Walk through your portfolio and review your supply chains, and the new limits are everywhere.
Water risk, extreme weather, rising insurance costs, and resource constraints are no longer the stuff of future scenario planning; they’re challenges on your desk right now. According to the world’s biggest reinsurer, Munich Re, global climate disasters hit a record cost of $320bn in 2024, with weather catastrophes accounting for 93% of these impacts as the United States faced severe losses from hurricanes Helene and Milton. According to S&P Global, without adaptation, annual physical risk costs for companies could range anywhere from 3% up to 28% of the value of their real assets by the 2050s.
That’s an existential question, not a manageable margin squeeze.
The annual WEF Global Risks Report showed that leaders in 2024 ranked extreme weather events, biodiversity loss, and natural resources shortages as the most severe risks to business and society in the next decade, higher than state-armed conflicts or societal polarization. The business world’s typical extractive model of perpetual growth and expansion is running up against hard realities, from geopolitical boundaries to the natural boundaries of the planet itself.
It’s not just tariffs or energy prices. It’s also droughts slashing crop yields in California and Brazil, low-water rivers that delay transportation of goods in the Rhine or Mississippi, shortages of rare earth minerals holding up next-generation manufacturing, or growing public pressure for companies to move beyond “extract and exit” business models.
The science is clear – we are living well beyond our means. Six out of nine planetary boundaries have already been exceeded – meaning humanity is operating beyond Earth’s safe limits, risking destabilization of the systems that sustain life. Biodiversity losses alone are estimated to cost up to a staggering $25tn annually, according to the IPBES, an intergovernmental science-policy body focusing on biodiversity and ecosystems.