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A tale of two risks: Carbon pricing and extreme weather
Enhancing resilience: Entities should implement robust business continuity plans to mitigate physical climate risks
Risk profile
Consumer durables manufacturing
Publication date: 31 Mar 2025
By Eye For Business
Climate-related risks
Latest public risk disclosures from consumer durables manufacturers highlight significant exposure to acute physical risks, particularly cyclones, hurricanes, typhoons, and floods. These extreme weather events threaten operations and supply chains in Asia, potentially causing power outages, equipment damage, and quality losses in production, especially for semiconductor sites.
Impacts across the value chain
The impact primarily affects upstream and direct operations, increasing indirect operating costs and direct costs in the short to long term. Past floods have caused substantial financial losses, with air conditioning in semiconductor manufacturing sites consuming 40% of total electricity, potentially reducing operating profits.
Mitigation and adaptation
Risk responses focus on mitigation strategies, such as emergency operation centres, business continuity plans and preventative measures at high-risk sites. Specific actions involve investments to reduce safety-related risks and establishing contracts for emergency helicopter transport.
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