When will Companies Notice the Cost of Climate Change? – Watts Up With That?

Essay by Eric Worrall

Time author Justin Worland is distressed that companies don’t understand alarmist predictions of future climate harms.

OCT 4, 2025 5:00 AM AET

When Will Companies Grasp the Cost of Climate Change?

by  Justin Worland
SENIOR CORRESPONDENT

For as long as I can remember, adaptation and resilience have been ugly ducklings of sorts in the broader climate conversation. To many climate advocates, focusing too much on measures to prepare society for the physical costs of climate change risked distracting from efforts to cut emissions. For businesses, assessing the actual costs of climate change was too difficult to measure and the damages seemed too far out.

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“When we’re talking to our investment team, we sort of assume physical climate risk is already mispriced,” said Jamie Franco, the head of cross-asset research and sustainable investment at TCW Group, an asset manager, on a Climate Week panel held by MSCI. “It’s already in your portfolio. You’re sort of flying blind. You have to combine some of the data you have, which is imperfect, and think about it from the asset that you’re investing in.”

For companies, there’s no easy fix. First, addressing the issue requires future-oriented data and modeling that can clearly show where the risk lies. Even more difficult is gathering the institutional will to use a company’s limited capital on resilience efforts that pay off in future cost savings rather than the more immediate returns of big financial growth-oriented investments. But pressure to do so will come soon enough. As the costs continue to stack up, companies will feel increasing pressure from investors and other stakeholders to take the resilience challenge seriously. Companies that prepare ahead of time will be rewarded; those that don’t risk being forced to change only once the crisis gets to a breaking point.

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Read more: https://time.com/7323198/companies-climate-cost-risk-adaptation/

If companies haven’t noticed the problem, chances are the problem, if any, is so small it is not even registering in the deep analysis large companies continuously perform to monitor the state of their business.

Anyone who has seen the churn on supermarket shelves has witnessed first hand the kind of tight control large companies maintain over costs and profits. Every penny is tracked and accounted for. Every square inch of shelving has to earn its keep. Slow moving or unprofitable product lines are ruthlessly culled – unless they are deemed important lures to bring customers into the shop, in which case they are put up the back, so customers can be tempted by all the useless high profit unhealthy foods supermarkets want you to purchase, while trekking to the back of the store to find the items customers actually need.

If climate change ever negatively impacts profits, large companies will detect it immediately, and respond with precisely calibrated adaptive measures. If they are not making such adjustments, then climate change is not hurting their businesses.