Business on the Edge 2024

High Low 2035 2055 High Low14 2 2 23 20 14 12 Extreme heat Wildfire Coastal flooding Tropical cyclone Water stress Drought Fluvial floodingLife sciences Impacts on healthcare access Climate hazards lead to disruptions in the supply of critical medications, vaccines and medical equipment. As a result, healthcare facilities may experience shortages, hindering access to critical treatments. This can leave populations unable to receive essential medical care, further straining public health systems.Widening social and health inequalities Climate hazards disproportionately affect marginalized communities, worsening pre-existing social and health inequalities. Socio-economic disparities in healthcare are expected to grow and bridging the gaps to vulnerable communities will become more difficult to achieve.Strain on mental health Communities facing repeated climate- related disasters experience heightened stress, trauma and anxiety. The provision of equitable access to mental health resources for communities facing the destabilizing effects of climate change remains a key societal challenge.Financial overview Average company EBITA margin (2023) Total industry fixed assets value (2023) Average company fixed assets value (2023)16.7% $605.5 billion $2.3 billion Sector overview The life sciences industry consists of companies operating in the research, development and manufacturing of medicines and pharmaceuticals, biotechnology, medical devices, biomedical technologies, nutraceuticals, cosmeceuticals and other products that improve the lives of organisms. Financial implications of climate hazards Financial losses driven by climate hazards set to climb steadily Average listed life sciences company fixed asset losses under low and high emissions scenarios ($ million per year; 2035, 2045, 2055) Extreme heat is the major driver of financial losses Estimated fixed asset losses for all listed life sciences companies under high and low emissions scenarios, by climate hazard ($ billion per year; 2035, 2055) Notes: Analysis of n=262 listed life sciences companies. Source: S&P Global Sustainable1, Accenture analysis.Rising climate-related losses could significantly dent profitability Fixed asset losses as a proportion of EBITA under low and high emissions scenarios (% EBITA per year; 2035, 2045, 2055) Societal implications of climate hazardsLow High (additional losses) Total losses (High)20557025 203556 20456010 95 70604 2.9%3.1% 3.1%3.6% 3.6%4.8% 2035 2045 2055 Low High By 2035, the average listed life sciences company is expected to face fixed asset losses of $56–60 million per year due to climate hazards, increasing to $60–70 million by 2045 and $70–95 million by 2055, depending on the emissions scenario. This growing financial burden underscores the need for resilience strategies to protect production facilities and research. The losses to property, plant and equipment are set to equate to 2.9–3.1% of earnings by 2035, potentially affecting strategic planning. Extreme heat will be the primary driver of these losses, accounting for $12–14 billion (83–86%) of the industry total in 2035, highlighting the need for advanced cooling technologies and heat-resistant infrastructure. Fluvial flooding is expected to drive 10–12% of annual losses in 2035, emphasizing the importance of robust flood defences and water management. Business on the Edge: Building Industry Resilience to Climate Hazards 55