2024-11-27T09:01:00

(BPT) - Organizations are increasingly worried about the impact of climate change on their businesses. A national survey by MIT Technology Review Insights, in conjunction with the Michigan Economic Development Corporation (MEDC), asked respondents to identify ways their businesses have already been impacted by climate change, as well as how they're preparing for an increasingly volatile future.

Every single business that responded agreed they experienced negative impacts. More specifically, the majority suffered business disruption (61%) and damage to physical infrastructure (55%). Many also report that their operational costs (64%) and insurance premiums (63%) are rising.

Because of the effects of climate change, 75% of respondents report that their organization has considered relocating due to climate risk. When considering relocation, it's critical business decision-makers assess these six factors that should guide their choices.

1. Access to climate-planning resources

According to the survey, 62% of executives say their organizations have created a plan to prepare for climate change effects. Should an organization relocate, it's crucial that it have access to climate-planning resources to inform and support its existing plans. In fact, 71% of executives highlight the availability of climate-planning resources as among their top criteria, when judging a potential new business site.

For example, the Michigan Department of Environment, Great Lakes, and Energy (EGLE), through its Office of Climate and Energy, developed the MI Healthy Climate Plan. The plan provides recommendations, guidance and assistance on climate change mitigation, adaptation and resiliency strategies. Businesses considering relocating to Michigan can learn about current climate initiatives on the plan's online portal.

2. Talent

The health of businesses relies on a thriving talent pool. As birth rates decline, states and countries around the world are more dependent than ever on population migration — individuals choosing their place to build a life. Because the most mobile people are between the ages of 20 and 34, according to the U.S. Census Bureau, understanding why these individuals choose to move has never been more important.

Michigan conducted national polling of 18-34-year-olds in 15 cities across the U.S. that are popular among young talent, including Atlanta, Austin and New York City. Among other top factors like access to reproductive health care, diversity, safety, and walkability/accessible transportation, young people also noted they were looking to live in future-focused communities making investments in the fight against climate change. For talent that want to be on the forefront of climate action, places like Michigan offer purpose-driven career opportunities that help meet these desires.

3. Weather events

Existing weather events are worsened by climate change. Extreme heat, drought and wildfires have become serious challenges in recent years while hurricanes are becoming more intense and costly.

Given the continued effects of climate change, businesses should research cities and states that are considered climate havens. While no area is completely untouched by climate change, certain regions of the U.S. fare better than others. The Midwest, for example, was most often selected as the least exposed region of the country by survey respondents. Current and future employees contemplating where to continue to live or relocate may find climate-resilient Midwest states attractive, especially as weather events continue to worsen because of climate shifts.

For businesses focused on climate preparedness, a Midwest state like Michigan may be their best choice for relocation. Michigan ranked as the best state for climate change when considering drought, extreme heat, wildfires, flooding and climate change preparedness. Nearly half of all respondents (47%) choose the Midwest as the least exposed region of the country.

"Michigan is strategically positioned to lead the fight against the climate crisis," said Hilary Doe, Chief Growth Officer for the State of Michigan. "We are not only a climate haven — where extreme weather events are less likely to drastically impact our people and businesses — we're also rolling up our sleeves to establish the state as a leader in climate innovation and purpose-driven work. For talent and businesses that want to be on the forefront of climate preparedness, there's no better place to be than Michigan."

4. Grid resilience

Power outages aren't just inconvenient. They can disrupt business operations to the point that financial losses, productivity and equipment damage can occur. Prolonged outages can also cause disruption to supply chains long after the power comes back on.

Choosing a location that has a resilient grid infrastructure can help businesses continue operations even in inclement weather. One innovation that is powering electric grid resiliency is the implementation of interconnected microgrids.

In 2023, DTE Energy — a Detroit-based diversified energy company — received a $23 million matching grant for research and deployment of two projects designed to protect customers from storm-related and other outage events. One of these projects focuses on creating adaptive networked microgrids (ANMs).

Unlike traditional grids that distribute power in one direction, microgrids can work independently. The U.S. Department of Energy's Grid Development Office expects microgrids can reduce outages for microgrid areas by 50%-80% and a decrease in outage durations of 15%-30% when extreme weather events happen.

5. Natural resource availability

Conserving natural resources is also a major concern for business executives, with 64% of respondents citing a location's access to critical natural resources, such as freshwater, as very important. Researching a state's natural resource management can help make relocation decisions much clearer for businesses.

Businesses may find the Michigan Department of Natural Resources (DNR) climate mitigation strategies as a strong reason to relocate to the state. The DNR incorporated climate mitigation as a key pillar in their Public Land Strategy to identify appropriate strategies for emerging climate-based threats to natural resources.

As part of this strategy, the DNR launched the nation's first carbon sequestration and carbon market program on state forest land. If protected and appropriately managed, this action could limit water runoff pollution and provide habitats that support biodiversity.

6. Financial incentives

Finally, financial incentives are a critical component for organizations seeking to climate-proof their businesses. These financial incentives can lighten the burden of relocation and support future company growth.

LuxWall, a company that manufactures energy-efficient windows, recently evaluated six Midwestern states for two new manufacturing facilities. It compared locations on R&D tax credits and financial incentives, as well as weather events and resource availability. In the end, the company chose Michigan.

It's not hard to see why Michigan was LuxWall's top choice. MEDC offers highly competitive, performance-based incentives that can assist existing or growing companies with business expansion or relocation plans in the state. Flagship incentives include the Michigan Business Development Program, Strategic Site Readiness Program and Critical Industry Program.

Businesses can set themselves up for success even with the many variables of climate change. As you scout future locations, review these six considerations. They're great starting points to help climate-proof your organization.

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