Climate Adaptation Unlocking Value Chains with the Power of Technology 2025

2024 was the first calendar year to exceed 1.5°C above pre-industrial levels.predicts that extreme weather events could exceed 560 per year – well over one per day – by 2030.8 Since 2000, reported costs of damage from extreme weather events linked to human-driven climate change have nearly tripled, rising from $149 billion between 2000 and 2004 to a projected $435 billion for 2020-2024.9 In 2024 alone, storms and heavy rains caused flooding in Europe, UAE, Kenya and Brazil; heatwaves and wildfires ravaged North America and South America; while hurricanes and typhoons endangered millions of people across Asia and North America. These disasters have had devastating impacts on communities and businesses.10 Nearly every sector of the global economy faces physical risks from climate change and, in many cases, the risks are already reality. By 2050, in the >3.0°C scenario, companies in several industries – such as telecommunications, utilities, food and beverages and construction – could see their profits (EBITDA) plunge by between 5% and 25% annually (see Figure 2).11 Physical risks could harm 5-25% of EBITDA under current trajectory (by sector and region) FIGURE 2 Notes: Estimates include economic impact from asset damage and business interruption from wildfire, heat, coastal flooding, fluvial flooding, cyclones, water stress and droughts vs. historical baseline normalized to today. >3°C scenario is based on SSP3.7-0, which is a moderate- to high-emissions scenario projecting temperature increases of 1.7-2.6°C by 2050 and 2.8-4.6°C by 2100. Translation of impact from % of asset value to EBITDA margin is carried out using sector benchmarks on median fixed asset turnover ratios (FAT) and EBITDA margins assuming sector and regional composition in 2050 is identical to current levels. Individual company impact estimates can vary vs. sector estimates shown here depending on differences in e.g. share of fixed assets and EBITDA margins vs. benchmarks. See Appendix for methodology and sources. Source: World Economic Forum. (2024). The Cost of Inaction: A CEO Guide to Navigating Climate Risk.125-10%Average financial impact of physical risks by 2050 % yearly EBITDA at risk vs. today in a >3°C (curr ent trajectory) vs. <2°C (Paris-target) scenario Europe North America South America Asia-Pacific Africa & Middle East Sectoral average10-15 % 10-15 % <5% 5-10% 5-10% <5% <5% 5-10% 10-15 % 10-15 % <5% 5-10% <5% <5% <5% 10-15 % 15-20 % 15-20 % 5-10% 10-15 % 5-10% 5-10% 5-10% 10-15 % >25% >25% 5-10% 10-15 % 5-10% 5-10% 5-10%Communication services Utilities Construction & infrastructure Materials Food & beverages Oil & gas Healthcare Industrials 10-15 % >25% >25% 5-10% 10-15 % 5-10% 5-10% 5-10% 10-15 % 20-25 % 15-20 % 5-10% 10-15 % 5-10% 5-10% 5-10%<5% 5-10% 5-10% <5% <5% <5% <5% <5% <5% 5-10% 5-10% <5% <5% <5% <5% <5% <5% 5-10% 5-10% <5% <5% <5% <5% <5% 5-10% 10-15 % 5-10% <5% <5% <5% <5% <5%Communication services Utilities Construction & infrastructure Materials Food & beverages Oil & gas Healthcare Industrials 5-10% 5-10% 5-10% <5% <5% <5% <5% <5% <5% 5-10% 5-10% <5% <5% <5% <5% <5%>3°C scenario >2°C scenario Climate Adaptation: Unlocking Value Chains with the Power of Technology 6