Hello, everyone. My name is Rich Lesser.
I'm here with Gim Huay Neo.
She's the managing director at the World Economic Forum who's driving the climate
and nature agenda.
We really want to talk to you about this year's report for the Alliance of CEO
Climate Leaders, which is about the cost of inaction.
And the near-term impacts of
climate risk are really quite substantial, that we're talking about physical risks
that could impact 5% to 25% of corporate profitability in a relatively short time
frame, of course, varying around the world and varying
across sectors of the economy.
On top of that, the risk of falling behind in the
transition also presents risks to businesses in their own performance and
their own ability to drive value creation.
So that's what we're here to talk about.
And Gim Huay, I just wanted to start by asking you your
reactions to the report.
Yeah, indeed, Rich, I think the cost-of-inaction report is a
very important report because it actually highlights the escalating risks that the
businesses are currently facing.
When we look at the global risk survey, extreme weather risks is the top two
risks that businesses feel are extremely important in the next two years.
And we feel that extreme weather—whether in the forms of wildfires, droughts,
floods, heat stress—are increasing in intensity
and frequency.
And it's very important for businesses to have a good sense of risks that they are
facing and, more importantly, on the opportunity of actually investing
into adaptation, resilience, as well as mitigation solutions.
And they come hand in hand.
One can actually adapt to the changing climatic conditions while at the same
time cutting emissions and looking at measures to restore and better protect nature
It was interesting for me as we were going through the report because we've
tended to focus on climate risk in the distant future that feels quite far away,
even if it may not be as far away as we think.
What this report showed, I thought, is that the risks are coming closer and
closer in. And of course, we're experiencing around the world right
now, whether it's fires or floods or storms,
we're seeing it in many parts of the world.
Part of this agenda needs to be business and governments collaborating.
I know you think about that so much.
What are your reflections as it relates to this cost of inaction of how
governments and businesses should work together?
Yeah, the risk may not be very well understood.
One, because what we're experiencing is unprecedented
Last year was the hottest year on record, 1.54°C,
and the indicators from the climate scientists are not looking good.
But for businesses to be able to act quickly and at scale,
they need the right policy environment—policy predictability,
consistency—so that they can invest, because some of these investments are
fairly long term, so that they can plan ahead,
invest long term,
and this requires policy support to enable that business case to be
strengthened.
And if we have a good business case, it's a lot easier for business to move forward
So that business policy, dialogue, partnership is absolutely critical.
We are dealing with change that's happening very quickly.
So the more often they can engage with each other to work together and align on
objectives, I think the faster and better that we can
move at speed and scale.
I completely agree with you.
It's another example—and we've been working together now for years and seen
this on many of the things we've done—that if we want to go at the speed
and with the strength that we need, we need business and governments to work together
And I think the other thing I found interesting in the report was the guide
for CEOs at the end that talks about embedding this more into strategic
assessments, more into scenario planning, more into risk—climate risk—as a part of
overall risk management practices.
So my hope is coming out of this, we'll have practical impacts both for how
business and government work together but also what corporates can do to accelerate
their own progress, to protect themselves, and also protect the communities that
they operate in and help accelerate this transition.
Exactly.
I think the more we can dialogue and work together,
the better we can support a very orderly, secure transition for people,
for property, and for business.
Yes. Thank you. Thank you. And thank you all for joining us.