Businesses risk losing up to 7% of annual earnings by 2035 due to the escalating costs of climate inaction, comparable to disruptions seen during the COVID-19 pandemic every two years. Two reports from the World Economic Forum highlight that proactive climate investments yield strong returns. This includes the “Cost of Inaction” report by the Alliance of CEO Climate Leaders, led by Jesper Brodin, CEO of Ingka Group, which notes climate-related damages have exceeded $3.6 trillion since 2000.
The reports reveal that the global green economy, worth $5 trillion in 2024, is projected to reach $14 trillion by 2030. Industries could reduce emissions by 10-60% at no or limited additional costs, with some achieving net zero at carbon prices aligned with net-zero goals. These findings underscore the economic feasibility of decarbonization efforts.
The Alliance of CEO Climate Leaders represents companies with combined revenues of $4 trillion and a 12-million-strong workforce. From 2019 to 2022, the group achieved a 10% emissions reduction while increasing revenues by 18%, demonstrating sustainable growth is achievable with strategic climate action. Ingka Group alone has cut emissions by 24.3% since 2016 while expanding revenue by 30.9%.
Businesses face both physical and transition risks due to climate change, including acute events like floods, sea-level rise, and regulatory changes. Ingka Group’s commitment to climate action includes €4 billion invested in renewable energy since 2009, with plans to reach €7.5 billion by 2030, ensuring the company generates more energy than it consumes. These actions align with the Paris Agreement and validated Science Based Targets, supporting the shift to a carbon-free economy.
