Climate risks to cut corporate earnings by 7% by 2035

ANKARA

Businesses face the prospect of losing up to 7% of their annual earnings by 2035 due to escalating climate hazards, according to reports released by the World Economic Forum (WEF).

The reports, published on Wednesday, warn that delays in addressing climate risks could lead to disruptions similar to those caused by the COVID-19 pandemic every two years, with industries such as telecommunications, utilities, and energy particularly vulnerable.

Extreme heat and other climate-related disasters are projected to result in annual fixed asset losses of $560–610 billion for listed companies.

Firms in energy-intensive sectors are also facing increasing challenges from tightening global regulations, with carbon pricing alone potentially cutting earnings by half by 2030.

The report highlights that every dollar spent on climate adaptation could prevent up to $19 in losses.

Green markets are expected to expand from $5 trillion this year to $14 trillion by 2030, with significant growth in alternative energy, sustainable transport, and eco-friendly products. Early movers in these sectors are positioned to gain competitive advantages, fostering innovation and profitability.

Gim Huay Neo, managing director of the World Economic Forum, stated that businesses can thrive while protecting ecosystems and supporting communities by systematically addressing climate-related risks.

The reports emphasize that urgent action is needed, with leading scientists warning of the imminent risk of tipping points in Earth systems, such as ice sheets and ocean currents.