Addressing climate risks can deliver significant economic benefits, with every US $ 1 invested potentially generating up to US $ 8 in returns, according to CDP’s 2024 report. The disclosure non-profit analysed data from more than 24,800 companies, drawing on self-reported estimates of the potential medium- to long-term financial impacts of physical climate risks. The findings show that all industries stand to gain from investments aimed at mitigating such risks.

Returns vary by sector, but retail and apparel emerged as leaders, with climate risk mitigation investments delivering up to 21 times their value across the sector. CDP refers to this benefit as the “disclosure dividend” — the positive return that comes from identifying, reporting, and acting on environmental risks, impacts, and opportunities.

The report also highlights substantial opportunities from the low-carbon transition, with the financial sector expected to gain the most. Manufacturing and fossil fuel companies also anticipate some of the largest benefits from transition-related initiatives.

More than 90% of large companies have, or plan to implement within two years, systems to assess a broad range of environmental risks and impacts. CDP’s analysis underscores that the estimated financial losses from climate risks — totalling US $ 6.5 trillion based on corporate disclosures — far exceed the US $ 1.5 trillion needed for mitigation, making proactive investment a financially sound strategy.