Facing the inevitability of climate change

The IPCC report made it clear that scorching heat waves and wildfires are here to stay. Are brands ready for the changes they will usher in?

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This is the first article in a series exploring the marketing and brand impacts of climate change. You can follow the series by subscribing to the Strategy C-Suite, a weekly briefing on how Canada’s brand leaders are responding to market challenges and new opportunities. 

Between the record-breaking heat and raging wildfires in B.C. and Europe, the devastating floods in China, Germany and India, and the droughts currently hammering the Prairies and California, never have the effects of climate change been so clearly laid bare. Yet this will be, as the internet meme reminds us, the coldest summer of the rest of our lives.

A report presented to world leaders by the U.N.’s Intergovernmental Panel on Climate Change yesterday confirmed as much, and further highlighted that scientists agree that humans are behind the scorching heat and other symptoms of a planet in distress.

To summarize, there is no turning back.

The IPCC’s report notes average global temperature is very likely to rise 1.5 degrees Celsius above pre-industrial levels by 2040. That’s the best-case scenario. It looks almost certain now that humanity will be limited to determining whether temperatures will, through lacklustre efforts to curb emissions, be allowed to increase to the more devastating 2-degree or even 4-degree thresholds.

Marketers, in other words, best start preparing for a world that looks vastly different than today’s. From influencing where people choose to travel and live to shaping demand for certain products and services and creating logistical and supply chain challenges, the climate crisis will impact nearly all sectors and businesses, according to experts who spoke with strategy. 

At a high-level, the discourse around the impact of heat waves on businesses has changed over the last five years, moving from “how to capitalize on heatwave-related spikes in consumption to a more conscientious look at understanding what the ‘dark side’ could be,” says Johanna Faigelman, founding partner and CEO of Human Branding Inc., a consultancy that takes an anthropological approach to marketing and business.

“Heat waves were once celebrated among businesses and brands – think amusement parks, food and beverage industries, sports and summer clothing lines, outdoor sports,” Faigelman says. “But now there is much more of a moral and ethical undertone around what is driving a heat wave that has removed some of the fun, and over time will chasten people from exploiting it for reward.”

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Among the businesses that will be affected by climate change, the experts agree that those operating in the travel, tourism and hospitality sectors will be among the hardest-hit early on, as people rethink their travel plans and entertainment choices.

“There are going to be massive effects on how people make their decisions about where to take their vacations,” says David Soberman, Canadian National Chair in Strategic Marketing and a professor at the University of Toronto’s Rotman School of Management. “Longer term, you’re going to see an effect on where populations go and where they migrate to.”

Many winter sports-oriented resorts will face shorter seasons, and consumers will be more reluctant to make plans around activities that are weather-dependent. For example, Soberman, who lived in Europe a few years ago, says the situation has already become more dire for many French and Swiss ski resorts, whose season often now starts after the Christmas holiday. And in Manitoba, some resorts may close this year due to drought conditions.

Meanwhile, countries like Italy and Spain, once top destinations for sun-chasing travellers, will likely suffer declines as people stick to more temperate cities, Soberman says. Families, accustomed to planning around summer break, may begin vacationing during cooler months.

Marie-Josée Legault, founder of agency Origin, which specializes in work for outdoor brands like Whistler Blackcomb, L.L.Bean and The North Face, says the impacts of rolling heat waves on businesses is “a huge topic for us right now.”

“As heat waves make travel, or just outdoor recreation, increasingly difficult, we may see a surge in virtual tourism,” she says. “Recently on an earnings call, Zuckerberg hinted at Facebook’s future and it’s not advertising or social media. It’s the metaverse. We may see an increase in polished and perfect VR experiences while the real deal becomes more and more challenging.”

Brands in the tourism and recreation space will likely need to shift locations or hours of operation, adds Legault, as mid-day becomes too hot to do anything but sit by the lake or in air-conditioned spaces. “What does that mean? Perhaps expanded hours in places like bike parks and outdoor pools, earlier and later closing times for park gates, and a cultural shift towards the North American siesta.”

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It’s also likely destinations will need to start showcasing real-time conditions, she says. “We can imagine the need for consumers to access a dashboard when they’re planning a vacation allowing them to see ‘green’ destinations where it’s safe to travel, and ‘red’ ones undergoing a heatwave, flood or smokefest.”

And, adds Legault, it’s possible there will be a lot more short-term, last-minute vacation planning as a result. She says that, during the August long weekend, Whistler experienced one of its busiest weekends in nearly two years, as a result of travellers cancelling trips to the interior of B.C. due to wildfires and heatwaves.

And awareness of the issues at the heart of environmental change will further have an impact on the consumer mindset, notes Agents of Necessity founder Sarah Ivey.

“It would be difficult for consumers not to be aware, at this juncture, of the impact of each decision that they make on the environment,” she says. “Like the impact of COVID, the increasing pressure on environmental issues are going to increase the ‘of two minds’ phenomenon – the yo-yo between making sound responsible decisions and the impulse to live for the moment and to get ‘back to normal.’”

Ivey believes this will lead to an increase in “low-impact indulgence” – local attractions, at-home entertainment, local restaurants – while brands who have a disastrous environmental record are simply avoided.

But while consumers may stick closer to home, Soberman says even local businesses must prepare for the changes to come. In hospitality, restaurants and bars that rely heavily on their patio service and outdoor terraces – a potential lifesaver during COVID times – will be disproportionately impacted by hotter temperatures.

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On the other hand, those with greater indoor capacity, and especially those with large windows overlooking the mountains or the seaside – allowing customers to experience the outdoors while sheltered from the climate – will thrive, he says.

With time, the heat will begin determining where people choose to settle and start their businesses, as extreme temperatures and recurring wildfires make even places like California less attractive to the highly-educated, higher-paid working class with greater mobility. Bangalore, India, which has become a major hub for the country’s IT and tech talent – in part due to its more moderate climate – is one example of this phenomenon.

“This is actually making Canada a lot more of a popular place to be,” Soberman adds. “Immigrants are going to want to come here. Why? Because the big criticism of Canada has always been that it’s really, really cold. And it’s still cold compared to a lot of countries. But given the alternative, it’s not so bad anymore.”

Soberman believes the urgency of the issue, as it is starting to be felt first-hand by consumers, should also motivate marketers to act. “One of the problems always with [the climate change] issue is that it remains kind of scientific and esoteric,” he says. “But when you start talking about, ‘This ski resort is now closed because of global warming,’ people will start to take notice.”

Photos of courtesy of Thom Milkovic, Tomek Baginski, Thomas Scott and Pix Poetry via Unsplash.