trying to build positive brand awareness.

Supply chain

American manufacturers tend to rely on highly specialized, global supply chains, which represent about 60 percent of the average manufacturer’s costs. These supply chains operate on a just-in-time basis that requires factories to operate with as little as two to four hours of parts inventory on site. Just-in-time delivery saves manufacturers money on overhead, but it also makes supply chains more vulnerable to disruptions, such as severe weather. Because supply chains are global, disruptions on the other side of the planet can slow down American companies.

Businesses across California are already experiencing damage caused by climate change, from droughts to floods. If more businesses want to keep weather-induced mishaps, like the one we experienced in April, from affecting their bottom lines and becoming increasingly commonplace, they need to act soon.

We create apparel from organic and recycled materials, but we know that one small business cannot combat climate change alone. We are searching for ways to be more sustainable and we encourage policymakers to do the same.

The United States has come together with other countries to sign the United Nations climate change agreement, and now it’s time to do the work to meet those goals.

The Clean Power Plan is one of the most important initiatives to curb climate change ever, and it will set the nation on the right path to reducing carbon pollution. The rule will force power plants, the largest concentrated source of carbon emissions in the United States, to cut smog and soot emissions. This could reduce the amount of carbon in our atmosphere by about 30 percent by 2030. The Clean Power Plan could dramatically slow the causes of global climate change, potentially diminishing the threat of severe weather for small businesses.

In addition to this important federal rule, we should also encourage state policymakers to enact stronger clean energy standards. California has a long, proud history of leadership in clean energy technology production and deployment. In 2009, six years before the Clean Power Plan was published, more than 11 percent of the state’s electricity came from solar panels. In October, Gov. Jerry Brown signed a bill aiming to ensure that half of the state’s electricity comes from renewable sources by 2030. Now is the time to kick this into high gear so we can power a clean economy for the future.

The consequences of climate change are affecting our environment and our economy today. We can no longer push this problem to the next generation. The big wave is coming quickly – are you going to let it crash over us or are we going to ride it high?

Shelly Gottschamer is supply chain and sustainability officer at Outerknown.

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