Climate change isn’t just causing the ice caps to melt; it’s costing corporations big bucks and forcing some to factor its likely impact into their long-term plans.
A new report from the Carbon Disclosure Project (CDP) released Friday says 63 of America’s S&P 500 companies are already paying to counter the effects of climate change. The past few years of extreme drought, stronger hurricanes and severe flooding have caused immense damage to some businesses’ core assets, requiring millions of dollars in repairs and threatening billions more in future profits.
"Dealing with climate change is now a cost of doing business" Tom Carnac, president of CDP in North America, said in a news release.
"Making investments in climate-change-related resilience planning both in their own operations and in the supply chain has become crucial for all corporations to manage this increasing risk."
CDP is a nonprofit organization that discloses the environmental impact of companies around the world and works with them to reduce their environmental footprint. Friday’s report is based on a comparison of survey results from 2011 to 2013, in which companies listed the potential risk they faced from climate change.
According to the report, companies see the risks associated with climate change to be "increasing in urgency."
In 2013, companies believed there was a 45 percent chance that events relating to climate change — such as a major drought, wildfire, hurricane or other weather event — would have an impact on their businesses either immediately or within the next five years. That’s almost double the perceived risk from 2011, when companies believed climate change only had a 26 percent chance of impacting their operations.
The New York utility company, Consolidated Edison, spent more than $431 million to repair damages caused by Superstorm Sandy in 2012.
That same year, Sears Holdings Corp. reported more than $14 million in expenses as a result of repair work and building replacement, describing the costs as “the direct or indirect result of extreme weather.”
Tech retailer Best Buy said that 242 of its stores were impacted negatively in some way by climate change in 2011. Meanwhile, Home Depot said it lost as much as $100,000 per store for each day a location was closed due to a storm.
Wildfires cost natural gas company Sempra Energy more than $1.1 billion in liability insurance coverage in San Diego, and flooding in Thailand ate 7 percent of Hewlett-Packard Co.’s profits in 2011.
"Corporate America is really being impacted by climate change; it knows what the costs are and it’s already passing those costs on to their customers," said Zoe Tcholak-Antitch, a communications representative for CDP.
"If you look at this report, you can see that corporate America, the people who work for corporate America and all the people around the world are not immune to the effects of climate change,” she said. “In the absence of a national plan to deal with climate change, this is something they will continue to deal with."
Tcholak-Antitch told Al Jazeera that companies have been investing in resilience planning to better prepare for future climate change. Many have even invested in emission reductions as a result of the changing environment.
Gary Yohe, a professor of economics and environmental studies at Wesleyan University, said consumers should be just as worried as businesses about the effects of climate change.
"The cost to the consumer of responding to an unabated trajectory of climate change … is extra costs added to a product," Yohe said.
"If we don’t do anything, we’re looking at decisions five years from now that are much more severe. Since the last national climate assessment, there has been acceleration of intensity and frequency of extreme weather events, some of which can be attributed to human influence."
Both Tcholak-Antitch and Yohe believe the stakes are high. A report released by NASA on Monday said that as a result of climate change glacier melting in western Antarctica is now "unstoppable" and will lead to worldwide sea level rise far sooner than previously estimated.
The Center for Naval Analyses published a report on Wednesday that characterized the effects of climate change as a "threat to national security," and the Standard & Poor’s Rating Services warned Thursday it would begin factoring the impact of climate change on a nation’s credit rating.
Yohe worries that people are not fully grasping the scale of danger from climate change, and is frustrated that the science community hasn't done more to warn people.
Climate change is putting lives at risk, he told Al Jazeera.
"That wakes me up at 3 in the morning. If we don’t do anything, the damage will be increasingly severe."