The Cost of Inaction 2024

Companies likely underestimate the financial impact of physical risks FIGURE 13 Company self-perceived financial impact of physical risks % annual EBITDA at risk Food & beveragesConstruction & infrastructureIndustrials Utilities1Oil & gas Communication servicesHealthcare Materials n = 22 n = 16 n = 123 n = 24 n = 13 n = 14 n = 17 n = 472-13% 1-7% 0-5% 0-4% 0-3% 0-2% 0-1%6% 2%2% 2% 2% 1%1%0%0-4% Company self-perceived impact as reported to CDP (median)Company self-perceived impact as reported to CDP (quartiles 1 to 3)Sectoral estimate based on comprehensive physical risk assessment 1. Utilities include power grids. 2. CDP questionnaire sample size: n = 276 . Note: Based on companies’ reported potential maximum financial impact from identified physical climate risks at medium- and long-term time horizons. Source: BCG analysis, based on data from the CDP Climate Change 2023 Questionnaire. More than 70% of companies see significant impact from physical risks FIGURE 12 Companies identifying physical climate risks with potential to have a substantive impact on their business % of CDP respondents Communication servicesTotal Food & beveragesIndustrials Construction & infrastructureMaterials Healthcare Oil & gas Utilities1 n = 35 n = 1,011 n = 84 n = 412 n = 50 n = 207 n = 74 n = 61 n = 8872%86%85% 82% 72%70% 66%64% 59% 1. Utilities include power grids. Source: BCG analysis, based on data from the CDP Climate Change 2023 Questionnaire. The Cost of Inaction: A CEO Guide to Navigating Climate Risk 19