Climate change is already having an impact on companies around the world.
Over half of the firms surveyed in a recent Morgan Stanley report ex
perienced the climate’s impact on operations within the past year,
including increased costs, worker disruption and revenue losses. The growing financial impacts are a key reason some com
panies are continuing to pursue emissions cuts and adapt to a warmin
g world even amidst political turbulence, the survey found.
Extreme heat and storms were the leading disruptions, followed by wildfires and smoke, water shortage, a
nd flooding or rising sea levels, according to the new report. The US alone has spent nearly $1 trillion on disaster recovery and other climate-related needs ove
gence analysis found. Data collected by the US Census Bureau shows how these impacts can play out locally: For example, nearly two-thirds of businesses in the Tam
a metro area surveyed reported losses due to extreme weather following last year’s hurricane season when Helene a
nd Milton made landfall on Florida’s west coast.
The impacts are hardly limited to companies operating in the US. This year’s Canadian wildfires forced evacuation
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s of oil sands projects in Alberta, Canada, while a disastrous 2022 flood
recently led Toyota to file a lawsuit for over $360 million in damages in So
uth Africa. Extreme heat is forcing Australian mining companies to adapt their operations.
The Morgan Stanley report also included for the first time impacts in the Middle East, North Africa and South America.
The findings show nearly 90% of South American companies expect climate change to be a risk to their business mode
ls by the end of the decade. Companies ranked raw material availability and pricing, as well as the risk of existing manufactu
ring processes becoming obsolete among their top concerns. While being the areas most likely to experience extreme we
ather, the Middle East and North Africa reported the highest rates of viewing sustainability as a driver of value creation.