Climate risk is financial risk - Stay the course - I by IMD

The climate crisis is not a distant threat. It is here, shaping our markets and disrupting our economies in real time. Across the United States, manufacturers are facing droughts one month, floods the next, and wildfires in between. In California, for example, farmlands are operating at only half capacity because of water shortages, a reality that affects farmers, food processors, truck drivers, and consumers alike. These are not abstract “environmental issues.” They represent billions of dollars in material financial losses, happening right now across the country.

I have spent the last three decades urging companies and investors to treat sustainability not as a side initiative, but as a core strategy. The business case today has never been clearer: climate risk is a financial risk. If you are a board member or C-suite leader, your fiduciary duty demands that you understand these risks and respond to them, regardless of the shifting political winds.