Last year, more than 800 major weather-related disasters around the world led to over $130 billion in losses. These extreme weather events can be debilitating for businesses, as they disrupt a company’s operations, facilities, logistics, and supply chains. C2ES’ report, Weathering the Storm: Building Business Resilience to Climate Change, provides a detailed look at the current state of resilience planning among global companies and suggests some steps they can take to better assess and manage the climate change risks they will increasingly continue to face. [Check out an infographic based on the report here!]
The report finds that 90% of companies on the S&P Global 100 Index cite extreme weather and climate change as a current or future business risk and 62% indicate that they are presently experiencing the impacts of climate change or expect to in the next decade. Companies appear to be most concerned about the direct impacts of extreme weather on property, production and supplies, and indirect impacts on operational costs (e.g. higher prices for commodities or insurance). However, only a few have used climate-specific tools to assess their risks comprehensively. On the other hand, 75% of companies also say that they foresee new opportunities from a changing climate, such as drought-resistant crops.
Recommendations include creating a clearinghouse for reliable, up-to-date data and analytical tools, investing in public infrastructure and resilience, considering resilience needs in regulation, and setting up voluntary public-private partnerships to improve planning.
Does this mean companies will be taking a more proactive role in climate policy? The Harvard Business Review believes so. In a recent blog post about the Climate Declaration (from Business for Innovative Climate & Energy Policy, a project of Ceres), which states that “tackling climate change is one of America’s greatest opportunities of the 21st century,” they write that this fresh attempt at encouraging companies to lobby for climate action is gaining steam, especially after President Obama’s climate speech in June. They suggest that many corporate leaders see climate change as a risk today and that it makes strategic sense to engage in the discussion now. Leading companies realize that taking action on climate change will save money, improve efficiency, and drive innovation – keeping their country competitive in the global market.