...

As the impacts of climate change continue to intensify worldwide, extreme weather events are generating significant economic consequences for companies, cities, and financial systems. Over the past decade, climate-related extreme weather events are estimated to have caused nearly USD 2 trillion in losses to the global economy.

In this context, CDP’s new report, Disconnected Defenses: Extreme Weather Risk Across Corporates, Cities and Financial Systems, examines the impacts of extreme weather events on economic systems, drawing on environmental disclosure data from companies, insurers, and local governments.

According to the report, 62% of the cities, states, and regions disclosing through CDP report that they have already been significantly affected by extreme weather events, while only 35% of companies identify these events as a financially material risk. Nevertheless, companies anticipate a total of USD 714 billion in future financial losses resulting from extreme weather events.

The report also reveals that 46% of local governments are only able to implement climate adaptation measures to a limited extent due to budget constraints, and that there is a global adaptation finance gap of at least USD 34 billion.

CDP’s analysis highlights that extreme weather events constitute not only an environmental challenge but also a systemic risk affecting economic and financial systems. The report underscores the importance of coordination among the public sector, private sector, and financial institutions to strengthen resilience.

Please click here to access the report.