Into the Trillions — The Cost of Climate Change Is Growing
More than 7,000 companies have submitted reports explaining how global warming will hurt the planet and damage their businesses financially.
The New York Times recapped the data from CDP, formerly the Carbon Disclosure Project, stating: “Under pressure from shareholders and regulators, companies are increasingly disclosing the specific financial impacts they could face as the planet warms, such as extreme weather that could disrupt their supply chains or stricter climate regulations that could hurt the value of coal, oil and gas investments. Early estimates suggest that trillions of dollars may ultimately be at stake.”
By the numbers:
- $250 billion: The amount of assets the world’s largest companies estimate could be written off or retired early as global warming continues (like “buildings in high-risk flood zones, or power plants that may have to shut down in response to tighter pollution rules,” according to the Times.)
- $1 trillion: Costs related to climate change that 215 of the world’s 500 biggest corporations will face in the decades ahead unless they change their processes.
- $2.1 trillion: The amount of money-making potential the world’s largest corporations stand to gain by tackling problems caused by global warming.
- $30 trillion: ING Group’s estimate for the global cost of new investments in clean energy and energy efficiency.
Okay, Some Specifics:
The Times reported that plenty of companies are “bracing for direct impacts.” Here are just some of the specific examples highlighted in the article:
- Alphabet (parent company of Google) said higher temperatures will make it more expensive to cool data centers.
- Hitachi said “increased rainfall and flooding in Southeast Asia had the potential to knock out suppliers and that it was taking defensive measures as a result,” said the Times.
- French energy company Total said governmental efforts to curb global warming could make some of its oil and gas fields unburnable.
Quotable: “The numbers that we’re seeing are already huge, but it’s clear that this is just the tip of the iceberg,” said Bruno Sarda, North America president for CDP, the international nonprofit that wrote the new report.
There’s no shortage of material about the rising cost of global warming and extreme weather events.
In February, Morgan Stanley reported that climate disasters have cost $650 billion in just the past three years — much of that damage has hit North America, where hurricanes and wildfires have been persistent.
That same month, the National Oceanic and Atmospheric Administration (NOAA) reported that the number of weather disasters costing $1 billion or more is increasing at an alarming rate.
In fact, the NOAA found that there were at least 12 billion-dollar disasters in each of the past five years. From 1980 to 2013, the annual average was just six.
How can business leaders help curb climate change and the devastating natural disasters they bring? Inc. offered six ways to climate-change-proof your business — like creating a distributed workforce and protecting critical equipment.
But it starts with taking their heads out of the sand. &