CLIMATE RISKS: Situation in Businesses
Less than half of companies have identified climate risks that they believe would have a significant financial or strategic impact and do not prioritize climate change adaptation, according to a new report.
This is despite the fact that lack of climate change mitigation and adaptation and extreme weather events are among the top global risks for the next decade. The threat posed by the effects of extreme weather events emerged as the top global risk in 2024, closely followed by artificial intelligence-driven misinformation and disinformation, according to the Global Risks Report produced by the World Economic Forum.
The consequences are already affecting billions of people. Extreme weather, AI-generated misinformation, cost-of-living crisis, cyber-attacks and socio-political polarization are already upon us.
Taking Stock of Business Efforts to Adapt to Climate Change surveyed 30 large companies around the world to find out how they are acting on the climate change adaptation framework.
The study finds that many are exploring adaptation through climate risk assessments, opportunity analyses or community projects. About half of the respondents are taking meaningful action, but “not necessarily in the way the international community would expect or need.”
Companies are developing opportunities to improve efficiency, generate value through products and services, or maximize sustainability outcomes. While only a small number are making substantial investments in adaptation projects to improve their own resilience or that of their operating communities.
In short, there is a disconnect: companies are approaching adaptation from an opportunity perspective, while governments are trying to get them to take more action from a risk perspective.
“It is clear that business action is not yet matching the urgent need for adaptation,” the report warns.
“It is time for action. Governments, businesses, civil society and other organizations share an interest in preparing for the effects of climate change, and each can bring different strengths to the table. By collaborating, they can make the most of their respective strengths and accelerate adaptation measures.”
Do you have any idea where you stand in the face of your climate risks?