$1 trillion business costs from Climate Change
200 plus of the planet’s most prominent companies forecast climate change could cost a total of almost $1 trillion, according to a report published by charity CDP on Tuesday. Included in the report are signs many companies still can’t see the financial dangers of climate change.
“Most companies still have a long way to go in terms of properly assessing climate risk,” said Nicolette Bartlett, CDP’s director of climate change, who authored the report.
CDP analysed data from 215 of the largest companies, including Apple, Microsoft, Unilever, UBS, Nestle, China Mobile, Infosys, Sony and BHP.
Hotter temperatures, chaotic weather, and pricing of greenhouse gas emissions are some of the issues causing potential financial losses.
- Hitachi Ltd. suggested increased rainfall and flooding in Southeast Asia had the potential to knock out suppliers and that it was taking defensive measures as a result.
- Banco Santander Brasil, said increasingly severe droughts in the region might affect the ability of borrowers to repay loans.
- Alphabet, Inc., Google’s parent company, think rising temperatures could increase the cost of cooling its data centres.
It looks like many businesses are not up to speed in collecting and analysing data to assess the monetary effects of climate change.
“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, the North America president for CDP.
The silver lining of the storm cloud
However, amongst the financial gloom, there seems to be a flipside. There is always the opportunity to profit in the face of adversity.
Eli Lilly, a drug maker in the United States, cited research suggesting that rising temperatures could drive the spread of infectious diseases. “This may then increase demand for certain medicines we produce,” the firm said.
ING Group estimated that the shift to a low-carbon economy could require $30 trillion in new investments toward clean energy and energy efficiency worldwide. As a result, ING aims to double its “climate finance portfolio” by 2022.