New approaches to help businesses tackle climate change
According to early findings from Cambridge researchers, climate change could add around 20% to the global cost of extreme weather events by 2040. The researchers urge businesses to evaluate their own exposures to the growing risk to improve their resilience and sustainability.
The findings come from the Cambridge Climate Change Business Risk Index, a new component of the Cambridge Global Risk Index. The index is developed by the Centre for Risk Studies, with Cambridge Zero and British Antarctic Survey. The index incorporates climate model outputs to analyse and quantify the increasing risks of extreme weather events, and their potential to disrupt business operations and supply chains globally.
For example, the index shows that, by 2040, businesses in Chicago can expect a 50% chance of having an additional 20 days a year where average temperatures will exceed 25ºC and an additional week of days above 30ºC. It is expected that climate change will add around 20% to the global cost of extreme weather events, such as storms, floods, heatwaves and droughts. It is estimated that extreme weather events will increase from reported losses at present running at an average of around $195 billion a year in direct costs to $234 billion by 2040, an increase of $39 billion a year at today’s values.
If the indirect costs from supply chain disruption and other knock-on economic consequences are factored in, it is possible that climate change could add over $100 billion of loss each year to the global economy. Accurately quantifying this kind of information on business-relevant timescales will help businesses plan for their increased exposure to heatwaves and other climate-related risks.
Climate change is a growing concern for businesses. Many corporations are trying to understand how it is likely to affect them, the actions that they may need to undertake for sustainability as well as commercial and competitive reasons, and the regulatory requirements or other liabilities they may face.
(Content Courtesy: https://www.cam.ac.uk/research/news/new-approaches-to-help-businesses-tackle-climate-change)