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Climate change is threatening: Companies must act now or lose millions!
New reports warn that without climate adaptation strategies, companies could lose up to $610 billion by 2035. Resilience is crucial.
Climate change is threatening: Companies must act now or lose millions!
An alarming new report shows that without resilience strategies, companies could lose up to seven percent of their profits annually by 2035. This represents a loss of up to $610 billion, mostly in the telecommunications, energy and utilities sectors. According to the report “Business on the Edge: Building Industry Resilience to Climate Hazards,” increasing heat and other climate-related risks pose a serious threat to financial stability, accompanied by transition risks that will weigh on companies in energy-intensive sectors. CO2 pricing could even reduce profits in these sectors by up to 50 percent by 2030, as the Potsdam Institute for Climate Impact Research PIK confirms. These findings were also supported by the World Economic Forum, as on deutschesklimaportal.de reported.
Urgent need for action
According to leading researchers, including Johan Rockström from PIK, five critical Earth systems are already on the threshold of irreversible tipping points, including the ice sheets of Greenland and West Antarctica. This not only has an impact on climate change, but also endangers the economic stability of global markets. However, investing in climate adaptation can be lucrative for companies: every dollar invested could avoid losses of up to $19. Green markets are also expected to grow from $5 trillion in 2024 to $14 trillion by 2030. Companies that invest in sustainable solutions and adaptation strategies at an early stage can secure a decisive competitive advantage, as PIK emphasizes in its analysis.
The message is clear: To counteract the impending economic crisis caused by climate risks, companies need effective risk mitigation strategies immediately. The lack of appropriate measures could not only jeopardize their profits, but also affect the resilience of the entire economy. This requires a serious engagement with the challenges of climate change and the pursuit of sustainable solutions. For more information on this topic, see the reports on oekonews.at.