Businesses could face significant financial losses if they don’t take action now to deal with and adapt to growing climate risks such as extreme heat, a new report warns.
According to the report Business on the Edge: Building Industry Resilience to Climate Hazards, the effects of climate change could result in up to $610 billion in annual fixed asset losses across publicly traded companies by 2035.
This corresponds to a 7% annual decline in average corporate profits, and about half of the 15.3% decline in profits experienced during the COVID-19 pandemic.
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The report was produced by the World Economic Forum in collaboration with partners including a research team from Exeter University Business School. It provides a comprehensive assessment of risk and resilience strategies for boards, investors, executives and operational managers.
Professor Gail Whiteman was the report’s lead academic advisor and led the team at Exeter University Business School that worked on the report.
Mr Whiteman said: “This report aims to help business leaders understand the nature and extent of the risks that climate change poses to organizations, and by demonstrating the resilience strategies that provide a path to sustainable economic and social prosperity amidst a changing Earth system. I will give you strength.”
“We aim to bridge the gap between scientific understanding of systemic change and how it is actually achieved. This report responds to an urgent need.”
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The paper warns that climate change will disrupt every step of the supply chain, from sourcing to processing, distribution and consumption patterns.
The report predicts that the telecommunications and utilities industries will be hit the hardest. On average, companies in these industries are expected to experience fixed asset losses of up to USD 563 million (22% of revenue) and USD 233 million (24%) respectively by 2019. There is. 2035.
The first-of-its-kind report aims to build bridges between Earth system science and business impact, from profitability to supply chain stability to impact on the societies they serve. The purpose is
This report aims to help business leaders recognize that the longevity of companies and economies is inextricably tied to the stability of society and the natural environment in which they operate, and to encourage businesses to decarbonise their businesses, invest in and restore nature. It aims to help people act quickly and collaboratively to build capacity and adapt. Impact on risks from climate disasters.
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At current levels of warming, five Earth systems are facing irreversible tipping points. This report includes five landscape overviews that outline the business implications of Earth system tipping points, focusing on land ice, sea ice, ocean circulation, coral reefs, and permafrost.
The seven industry overviews provide a more detailed view of the impact and recommendations for the most affected industries. Food, drinks, and utilities. infrastructure and transportation. Telecommunications. Life science. And travel.
The report also provides a comprehensive assessment of supply chain risks in five socio-economic systems: agriculture, built environment, technology, healthcare and financial services.
Professor Whiteman is the University’s inaugural Hoffman Impact Professor, a unique role focused on strengthening industry support for low-carbon activities. The team also included Dr Helen Millman, Polar Hoffman Fellow (World Economic Forum Contributor), and Professor Chendi Chan, Director of the Exeter Center for Sustainable Finance.
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Brendan Montague is the editor ecologist. This article is based on a press release from the University of Essex.
