NEW YORK—As reported in VMAIL, the World Economic Forum (WEF) has released two new reports, Business on the Edge: Building Industry Resilience to Climate Hazards, and The Cost of Inaction: A CEO Guide to Navigating Climate Risk, in which it warns that businesses could face steep financial losses if they do not mitigate climate risk. Data in the reports finds that companies that delay finding solutions to climate change risks could lose up to 7 percent of their annual earnings by 2035.

The main factors that influence this trend are extreme heat and other climate hazards, according to the reports, which say that these are expected to cost businesses $560 billion to $610 billion in annual fixed asset loses. This will be an impact on the same scale as the economic disruptions of the COVID-19 pandemic every two years, according to the WEF. 

The news is not all bad, however. Data from the Alliance of CEO Climate Leaders shows that businesses that invest in adaptation, resilience and decarbonization have already experienced returns. According to this data, every dollar invested in climate adaptation and resilience can generate up to $19 in avoided losses. The WEF, in turn, reports that green markets are set to grow from $5 trillion in 2024 to $14 trillion by 2030. Sustainable consumer product is included in the three largest segments expected to grow.

“Pathfinders leading the charge on net-zero transitions and nature positive solutions are showing how businesses can create value while improving the environment and supporting the communities,” said Gim Huay Neo, managing director of the World Economic Forum. “By holistically and systematically addressing climate-related risks and opportunities, businesses can build stronger and more sustainable operations, safeguarding and restoring ecosystems, and fostering long-term economic and social resilience in an increasingly complex and uncertain world.”