Business on the Edge 2024

Commitments and investment to decarbonize economies and mitigate further global heating remain an urgent priority and efforts need to intensify. However, Earth systems are already on the move and face irreversible tipping points. Five of these systems may already have passed the point of no return, presenting a new outlook for the frequency and severity of climate hazards with a direct impact on business and societies globally. Increased awareness and action to build resilience and adapt to climate hazards becomes more urgent by the day, with material business, economic and social losses growing in the coming decade. As illustrated in this report, fixed asset losses alone equate to a drop in earnings for the average company of approximately 7% every year by 2035 – rising to over 20% in some capital- intensive industries. The implications for the economic, social and financial systems humanity depends on are far- reaching. The science behind climate hazards and Earth system tipping points can be difficult to translate into direct business and societal risks against which C-suites can make informed decisions to safeguard, sustain and grow stakeholder value. This report helps businesses to understand the uncertainties and opportunities, and to navigate from climate risk towards sustained commercial and societal prosperity. It serves as a starting point from which to improve governance, decision-making and collaboration for resilience and adaptation – in support of not only company valuations but also the communities that companies serve. The interconnectedness of highlighted Earth systems and the cascading nature of climate hazards necessitates a holistic approach – a conclusion also reached by the Forum’s December 2024 report, The Cost of Inaction: A CEO Guide to Navigating Climate Risk. This report has reviewed the consequences of climate hazards across five socio-economic systems to help identify system- specific recommendations, supported by examples of what progressive companies are already doing. Using the framework developed in the World Economic Forum’s January 2023 white paper Accelerating Business Action on Climate Change Adaptation, these recommendations can be summarized into three universal pillars: 1. Avoid economic loss through enhancing resilience. 2. Increase revenues and sustainability through adaptation. 3. Collaborate to protect communities and ecosystems, through resilience and adaptation. Pursuing such recommendations will require new enablers that every business leader should be activating within the next 24 months to drive better C-suite decision-making (see Figure 23). As companies review enterprise risk management strategies and investment decisions, collaboration and effective solutions for the communities in which they already operate can still be the fastest route to safeguarding returns, goodwill and continued growth.Conclusion and recommendations With five of Earth’s systems on the brink of tipping irreversibly, business leaders must act swiftly and collaboratively to decarbonize operations, safeguard nature, build resilient value chains and adapt to climate risks. Business on the Edge: Building Industry Resilience to Climate Hazards 45