CDP Report Shows a Growing Number of Companies See the Risks Posed by Climate Change

The 2012 Carbon Disclosure Project (CDP) report indicates that the threats associated with climate change are increasingly being factored as corporate risks. According to the CDP report, a growing number of global businesses understand that environmental concerns represent a “real and present” danger to their operations.

Companies are increasingly coming to terms with the risks associated with climate change. The New York Times blog reports that the total cost of the floods in Thailand last year was $15 billion to $20 billion. The automaker Daimler said the floods disrupted the automotive supply industry. Hewlett-Packard and Dell both said that the flooding resulted in shortages of critical components and materials.

The number of companies integrating climate change factors into their overall business strategies rose by 10 percent over the past year, contributing to a reported 13.8 percent reduction in corporate GHG emissions between 2009 and 2012.

More than three-quarters (81 percent) of the world’s largest public companies indicate that climate change poses “physical risks” to their business. Risks from climate change include flooding, drought and fires. It is interesting to note that 37 percent of the 405 companies reporting to CDP list those factors as a serious threat, up from 10 percent in 2012. An additional 53 percent also saw risks related to the adoption of new customer habits and perceptions of their firm.

Weather-related catastrophes are significant and it is predicted that these extreme weather events will increase with advancing climate change. In 2011, the German insurer Allianz paid out $2.2 billion in claims relating to natural catastrophes, its largest ever.

“Extreme weather events are causing significant financial damage to markets,” said Paul Simpson, CEO of the CDP. “Investors therefore expect corporations to think more about climate resilience,” he said. “There are still leaders and laggards but the economic driver for action is growing, as is the number of investors requesting emissions data. Governments seeking to build strong economies should take note.”

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© 2012, Richard Matthews. All rights reserved.

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