WEBVTT 00:00:00.500 --> 00:00:02.633 Hello, everyone. My name is Rich Lesser. 00:00:02.633 --> 00:00:03.800 I'm here with Gim Huay Neo. 00:00:03.800 --> 00:00:07.866 She's the managing director at the World Economic Forum who's driving the climate 00:00:07.866 --> 00:00:08.733 and nature agenda. 00:00:09.333 --> 00:00:13.400 We really want to talk to you about this year's report for the Alliance of CEO 00:00:13.400 --> 00:00:16.200 Climate Leaders, which is about the cost of inaction. 00:00:16.500 --> 00:00:18.500 And the near-term impacts of 00:00:18.500 --> 00:00:23.400 climate risk are really quite substantial, that we're talking about physical risks 00:00:23.400 --> 00:00:28.266 that could impact 5% to 25% of corporate profitability in a relatively short time 00:00:28.266 --> 00:00:31.500 frame, of course, varying around the world and varying 00:00:31.500 --> 00:00:33.300 across sectors of the economy. 00:00:33.633 --> 00:00:36.466 On top of that, the risk of falling behind in the 00:00:36.466 --> 00:00:40.666 transition also presents risks to businesses in their own performance and 00:00:40.666 --> 00:00:43.033 their own ability to drive value creation. 00:00:43.300 --> 00:00:44.733 So that's what we're here to talk about. 00:00:44.733 --> 00:00:48.066 And Gim Huay, I just wanted to start by asking you your 00:00:48.066 --> 00:00:49.500 reactions to the report. 00:00:49.966 --> 00:00:53.800 Yeah, indeed, Rich, I think the cost-of-inaction report is a 00:00:53.800 --> 00:00:59.033 very important report because it actually highlights the escalating risks that the 00:00:59.033 --> 00:01:01.033 businesses are currently facing. 00:01:02.000 --> 00:01:07.500 When we look at the global risk survey, extreme weather risks is the top two 00:01:07.500 --> 00:01:12.766 risks that businesses feel are extremely important in the next two years. 00:01:13.100 --> 00:01:19.166 And we feel that extreme weather—whether in the forms of wildfires, droughts, 00:01:19.166 --> 00:01:22.900 floods, heat stress—are increasing in intensity 00:01:22.900 --> 00:01:24.000 and frequency. 00:01:24.433 --> 00:01:29.500 And it's very important for businesses to have a good sense of risks that they are 00:01:29.500 --> 00:01:33.833 facing and, more importantly, on the opportunity of actually investing 00:01:33.833 --> 00:01:37.600 into adaptation, resilience, as well as mitigation solutions. 00:01:37.900 --> 00:01:39.300 And they come hand in hand. 00:01:39.633 --> 00:01:44.366 One can actually adapt to the changing climatic conditions while at the same 00:01:44.366 --> 00:01:49.700 time cutting emissions and looking at measures to restore and better protect nature 00:01:50.633 --> 00:01:55.066 It was interesting for me as we were going through the report because we've 00:01:55.066 --> 00:01:59.800 tended to focus on climate risk in the distant future that feels quite far away, 00:01:59.800 --> 00:02:02.533 even if it may not be as far away as we think. 00:02:02.733 --> 00:02:07.000 What this report showed, I thought, is that the risks are coming closer and 00:02:07.000 --> 00:02:10.833 closer in. And of course, we're experiencing around the world right 00:02:10.833 --> 00:02:13.366 now, whether it's fires or floods or storms, 00:02:13.366 --> 00:02:15.833 we're seeing it in many parts of the world. 00:02:16.500 --> 00:02:20.333 Part of this agenda needs to be business and governments collaborating. 00:02:20.333 --> 00:02:22.166 I know you think about that so much. 00:02:22.500 --> 00:02:25.900 What are your reflections as it relates to this cost of inaction of how 00:02:25.900 --> 00:02:28.233 governments and businesses should work together? 00:02:28.700 --> 00:02:32.366 Yeah, the risk may not be very well understood. 00:02:32.500 --> 00:02:35.566 One, because what we're experiencing is unprecedented 00:02:36.300 --> 00:02:40.733 Last year was the hottest year on record, 1.54°C, 00:02:40.733 --> 00:02:45.700 and the indicators from the climate scientists are not looking good. 00:02:46.166 --> 00:02:50.066 But for businesses to be able to act quickly and at scale, 00:02:50.066 --> 00:02:55.433 they need the right policy environment—policy predictability, 00:02:55.433 --> 00:02:59.100 consistency—so that they can invest, because some of these investments are 00:02:59.100 --> 00:03:02.200 fairly long term, so that they can plan ahead, 00:03:02.200 --> 00:03:03.333 invest long term, 00:03:03.333 --> 00:03:08.000 and this requires policy support to enable that business case to be 00:03:08.000 --> 00:03:08.900 strengthened. 00:03:09.100 --> 00:03:14.166 And if we have a good business case, it's a lot easier for business to move forward 00:03:14.166 --> 00:03:19.566 So that business policy, dialogue, partnership is absolutely critical. 00:03:19.966 --> 00:03:23.300 We are dealing with change that's happening very quickly. 00:03:23.566 --> 00:03:29.566 So the more often they can engage with each other to work together and align on 00:03:29.566 --> 00:03:33.633 objectives, I think the faster and better that we can 00:03:33.633 --> 00:03:35.433 move at speed and scale. 00:03:35.700 --> 00:03:37.200 I completely agree with you. 00:03:37.366 --> 00:03:41.666 It's another example—and we've been working together now for years and seen 00:03:41.666 --> 00:03:45.800 this on many of the things we've done—that if we want to go at the speed 00:03:45.800 --> 00:03:50.666 and with the strength that we need, we need business and governments to work together 00:03:50.933 --> 00:03:55.733 And I think the other thing I found interesting in the report was the guide 00:03:55.733 --> 00:04:00.300 for CEOs at the end that talks about embedding this more into strategic 00:04:00.300 --> 00:04:05.533 assessments, more into scenario planning, more into risk—climate risk—as a part of 00:04:05.533 --> 00:04:07.700 overall risk management practices. 00:04:07.700 --> 00:04:11.833 So my hope is coming out of this, we'll have practical impacts both for how 00:04:11.833 --> 00:04:17.200 business and government work together but also what corporates can do to accelerate 00:04:17.200 --> 00:04:20.866 their own progress, to protect themselves, and also protect the communities that 00:04:20.866 --> 00:04:23.766 they operate in and help accelerate this transition. 00:04:23.933 --> 00:04:24.566 Exactly. 00:04:24.566 --> 00:04:27.633 I think the more we can dialogue and work together, 00:04:27.633 --> 00:04:33.566 the better we can support a very orderly, secure transition for people, 00:04:33.566 --> 00:04:35.800 for property, and for business. 00:04:35.933 --> 00:04:39.166 Yes. Thank you. Thank you. And thank you all for joining us.