The Cost of Inaction 2024

18. After four of the five costliest wildfires in the past decade struck California, State Farm (one of the largest local insurance firms) stopped selling homeowners insurance state-wide, not just in wildfire zones. The vast majority of flood damage from Hurricane Helene will likely be uninsured. Examples such as these are going to become more prevalent. 19. International Labour Organization (ILO). (2018). The employment impact of climate change adaptation: Input Document for the G20 Climate Sustainability Working Group. https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@ed_emp/ documents/publication/wcms_645572.pdf. 20. McSweeney, R. (2016). Droughts and heatwaves cause 10% drop in annual crop harvests. Carbon Brief. https://www.carbonbrief.org/droughts-and-heatwaves-cause-10-drop-in-annual-crop-harvests/. While production currently still usually recovers, this would become harder as events grow more frequent and severe. These disruptions also lead to increased price volatility for crops globally, reduce the stable supply of quality inputs and negatively impact livelihoods, causing further instability in vulnerable regions. 21. Benayad, A. et al. (2024). Why Investing in Climate Action Makes Good Economic Sense, BCG. https://www.bcg.com/ publications/2024/investing-in-climate-action. 22. Benayad, A. et al. (2024). Why Investing in Climate Action Makes Good Economic Sense, BCG. https://www.bcg.com/ publications/2024/investing-in-climate-action. 23. Riordan, P . et al. (2022). China drought highlights economic damage wrought by global warming. Financial Times. https://www.ft.com/content/9420686b-e571-4eeb-99ac-1fef10ce93ca. 24. Paint Square. (2021). Flooding Causes $1.5B in Damages to German Railway. https://www.paintsquare.com/news/ flooding-causes-15b-in-damages-to-german-railway. 25. Associated Press in San Francisco. (2019). PG&E: California utility firm files for bankruptcy after deadly 2018 wildfires. The Guardian. https://www.theguardian.com/us-news/2019/jan/29/pge-bankruptcy-california-wildfires-utilities. 26. Mehlhorn, J. (2021). A decade on, learning from Thailand’s devastating 2011 floods. Swiss Re. https://www.swissre.com/ risk-knowledge/mitigating-climate-risk/decade-on-thailand-devastating-2011-floods.html . 27. Korea Herald. (2021). Toyota cuts annual profit forecast after Thai floods disrupt output. https://www.koreaherald.com/ view.php?ud=20111211000139. 28. World Economic Forum. (2025). Business on the Edge: Building Industry Resilience to Climate Hazards. 29. Samios, Z. (2020). ‘Tens of millions’: Telstra, Optus start counting bushfire cost. Sydney Morning Herald. https://www.smh. com.au/business/companies/tens-of-millions-telstra-optus-start-counting-bushfire-cost-20200108-p53psv.html. 30. Nestlé. (2019). Nestlé - Climate Change 2019 [answers to CDP climate questionnaire 2019]. https://www.nestle.com/ sites/default/files/2020-01/nestle-answers-cdp-climate-2019.pdf. 31. United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). (2023). Asia and the Pacific unprepared to face climate-induced catastrophes, warns new UN study. https://www.unescap.org/news/asia-and-pacific- unprepared-face-climate-induced-catastrophes-warns-new-un-study. 32. CDP . (2023). CDP Climate Change 2023 Questionnaire. https://guidance.cdp.net/en/guidance?cid=46&ctype=theme&idty pe=ThemeID&incchild=1&microsite=0&otype=Questionnaire&tags=TAG-13071%2CTAG-605%2CTAG-599. 33. World Economic Forum. (2024). From Disruption to Opportunity: Strategies for Rewiring Global Value Chains. https://www3.weforum.org/docs/WEF_From_Disruption_to_Opportunity_2024.pdf. 34. Chau, V. et al. (2023). From Risk to Reward: The Business Imperative to Finance Climate Adaptation and Resilience. BCG, Global Resilience Partnership and USAID. https://www.globalresiliencepartnership.org/wp-content/uploads/2023/12/ from-risk-to-reward-report.pdf. 35. United Nations. (2024). Climate Action. https://www.un.org/en/climatechange/net-zero-coalition. 36. Task Force on Climate-Related Financial Disclosures (TCFD), TCFD Hub. (2017). B. Climate-Related Risks, Opportunities, and Financial Impacts [extract from the Final Recommendations Report]. https://www.tcfdhub.org/Downloads/pdfs/ E06%20-%20Climate%20related%20risks%20and%20opportunities.pdf 37. Note that while physical risk exposure can be predicted relatively well, any individual risk event is nonetheless very unpredictable. In this chapter, we consider three transition scenarios: –Slow: Little change to current policy and technology landscape; continuation of business as usual, with significant temperature increase. –Medium-paced: Uncoordinated change to policy and technology landscape across regions leading to slower (and more costly) transition. –Rapid: Faster and more successful changes to policy and technology landscape, with limited temperature increase beyond 1.5°C. 38. Sources: –Taylor, L. (2014). Australia kills off carbon tax. The Guardian. https://www.theguardian.com/environment/2014/jul/17/ australia-kills-off-carbon-tax. –Carbon Market Institute. (2023). Safeguard Mechanism Reform. https://carbonmarketinstitute.org/safeguard- mechanism-reform/. 39. United Nations Environment Programme Finance Initiative (UNEPFI) and MinterEllison. (2021). Liability risk and adaptation finance. https://www.unepfi.org/wordpress/wp-content/uploads/2021/04/UNEPFI-Climate-Change-Litigation-Report-Lowres.pdf. 40. Black, S. et al. (2023). IMF Fossil Fuel Subsidies Data: 2023 Update. International Monetary Fund. https://www.imf.org/en/ Publications/WP/Issues/2023/08/22/IMF-Fossil-Fuel-Subsidies-Data-2023-Update-537281. The Cost of Inaction: A CEO Guide to Navigating Climate Risk 56