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Climate Change Could Cost Business Almost $1 Trillion

Climate change activists protest outside the government's treasury building in London, April 25, 2019, during demonstrations led by the Extinction Rebellion group. (Daniel LEAL-OLIVAS / AFP)
Climate Change Could Cost Business Almost $1Trillion
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More than 200 of the world’s largest companies predict that climate change could cost them a combined total of almost $1 trillion.

That is a finding from a report released earlier this week. The report predicts that most of the money will be needed in the next five years.

A Britain-based aid group called CDP did the study. The group was once known as the Carbon Disclosure Project.

The new report suggests that many companies still underestimate the dangers of climate change. Scientists warn that, without major cuts to carbon emissions, earth’s climate is likely to experience more changes.

Nicolette Bartlett is CDP’s director of climate change and the writer of the report. She said, “Most companies still have a long way to go in terms of properly assessing climate risk.” The Reuters news agency reported her comments.

CDP is a respected voice in a growing coalition of pressure groups, central bankers and other people who believe climate change creates a systemic risk to the financial industry.

CDP is urging business leaders to face the possibility of rising temperatures and other changes, and to consider risks to their operations. Its goal is to increase investment in cleaner industries. The group hopes this can cut the release of carbon dioxide and other industrial gasses in time to meet climate goals worldwide.

In its latest study, CDP examined information from 215 of the world’s largest businesses, including Apple, Microsoft, Unilever, China Mobile, Sony and BHP.

These companies predicted a total of $970 billion in extra costs would result from higher temperatures, weather changes and pricing of carbon gas emissions. About half of these costs were seen as likely to almost sure.

Many companies noted a strong likelihood of success if the world can de-carbonize in time to prevent the worst effects of climate changes. Scientists consider this to be the end of industrial civilization.

The great transition

Investor concerns over climate risk have risen sharply at a time of rising climate activism in many countries. Heat waves, extremely dry weather, wildfires and super-storms driven by climate change have become harder to ignore.

FILE - Burned cars left by their drivers sit along a road in Paradise, California after a wildfire burned much of the town in November of 2018.
FILE - Burned cars left by their drivers sit along a road in Paradise, California after a wildfire burned much of the town in November of 2018.

The CDP aligned its questions to businesses with the reporting requirements of the Taskforce on Climate-related Financial Disclosures. The Group of 20 countries launched the Taskforce in 2015.

British-based CDP said its research cannot provide a perfect picture of companies’ thinking because their climate risk disclosures are voluntary. The group added that it depends on the information business leaders are willing to share.

But the group argues that the amount to which companies are willing to disclose provides a measure to judge the relative openness of different industries. And, CDP said, the exercise creates pressure on companies to disclose more freely.

The report found that no industry was entirely transparent on climate risk. It said financial services companies seemed to be the most open among the businesses responding

Fossil fuel companies that provided responses to the study reported $140 billion of possible economic gains in the drive toward a low-carbon economy. The CDP said that number is more than five times the $25 billion value of the risks they identified.

I’m Caty Weaver.

Reuters News Agency reported this story. Caty Weaver adapted it for VOA Learning English. George Grow was the editor.


Words in This Story

emission - n.the act of producing or sending out something (such as energy or gas) from a source​

properly - adv. in a way that is accurate or correct​

assess - v. to make a judgment about (something)​

disclosure - n. the act of making something known : the act of disclosing something​

transparent - adj. honest and open: not secretive​

respond - v. to say or write something as an answer to a question or request​