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New report reveals how companies see $10 of potential benefit for every $1 invested in responding to physical climate risks
A failure to mitigate worsening environmental risks could cost large and mid-sized businesses projected accumulative losses of $1.24tr by 2030, which could then rise to $1.77tr by 2040.
That is according to new figures from CDP contained in its latest Disclosure Dividend report, which also reveal how companies reporting through the popular climate disclosure platform have saved between $80bn and $94bn through emissions reduction initiatives since 2024.
The 2026 Disclosure Dividend report draws on data from more than 11,260 large and mid-sized companies that made environmental disclosures through the CDP platform in 2025, which together account for around two-thirds of global market capitalisation.
It found that on average, companies see $10 of returns on every $1 invested in responding to physical climate risks - up from the $8 recorded in 2025's inaugural report.
While all countries and regions see a return in addressing escalating climate risks, Asian firms claim they are experiencing higher returns on investment, with Japan seeing a median return of $9 and China seeing $11 for every $1 invested in climate resilience. In Europe, median returns are estimated at an average of $7 for firms Germany, $8 for France, and $10 in the UK.
CDP found the share of companies identifying substantive environmental risks has increased from 46 per cent in 2018 to 80 per cent in 2025, with a clear majority now also linking worsening risks to financial performance.
The new report found 71 per cent of companies disclosed which financial metrics are exposed to the material impacts of these risks - with revenue emerging as the most exposed area, after being cited by 47 per cent of companies.
Across the board, firms have developed a more sophisticated understanding of their environmental dependencies, risks, impacts, and opportunities, which has led to significant efficiencies and cost savings, the study concluded.
Separately, CDP conducted an analysis on the profitability arising from emissions reduction initiatives, finding that waste reduction and material reuse are the most financially attractive approach to cutting emissions, generating $3.9 on every $1 invested and delivering median pay back periods of only 1.3 years.
Energy efficiency improvements for production processes was rated second, generating $3.6 for every $1 invested, with a median pay back of 2.1 years.
Overall, the report calculated every $1 invested in emissions reduction generates an average of $2.4 in return, and in some cases returns can reach as high $7 for every $1 invested over a project's lifetime.
"Understanding resilience has never been more important for companies that want to build competitive advantage," said Sherry Madera, CEO at CDP. "The difference between exposure and opportunity lies in data, and in how companies use it to inform Earth-positive economic decisions.
"Our analysis shows that the returns from action are compelling, but so too are the costs of delay. Environmental data disclosure is fast becoming a core economic discipline for companies of every size, sector and region to build resilience and performance."
CDP's study lands after it last week revealed it is to split into a commercial entity backed by new funding from global investment firm Permira and the CDP Foundation, a non-profit, charitable organisation focused on translating science into action-ready disclosure methods.
It also coincides with the release today of a new report by sustainable investment focused non-profit Ceres, which argues the business case for corporate participation in landscape initiatives that can address escalating risks from nature loss has strengthened in recent years.
Titled Working Across Landscapes: An Investor Guide to Managing Nature Risk at Scale, the report highlights that almost 350 firms - including global giants such as Nestlé and Mondelēz - engaged in over 570 initiatives, with a median investment of $300,000 per company, according to 2024 CDP data.
Timber and palm oil are the commodities most commonly covered by landscape initiatives, but companies also disclose support for initiatives tied to soy, cattle, cocoa, rubber, and coffee production.
With more companies joining multi-stakeholder efforts, Ceres' report provides investors with a framework for engaging agricultural and forestry companies in scaling up nature protection and restoration, while addressing systemic supply chain risks.
"As the threats from deforestation and conversion mount, our report lays out a strong business case for landscape initiatives as a strategic approach for companies to mitigate risks and advance their business goals," said Karen Mo, director of nature research and partnerships, food and forests at Ceres, and a lead author of the report. "While individual corporate action is extremely important, and a few leading companies illustrate that cleaning up supply chains is possible, additional efforts are needed to effectively address systemic issues that extend far beyond the boundaries of any farm, mill, or facility."
Businesses all around the world are facing increased risks and rising costs, as intensifying climate impacts and geopolitical tensions work their way through supply chains. The coming El Nino could see these costs exacerbated still further. But the good news from CDP and others is that there is more real world evidence than ever that investments in proven decarbonisation and climate resilience projects can both minimise these risks and deliver increasingly attractive returns.
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