If there's one thing this summer has made clear, it's that extreme weather events are becoming more common. The United States is plagued by flooding, heatwaves, and wildfires.
However, a recent PricewaterhouseCoopers survey of executives found that only half of CEOs consider climate change a risk to their business, and only 19% consider it a serious risk. is. This number is actually down from 23% last year.
The survey also found that less than a quarter of companies are prepared for climate-related disruptions that are likely to occur in the next 12 to 18 months. But the climate crisis can impact business in all sorts of ways.
“It ranges from supply chain to factory location to, 'Will there be enough water nearby for manufacturing for the next few years?'” said Sanjay Patnaik of the Brookings Institution.
Patnaik said numerous studies, such as those by PwC, show that most companies are still not doing much to mitigate these risks, except in industries that are more obviously and immediately vulnerable.
“For example, food,” he said. “Because those in the chocolate and coffee business are already starting to see the impact and start preparing their supply chains for it.” But those companies are in the minority.
Neil Dahl of PricewaterhouseCoopers said most executives he talks to are: teeth Think about climate change.
“It has to be front and center when investors, boards, employees and customers are asking questions about a particular topic,” he said.
But “being on the front lines” doesn't necessarily mean executives are doing anything about it. “There's a difference between having a concern and actually doing something about it that involves investing and spending,” Dahl said.
Ultimately, it comes down to money, said Bhaskar Chakravorty of Tufts University's Fletcher School.
“Most CEOs are under pressure to deliver results to analysts and the market,” he said. “Their tenure on average is less than five years, and the returns on the investments they make are over a much longer period of time.”
So there's not much incentive. Additionally, Chakravorty pointed out that CEOs are humans too, and most people aren't very good at planning for the future, even if we experience back-to-back climate disasters this summer.
“Are we turning down the air conditioner? Are we eating less meat? Most of us aren't,” Chakravorty said. “So just as we as consumers are not making meaningful cuts, neither are businesses.
And Chakravorty said most people are unlikely to do so unless the government creates one.
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