Hottest year on record ‘bad news for business’

As Nasa figures reveal 2014 was the hottest year on record, the World Resources Institute (WRI) says the soaring temperatures will soon have a heavy cost for businesses.

The analysis, published on Friday (16 January) by Nasa and Noaa researchers, confirmed that last month was the warmest December since records began in 1880; while annual temperatures have been above the 20th-century average every year since 1976.

Writing in a blog post, WRI managing director Manish Bapna and analyst C. Forbes Tompkins said this long-running record heat will contribute to an “expensive new normal for businesses”, thanks to extreme droughts, storms and heawaves.

From 1980 to 2014, there were 178 ‘weather events’ that cost $1bn or more in the US alone, with seven of the 10 costliest years of weather and climate disasters occurring since 2000.

The 2013 UK floods cost insurers more than £1bn, while recent research suggested that at only nine of 330 global insurance firms (3%) have established a strong internal plan to deal with looming climate risks.

And its not just insurance companies who face climate risk – the supply chains of many firms are vulnerable to extreme weather events. The WRI blog points to recent research by Dr. Pepper Snapple Group, which found the potential change in weather and water availability put $2.5bn of cost of sales at risk.

Likewise, computer manufacturer HP experienced a 7% decline in quarterly revenues in large part attributed to the 2011 floods in Thailand.

Economic benefits

In the blog, Bapna and Tompkins suggest that businesses committing to reducing emissions can reap the benefits financially, as well as preserving the planet

“Opponents have a long, successful history of styling climate action, including putting a price on carbon, as being bad for the economy or costing jobs,” they write. “Yet, the sweeping New Climate Economy Report shows this is simply incorrect, and that climate action can bring economic benefits.

“By urging governments and other stakeholders to enact responsible policies on climate, multi-national corporations can help shift public perception away from the false dichotomy of ‘environment v economy’ and create the political conditions for progress.”

The UN climate summit in Paris in December has become the focus for policymakers and campaigners alike, with nations coming together to agree on a global roadmap to reduce emissions from human activities and prevent dangerous climate change.

Brad Allen

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