Giving Compass' Take:
- Ameer Azim and Maria Troya explain how businesses can protect themselves in the face of policy changes due to climate change.
- How can businesses invest in systemic change to mitigate the impacts of climate change? How can you help hold businesses accountable to their promises?
- Read more about businesses and climate change.
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Rising global temperatures have been affecting climate patterns for decades. The frequency and severity of acute events, such as wildfires on the western coast of the U.S. or 1-in-1,000-year rainfall events in Dallas show that the impacts of these small but accumulative changes in climatic conditions are picking up pace. It’s not only the acute events that we are witnessing. Chronic physical risks, such as sea level rise, glacial melts and resultant flooding, are causing havoc in low-income countries.
BSR’s three climate scenario narratives explore the worsening physical impacts of climate change. These impacts are nearly identical over the next decade. However, climate modeling data suggests the possibility of a radically better pathway if we raise our current climate policy ambitions.
Even in the most ambitious policy scenario, "Net Zero 2050," the world suffers from the "locked-in" physical impacts resulting from emissions that have already been released into the atmosphere. It is only by the mid-2030s that physical impacts start to diverge because of increased ambition. While business will have to prepare for physical impacts over the next decade, they must take bold action now to prevent irreversible and potentially catastrophic consequences in the long-term.
The financial impact on business is yet to be fully considered. Natural disasters, disruptions to supply chains, a need for increased cooling, water scarcity and increased environmental costs are all examples of climate-related costs driving down national GDPs. Scenario analysis points to these costs increasing in emerging and advanced economies alike. Eventually, these costs will trickle down to the bottom line of businesses globally.
For example, data suggest that in the absence of business investment, there is likely to be a decrease in labor productivity and economic activity. The "Current Policies" scenario , which assumes a continuation of 2020 climate policies, sees a significant loss of labor productivity due to heat stress, with as much as a 12 percent global decline by the end of the century. By contrast, in the Net Zero 2050 scenario, impacts on labor productivity would stabilize from 2035 onward.
Read the full article about climate risk by Ameer Azim and Maria Troya at GreenBiz.