Weather Risk

Revenue Gross revenue Less: returns, penalties, service credits Cost of goods sold Raw materials and inputs Direct labour Manufacturing overhead Logistics and freight Gross profit Operating expenses Maintenance and repair Insurance Asset impairment/write-downs Compliance and regulatory Inventory spoilage and wastage Operating profit/earnings before interest and taxes (EBIT) Non-operating items Interest expense Foreign exchange gains/losses Restructuring charges Litigation and legal costs Business interruption losses Profit before tax Net profit

Real estate company 2% revenue gain by 2050 Cooling demand is projected to increase in historically temperate markets. Analysis suggests that this escalation, along with rising energy prices, gives one real estate company an opportunity to help clients maintain or retrofit cooling equipment or implement energy-efficiency measures. The company could also generate new revenues with resilience services, such as flood-proofing. Airport operator €90 million in lost revenues Unusually heavy, prolonged snowfall in early 2026 overwhelmed an airport’s de-icing capacity, resulting in the cancellation of more than 3,000 flights and the stranding of thousands of passengers.

Source: PwC analysis

Electronics manufacturer 1% impairment of PP&E by 2050 For some companies, the growing threat of tropical cyclones in Asia-Pacific could reduce the value of property, plant, and equipment (PP&E) assets in the region. One electronics manufacturer calculated the possible loss of value so that it might be written down on its balance sheet.

Chemicals manufacturer 3–5% increase in input costs by 2050 Rising temperatures, this company found, are likely to mean greater spending on energy for cooling and industrial processes in Asia-Pacific. More frequent, prolonged droughts could also exacerbate water scarcity in certain regions, leading to substantially higher spending on water supplies.

Chemicals manufacturer 18× increase in maintenance costs by 2050 A chemicals company estimated that damage from storms, floods, and other weather events could increase maintenance and repair costs by a factor of up to 18 at its production sites over the next 25 years.

Electronics manufacturer 3% content losses by 2050 For one electronics manufacturer, estimated losses of inventory due to storms could amount to more than US$18 million. Analysis also showed that hardening the facilities with reinforced structures, storm-resistant roofs and windows, flood protection, and other improvements could significantly reduce content losses.

Industrial manufacturer 20% more damage-related losses by 2050 Flood, hail, tropical cyclones, and other weather hazards pose threats to the operations of one global industrial manufacturer. When the company projected the effect of such hazards on its operating income, it found that the sum of money lost to damage could increase by more than 20% by 2050.

Chemicals manufacturer 60% increase in interruption losses by 2050 A chemicals company identified an increasing threat of business interruptions caused by storms, floods, heatwaves, drought, and sea-level rise. The financial risks are particularly high at certain locations. One site alone could suffer interruption losses amounting to nearly half its annual contribution margin (revenues minus variable costs).

Chemicals manufacturer 30% average net losses by 2050 Heat stress, water stress, sea level rise, storms, droughts, floods, and subsidence were found to threaten a chemicals company’s sites across North America, Europe, and Asia-Pacific—creating the prospect of reduced revenues and site value.

Weather risk can hit multiple items on a company’s profit and loss statement

Net profit

Profit before tax

Interest expense Foreign exchange gains/losses Restructuring charges Litigation and legal costs Business interruption losses

Non-operating items

Operating profit/earnings before interest and taxes (EBIT)

Maintenance and repair Insurance Asset impairment/write-downs Compliance and regulatory Inventory spoilage and wastage

Operating expenses

Gross profit

Raw materials and inputs Direct labour Manufacturing overhead Logistics and freight

Cost of goods sold

Gross revenue Less: returns, penalties, service credits

Revenue