Friday, 13 December 2024.
About one month to go before its next annual meeting, the World Economic Forum (WEF) publishes a new report.
“The Cost of Inaction: A CEO Guide to Navigating Climate Risk”.
This is the title of the report published last 11 December 2024 and developed by the WEF’s Alliance of CEO Climate Leaders in collaboration with Boston Consulting Group (BCG).
“Climate risks are no longer a distant threat; they are unfolding now, disrupting industries worldwide. Climate-related disasters have inflicted over $3.6 trillion in damage since 2000, with risks accelerating. For businesses, physical risks like extreme weather events and transition risks such as rising carbon pricing are already transforming markets and reshaping business models.”
This is how WEF press release starts.
By the way, you may have seen this interesting regulatory movement in Italy, where as of January 2025 businesses are required to purchase climate insurance to protect their assets from natural disasters such as “i sismi, le alluvioni, le frane, le inondazioni, le esondazioni”.
BCG also posted about what they refer to as “BCG-WEF Project: CEO Climate Leaders”, adding that global GDP could take a cumulative hit of 16% to 22% by the end of the century due to economic damages caused by climate-related disasters, if no action taken (*).
“Climate change presents a dual threat to businesses: physical risks from extreme weather, and transition risks from the necessary global shift to a low-carbon economy” adds BGC in its press release, that you can read here, including some great exhibits.
One of the exhibits - whose source is Swiss RE, S&P Global Sustainable, Oxford Economics, Capital IQ and BCG analysis - shows estimates of the economic impact from asset damage and business interruption from wildfire, heat, coastal flooding, fluvial flooding, cyclones, water stress, and droughts vs. the historical baseline normalized to today, individualized:
per region: Europe, North America, South America, Asia-Pacific, Africa and Middle East
and sectors: Communication services, Utilities, Construction & Infrastructure, Materials, Food & Beverages, Oil & Gas, Health Care, Industrials
Worth giving a look how your sector stands.
All in all, there is a lot interesting included in the report, but maybe the apex is the so-called “CEO Climate Leaders Guidebook”.
Click at the image below to access the 58-pages report for download.
Quoted above, the World Economic Forum Annual Meeting will occur in Davos, Switzerland, from 20 to 24 January 2025, with the theme "Collaboration for the Intelligent Age”.
Let’s follow up which concrete actions will be taken, recalling BGC’s above alert (*).
