By Alexander Bandza, Associate, Jenner & Block
The Carbon Disclosure Project (CDP) has released a report that updates its survey on how S&P 500 companies assess physical risks from climate change. Reported risks affect companies in all economic sectors and include damage to facilities, reduced product demand, lost productivity and necessitated write-offs, often with price tags reaching millions of dollars.
The CDP report is an interesting read because it spans many sectors and provides real examples that illustrate the variety of impacts that climate change has on major corporations, along with their associated cost. Notable examples include:
• Consolidated Edison, Inc. disclosed that its costs related to Superstorm Sandy exceeded $431 million;
• Dr. Pepper Snapple Group, Inc. estimated that weather, climate-change, and water-availability uncertainties placed $2.5 billion of its sales at risk;
• HP noted a 7% revenue decline following the 2011 floods in Thailand;
• Sempra Energy disclosed that, due to wildfires in San Diego, its financial exposure from claims and settlements has exceeded its $1.1 billion of liability insurance coverage;
• Starwood Hotels & Resorts Worldwide, Inc. noted that an increased demand for air conditioning at its properties in non-OECD countries, where generators are often needed because local energy grids cannot reliably handle the demand, could cause a $20 million increase in annual cooling costs alone; and
• Union Pacific reported an 11% decline in corn shipments affecting its freight revenue as a result of droughts in 2012.
The report can be found here here.
Read more at Corporate Environmental Lawyer Blog by Jenner & Block LLP.
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