More than 200 of the world’s largest companies see over $1 trillion in costs related to the climate crisis, according to a new analysis of corporate disclosures. Much of those costs are anticipated within the next five years.
Large companies are facing pressure to disclose the financial impacts they could face as extreme weather becomes routine. The climate crisis has the potential to disrupt supply chains or diminish investments in fossil fuels, according to the New York Times.
The new report by the charity CDP, formerly the Carbon Disclosure Project, suggested companies routinely downplay the effects that Earth’s climate crisis will have on their specific business. Many companies fail to account for the catastrophic damage likely to occur without rapid cuts in carbon emissions, according to Reuters.
“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, as the New York Times reported.
More than 7,000 companies submitted reports to CDP tackling their risks and opportunities due to the climate crisis — some of the responses came from Microsoft, Apple, JP Morgan Chase and Visa, according to CNN.
The largest 215 companies to respond identified nearly $970 billion in potential costs due to the climate crisis, with the caveat that some of the world’s largest firms have not yet studied the issue seriously.
Several companies laid out foreseeable problems, such as droughts rendering borrowers unable to pay back bank loans, skyrocketing costs of cooling data centers in ever hotter temperatures, and flooding and rainfall knocking out supply lines, the New York Times reports. Other companies expect future regulations and laws aimed at thwarting the climate crisis to restrict areas open to exploitation.
“Our collective response to climate change is more urgent than ever, and it is clear that corporate action cannot be delayed,” Nicolette Bartlett, director of climate change at CDP, said in a statement, as reported by CNN. “It is hugely encouraging that companies are reporting that the potential value of climate opportunities far outweigh the costs,” she added.
In fact, the largest 225 companies to respond saw an opportunity in responding to the climate crisis worth $2.1 trillion, CNN reports. Many of the opportunities are in low-emission vehicles and renewable energies. Fossil fuel companies reported $140 billion of potential opportunities in the drive toward a low-carbon economy — more than five times the $25 billion value of the risks they identified, CDP said, as reported by Reuters.
And, some see profit in human suffering. The pharmaceutical company Eli Lilly, for example, expects a rise in infectious diseases, which will increase demand for their products, as The New York Times reports.