Climate Change Disrupts Businesses Worldwide, Costs Soar

Climate change is increasingly disrupting businesses worldwide, with recent events highlighting the urgent need for adaptation. In Canada, wildfires forced evacuations of oil sands projects in Alberta, while in the U.S., disaster recovery costs have soared to nearly $1 trillion. Meanwhile, companies in South America and the Middle East and North Africa are bracing for climate-related risks and impacts.

A survey revealed that nearly 90% of South American companies anticipate climate change to pose a risk to their business models by the end of the decade. In the Middle East and North Africa, companies reported the highest rates of viewing sustainability as a key driver of value creation. The main impacts of climate change on businesses include increased costs, worker disruption, and revenue losses.

Leading climate disruptions affecting businesses are extreme heat, storms, wildfires, water shortages, and flooding. In 2022, a flood led Toyota to file a lawsuit for over $360 million in damages in South Africa. Following the 2024 hurricane season, nearly two-thirds of businesses in the Tampa metro area reported losses due to extreme weather. Over half of the firms surveyed by Morgan Stanley experienced climate change impacts on operations within the past year. Extreme heat is also forcing Australian mining companies to adapt their operations.

These developments underscore the growing reality of climate change's impact on businesses worldwide. Companies are increasingly facing disruptions and financial losses, driving a need for proactive adaptation and mitigation strategies. As climate change continues to pose significant risks, businesses must integrate sustainability into their operations and long-term planning.