Bank of America Corp worries that flooded homeowners could default on their mortgages. Walt Disney Co is concerned that its theme parks might get too hot for vacationers, while AT&T Inc fears that hurricanes and wildfires could knock out its cell towers.
Coca-Cola Co wonders whether there will still be enough water to make Coke.
As US President Donald Trump’s administration rolls back rules meant to curb global warming, new disclosures show that the US’ largest companies are already bracing for its effects.
The documents reveal how widely climate change is expected to cascade through the economy — disrupting supply chains, disabling operations and driving away customers, but also offering new ways to make money.
The disclosures were collected by CDP, a UK-based non-profit organization that asks companies to report their environmental impact, including the risks and opportunities that they believe climate change presents for their businesses.
More than 7,000 companies worldwide filed reports for last year, including more than 1,800 from the US.
On Tuesday, CDP, formerly known as the Carbon Disclosure Project, released letter grades for those companies that measure “how aware they are about the issue, how they’re managing it, how they’re progressing toward targets,” CDP spokeswoman Caroline Barraclough said.
Thirty US-based companies received an “A” grade, the most of any country; they include Apple Inc, Johnson & Johnson and Home Depot Inc. Next on the list were Japan, with 25 top-scoring companies, and France, with 22.
The information that companies provide to CDP about their climate risk is typically far more specific than what they include in their filings with the US Securities and Exchange Commission — and while the commission requires companies to disclose material risks, it does not ask them to address the specific threats associated with climate change.
Most of the largest US companies by market capitalization submitted information to CDP, and the vast majority said that the threat is real and serious: Of the 25 companies whose submissions reporters reviewed, 21 said that they had identified “inherent climate-related risks with the potential to have a substantial financial or strategic impact” on their business.
Many of those risks related to the effects of climate change on companies’ ability to operate. One of the most commonly cited risks was water shortages.
“Many of Intel’s operations are located in semi-arid regions and water-stressed areas, such as Israel, China and the southwestern United States,” Intel Corp said.
If climate change causes longer droughts in those areas, it could “potentially lead to increased operational costs since the semiconductor manufacturing process relies on access to water,” Intel added.
Water shortages could also threaten Coca-Cola’s business, because climate change “could limit water availability for the Coca-Cola system’s bottling operations,” the company said.
More frequent hurricanes and wildfires could force AT&T to spend more money on repairing damage to its network, as well as “proactively relocating equipment or additional network hardening,” the telecom said.
It added that disasters cost it US$627 million in 2017.
Rising temperatures are already affecting “the comfort, and health and well-being of customers” in Disney’s theme parks, the entertainment group wrote.
“If measures are not taken to ensure low cost alternatives for cooling and managing extreme temperatures, this will not only negatively impact our customers’ experience, it will also impact our ability to attract and retain visitor numbers,” Disney said.
Other companies said that climate change could affect their customers.
Bank of America reported that 4 percent of its US real estate-secured loans are in flood zones, almost all of them residential.
“Increased flood incidence and severity could lead to our clients defaulting on their mortgage payments if, for example, flood insurance premiums become unaffordable,” the company wrote. “Clients may also find themselves in a negative equity situation due to housing values being impacted when insurance costs rise.”
Visa Inc said that global warming could increase global pandemics and armed conflict — problems that would in turn cause fewer people to travel.
“Any such decline in cross-border activity could impact the number of cross-border transactions we process and our foreign currency exchange activities, and in turn reduce our revenues,” Visa said.
Intel, Visa and Google did not respond to requests for comment. Bank of America and AT&T declined to comment beyond what is in those companies’ reports.
Coca-Cola spokesman Max Davis said in a statement that the company’s goal is to reduce the carbon footprint of its beverages by one-quarter between 2010 and 2020.
He did not respond to a question about the severity of the threat that more intense droughts pose to Coca-Cola’s business.
Climate change is not all downside for the largest US companies: Many of those that filed reports with CDP said that they believe climate change could bolster demand for their products.
For one thing, more people could get sick.
“As the climate changes, there will be expanded markets for products for tropical and weather related diseases including waterborne illness,” pharmaceutical giant Merck & Co said.
The company did not respond to a request for comment.
More disasters would make iPhones even more vital to people’s lives, Apple said.
“As people begin to experience severe weather events with greater frequency, we expect an increasing need for confidence and preparedness in the arena of personal safety and the well-being of loved ones,” the company said.
Its mobile devices “can serve as a flashlight or a siren; they can provide first aid instructions; they can act as a radio; and they can be charged for many days via car batteries or even hand cranks,” Apple said.
Apple did not respond to a request for comment.
Living with climate change could also cost money, which some banks see as an opening.
“Preparation for and response to climate-change induced natural disasters result in greater construction, conservation and other business activities,” Wells Fargo and Co wrote, adding that it “has the opportunity to provide financing to support these efforts.”
More disasters will mean increased sales for Home Depot, the company wrote, adding that as temperatures get higher, people would need more air conditioners.
Home Depot forecast that its ceiling fans and other appliances would see “higher demand should temperatures increase over time.”
Home Depot spokeswoman Christina Cornell declined to comment beyond what was in the company’s report.
Alphabet Inc’s Google said that it expects costs and benefits from climate change.
“Fluctuating socioeconomic conditions due to climate change” could reduce demand for online advertising, the company reported, but added that more people might use Google Earth.
“If customers value Google Earth Engine as a tool to examine the physical changes to the Earth’s natural resources and climate, this could result in increased customer loyalty or brand value,” Google wrote. “This opportunity driver could have a positive impact on our brands.”
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