Business leaders know the importance of protecting themselves from rare occurrences. Many businesses buy insurance to pool their risks and hedge against rare, but catastrophic losses. A new report released last week shows that climate change poses a significant risk to our economy.

Former Treasury Secretary Hank Paulson compared the issue to the recent financial crisis:

"I know a lot about financial risks--in fact, I spent my whole career managing risks and dealing with financial crisis. Today I see another type of crisis looming: A climate crisis. And while not financial in nature, it threatens our economy just the same."

The "Risky Business" project, chaired by business leaders Michael Bloomberg, Hank Paulson, and Tom Steyer, combines scientific research with insurance-based modeling to quantify the economic threats of climate change, down to the regional and sector level. Businesses can then make informed decisions based on their own tolerance for risk.

On Thursday, Business Forward will host a call with members of the Risky Business project to further discuss the report's implications for the business community. Click here to reserve your spot.

We will cover the unique risk for each region in a separate post, but here are the main takeaways from the report (which you can read here):

A New, Precarious Normal 

Climate change will make extreme weather more common, disrupting business operations and supply chains. As the chart below shows, the "new normal" includes more frequent cases of catastrophic weather. Not only will severe weather occur more often, extreme weather will become more destructive.

Weather disasters like Hurricane Katrina and Superstorm Sandy are rare, but have long-lasting impacts. Nearly 30 percent of businesses that were affected by Superstorm Sandy were estimated to have failed. It is through extreme weather events that climate change poses the greatest threat.

Winners and Losers

The effects of climate change will vary dramatically across the U.S. Each region will face unique risks based on geography, infrastructure and local industry. Some of the effects include:

  • Higher sea levels and more severe storm surge, which could lead to increases in annual property losses of $2 to $3.5 billion along the East and Gulf coasts within 15 years. Between $66 billion and $106 billion worth of property will be indudated by 2050.
  • By 2050, Americans will experience an average of 27 to 50 days of 95°F+ heat every year. Labor productivity for outdoor workers will decline and heat-related mortality will increase.
  • Farmers will need to change what crops they grow, as certain crops may not hold up in a hotter climate. The energy sector will also need to adapt, as businesses use more air conditioning, and use less heating, requiring less natural gas.

These changes will create winners and losers. Climate change may benefit some businesses, like farmers in North Dakota who will gain a longer growing season. But increases in extreme heat will mean that, without adaptation, farmers in the Southeast or Midwest may see crop yields decline by 50 to 70 percent. As a whole, losses will far outweigh the gains. The same is true for businesses that see changes in heating and cooling costs; some may benefit, but on net, the changes will be costly.

We will further describe the impact that climate change will have on each of the seven regions later this week. Join our call on Thursday for an in-depth briefing from researchers that worked on the project.

Posted In: Energy
| Shumway Marshall, Digital Director

The Economic Risk of Climate Change, Findings of the Risky Business Report

Three world-renowned business leaders, Hank Paulson, Tom Steyer, and Michael Bloomberg, teamed up to create Risky Business, a first-of-its-kind project that quantifies the financial risk the United States faces if climate change continues unchecked. They released their report this morning. 
You're invited to a conference call on Thursday, June 26, with the Risky Business Project. You'll get a first-hand briefing from expert researchers who have measured the material risks of unmitigated climate change. They'll discuss what sectors and regions are most at risk and explain how power needs, crop yields, and labor will change if the climate continues to warm.

What: The Economic Risk of Climate Change, Findings of the Risky Business Report

Featuring: Kate Larsen, Research Director, Risky Business Project, Matt Lewis, Director of Communications, Risky Business Project, and Frank Nutter, CEO, Reinsurance Association of America

When: Thursday, June 26 at 4 p.m. ET/ 1 p.m. PT

Where: A unique dial-in and password will be sent to you when you register


Clean energy is becoming "business as usual" for many companies as they save money and reduce emissions, according to an analysis of America's largest corporations. 

Of the 53 Fortune 100 companies that reported their energy targets to CDP, all saved at least $1.1 billion annually by cutting emissions and using clean energy. In 2012, these companies reduced emissions by 58.3 million metric tons of CO2, equivalent to retiring 15 coal plants.

Nearly half of Fortune 500 companies currently have targets to reduce greenhouse gases, increase energy efficiency, or use more renewable energy. The report featured the sustainability efforts of many Business Forward member companies:

  • AT&T set a target to add 5 megawatts of renewable energy and ultimately added 7 megawatts.
  • Lockheed Martin surpassed its target of reducing emissions by 25 percent from 2007 levels by 2012, with a 31 percent reduction.
  • Pfizer achieved a 25 percent reduction from 2007 levels in GHG emissions, beating its goal of a 20 percent reduction.
  • Wal-Mart set a 20 percent emissions reduction goal for 2012, and achieved it a year early.
  • Verizon set a new target to produce 10 megawatts of renewable energy by the end of 2014.

And many of those same companies are seeing large annual savings from energy reduction, including the following member companies:

  • AT&T: $41.5 million
  • Google: $1.1 million
  • Lockheed: $7.1 million
  • Microsoft: $1.0 million
  • Pfizer: $10.0 million
  • Target: $6.6 million
  • Verizon: $16.9 million
  • Wal-Mart: $71.2 million

As the report notes, "What's becoming clear is that companies don't have to choose between the bottom line and addressing climate change."

Posted In: Energy
| Julie Faust, Digital Associate

Crowdfunding Helps Level the Playing Field for Women-led Businesses

Securing capital can be a challenge for any business, and according to a recent study by Massachusetts Institute for Technology researchers, women face disprortionate obstacles when it comes to securing outside investment to grow or start their businesses. The result: women tend to start their businesses with less capital than men and have to rely heavily on their personal savings.

That's about to change, according to Carla Harris, National Women's Business Council Chair and Managing Director for Morgan Stanley. She joined the Small Business Administration and Business Forward for a webinar on crowdfunding for startups and women-led businesses.

Once the rules are finalized by the Securities and Exchange Commission, Title III of the JOBS Act (signed by President Obama in 2012) will allow small businesses to raise up to $1 million in investments without having to make a public offering.

Harris said that the current investment environment is filled for opportunities for women, one of the fastest growing groups of entrepreneurs. She encouraged women to use crowdfunding to secure capital for their businesses, and said that women are outpacing all other demographic groups in raising money through crowdfunding. 

To complement Ms. Harris's guidance, Kim Peyser and Pravina Raghaven of the Small Business Administration joined the call to discuss the crowdfunding portion of the JOBS Act. Their advice focused on what businesses can do now to prepare to implement a crowdfunding strategy once the rules are finalized.

You can listen to the full webinar and download the PowerPoint presentation below.

SBA Crowdfunding Webinar with Business Forward - 4/24/14 from businessforward
Posted In: Jobs
| Julie Faust, Digital Associate

Report to Show Economic Impact of Unmitigated Climate Change

Next week, three world renowned business leaders will release a first-of-its-kind report on the financial risk the United States faces from unmitigated climate change.

Hank Paulson, Tom Steyer, and Michael Bloomberg have teamed up to create the Risky Business Project, a non-partisan effort to quantify the economic risk of climate change. They will release their findings on Tuesday, June 24.

In advance of the report's release, the authors, along with their expert panel of policy makers, investors, and business leaders published an open letter in the Wall Street Journal this week about the report. In it, they "recognize that climate change presents a serious long-term risk to our nation's economy." They also say that they are publishing the report to quantify this risk in a way that can inform business decisions and public policy.

The letter's signatories include:

  • Michael Bloomberg: Former Mayor of New York City
  • Hank Paulson: Former U.S. Secretary of the Treasury under President George W. Bush
  • Tom Steyer: Founder of Farallon Capital
  • Henry Cisneros: Founder and Chairman, CityView Capital; former U.S. Secretary of Housing and Urban Development under President Bill Clinton; former Mayor of San Antonio, TX
  • Gregory Page: Former CEO and current Chair of the Board of Cargill, Inc.
  • Robert Rubin: Co-chairman, Council on Foreign Relations; former U.S. Secretary of the Treasury under President Bill Clinton
  • Donna Shalala: President, University of Miami; former U.S. Secretary of Health and Human Services under President Bill Clinton; former Chancellor of the University of Wisconsin-Madison
  • George Schultz: Thomas W. and Susan B. Ford Distinguished Fellow at the Hoover Institution; former U.S. Secretary of State under President Ronald Regan; former U.S. Secretary of the Treasury, Secretary of Labor, and Director of the Office of Management and Budget under President Richard Nixon
  • Olympia Snow: Former U.S. Senator (R-Maine)
  • Al Sommer: Dean Emeritus, Bloomberg School of Public Health, Johns Hopkins University

You can read the letter below:

An Open Letter to the Business Community

June 17, 2014

As business and policy leaders, we recognize that climate change presents a serious long-term risk to our nation’s economy. Proper risk management dictates that we prepare for the most likely impacts from a changing climate, such as rising seas, increased damage from storm surge, drought, and increasing heat; it also requires that we minimize our exposure to less probable but potentially more devastating risks that threaten entire regions of our country.

We believe a critical first step is to quantify the risks of climate change for American businesses. To accomplish this task, we have joined together as members of the “risk committee” for The Risky Business Project (, a non-partisan, independent effort that is attempting, for the first time, to analyze the economic risks of climate change for American businesses.

Many of us have spent our careers managing risks to our businesses, our communities, and our nation. While we know America’s businesses are highly adept at identifying opportunities and threats, and adapting to the ever-changing business climate, we are concerned that major U.S. industries, financial institutions, and business leaders are disregarding the economic risks we face from climate change.

The wide range of our professional backgrounds, political views, and experience managing complex enterprises means that we have a diversity of views on this topic. And though we may disagree with each other about the appropriate response to climate change, we all see the same big picture: Climate change is an immediate problem that should command our urgent attention.

Once we have fully grasped the risks we face, we can have an informed, lively debate about how to move forward—the kind of debate that happens in boardrooms and management meetings every day.

Our objective is to quantify the associated risks so that business leaders can better understand how climate change could affect our bottom lines. For example, how much coastal property and infrastructure could be lost to sea level rise and storm surge? How might labor productivity and energy system performance be affected by extreme heat? How will farmers adapt to changes in growing conditions? How much contingent liability might the federal government face from flood insurance, crop insurance, disaster relief, and other taxpayer-funded programs?

Crucially, don’t investors, business leaders, and elected officials have a duty to seek answers to these questions?

The Risky Business Project offers an important first step toward a true accounting of the risks of climate change. We know that with access to this information, the American business community can help lead the way in putting our nation on the path toward effective climate risk management.

Michael R. Bloomberg
Henry Cisneros
Donna E. Shalala
Henry M. Paulson Jr.
Gregory Page
George P. Shultz
Dr. Al Sommer
Thomas F. Steyer
Robert E. Rubin
Olympia Snowe



Posted In: Climate Change
| Garrett Lance, Policy Associate

Insurance Companies See Climate Change as a Growing Concern for Business

As damage from severe weather events becomes more frequent, insurance companies are taking the effects of climate change into account as part of their risk assessment. 

“We do look at extreme weather events and climate-related issues as a growing concern from a credit perspective,” said Steve Dreyer, managing director of U.S. utilities & infrastructure ratings at Standard & Poor’s Rating Services, on a recent conference call for business leaders hosted by Business Forward.

Dreyer also noted that state government credit ratings are vulnerable, but have not yet been impacted by climate because the U.S. federal government has provided aid when needed.

“As we look at state governments, we do not assume that aid is always going to be there, and that there will be a willingness and ability to provide it,” he said.

Dreyer was joined on the call by Dan Utech, special assistant to the President for energy & climate change. Utech highlighted the EPA’s new standards to reduce carbon emissions at power plants as a step toward combatting the effects of climate change.

To draft a proposal that would be feasible and cost-efficient for states, the EPA met with a range of stakeholders, including local governments and businesses.

“I think that a lot of that input that EPA got over the course of that process is reflected in the proposal,” Utech said.

Business leaders are again encouraged to provide input as the EPA works to finalize the standard by next June.

“We’re looking for a lot of feedback from everybody,” Utech said.

Click here to submit a comment on the EPA’s new power plant regulations and listen to the full conversation below.

You are invited to join a conference call on Tuesday, June 17 at 11:30 a.m. ET to talk about changes businesses and investors are making as a result of climate change and severe weather. 


  • Dan Utech, Special Assistant to the President for Energy and Climate Change, The White House
  • Steve Dreyer, Managing Director, US Utilities and Infrastructure Ratings, Standard & Poor's Rating Services

What: Conference call for business leaders with Dan Utech and Steve Dryer
When: Tuesday, June 17 at 11:30 a.m. ET / 8:30 a.m. PT
Where: A unique dial-in and password will be sent to you when you register



There will be time for you to ask questions, and you can submit them in advance by emailing

Dan Utech is the Special Assistant to the President for Energy and Climate Change. Prior to joining the White House, Dan served as a Senior Advisor to Energy Secretary Steven Chu. He joined the Administration after 10 years in the Senate, where he worked on a wide range of energy and environmental policy issues. 


Steve Dreyer is managing director and lead analytical manager for U.S. Utilities & Infrastructure Ratings, overseeing credit research and ratings on regulated utilities, independent power producers, midstream energy, oil refiners, and project finance, including renewable energy and private investment in building and operating public infrastructure assets (PPPs).He is the senior analytical manager in S&P’s Washington DC office.

Steve was North American practice leader for S&P Insurance Ratings from 2000 to 2006, a period which saw catastrophic losses from the 9-11terrorist attacks and Hurricane Katrina.  He joined Standard & Poor’s in 1990 with its acquisition of UK-based ratings firm Insurance Solvency International, Ltd.  Previously he was responsible for insurance industry forecasting at Chase Econometrics.

Steve was named by Treasury & Risk Magazine as one of the “100 Most Influential People in Finance 2010” for his work in enterprise risk management.  In 2010 he was named to the Advisory Board for the Enterprise Risk Management Initiative at Poole College of Management at North Carolina State University. From 2006 to 2010 he was a director of the non-profit Insurance Marketplace Standards Association.

Posted In: Energy, Climate Change

On Friday, the Bureau of Labor Statistics reported that the economy added 217,000 jobs in May. Job gains last month put total employment above its pre-recession level.

Dr. Jennifer Hunt, the Deputy Assistant Secretary for Microeconomic Analysis at the U.S. Department of the Treasury, offered an analysis of the May jobs report in a webinar yesterday hosted by Business Forward.

Among the highlights:

  • May marked the 51st straight month of private-sector expansion, the longest stretch of job growth in U.S. history. However, job growth in May was only enough to keep pace with population growth. 
  • While the professional and business services and health care sectors continue to grow at a steady pace, the finance, government, and construction industries have yet to gain the much of jobs lost since the beginning of the recession.
  • One listener asked when the low labor force participation rate might reach pre-recession levels. Dr. Hunt explained that, despite solid job growth, labor force participation will never return to its previous high because the nation’s largest generation—baby boomers—are now retiring, at which point they are counted as non-participants.

Dr. Hunt showed that nominal wages have been increasing since 2007. But nearly a third of that wage growth was due to improving labor force characteristics, like education levels. After adjusting for those factors and inflation, real wages have decreased by about $1 over the same period. Workers of similar levels of education and experience are now relatively cheaper to hire compared to 2007.

For more information, Dr. Hunt’s slides are posted below:


April Jobs Report - U.S. Department of the Treasury from businessforward
Posted In: Jobs
| Erik Roos, Policy Analyst

May Jobs Report: Employment Now Above Pre-Recession Levels

Today, the Bureau of Labor Statistics announced that the economy added 217,000 jobs in May. Unemployment remained unchanged from April at 6.3 percent.

On Monday, Business Forward will host a free interactive webinar on the implications of this jobs report with Dr. Jennifer Hunt, the Deputy Assistant Secretary for Microeconomic Analysis at the U.S. Department of the Treasury.

Sign up for our free webinar on the jobs report >

Here are some highlights from the employment report:

  • This is the fourth straight month of payroll employment above 200,000 and the 51st straight month of private-sector job growth
  • April job gains were revised down from 288,000 to 282,000
  • The professional and business services saw the largest growth in May, adding 55,000 jobs.
  • The health care and social assistance sector added nearly 55,000 jobs, up from 29,000 in April and about double its monthly average for the past year.

Job gains in May put total employment above its pre-recession level. Private sector employment reached its previous peak in the March jobs report, but a smaller government workforce meant that it took two more months for total employment to recover. The U.S. has finally recovered the 8.7 million jobs lost during the recession, but employment gains have not kept up with population growth. Unemployment remains a concern.

Another solid jobs report is a sign that the weaker employment gains in December and January may have been related to the extreme weather this winter. Economic output actually fell by 1 percent in the first quarter of 2014, according to revised estimates last month by the Department of Commerce. This is the first time the U.S. economy contracted since early 2011.

Manufacturers’ supply chains are vulnerable to the weather. A Business Forward Foundation report published this week showed that just an hour of downtime at an auto plant costs $1.25 million. One plant in Indiana, which had previously experienced very little snow-related downtime, lost five days of production to heavy precipitation this winter. While these weather losses are significant, many businesses have resumed hiring and many economists believe output should be stronger in the second quarter.

Posted In: Jobs
| Jim Doyle, President

Report: Severe Weather and Manufacturing in America

Earlier this week, the EPA proposed new standards that will reduce greenhouse gas emissions at existing power plants by 30 percent by 2030. Critics argue the standards will force manufacturers to shift production overseas. Supporters argue the standards are a necessary response to climate change.

Who's right? The answer depends largely on (1) how much manufacturers actually spend on electricity; (2) how much rates will rise; and, (3) how much manufacturers are already losing because of severe weather.

In answering these questions, Business Forward Foundation focused on America’s biggest, most important manufacturing industry: autos.

Check out our latest report comparing the effects of severe weather and the EPA's proposed energy standards on manufacturing. 

The results of the report are striking in two ways. 

  • First, the potential cost of higher electricity rates (adding $7 to the cost of producing a $30,000 car) is quite small, while the cost of weather-related shutdowns is enormous ($1,250,000 per hour). Like most manufacturers, automakers spend less than 1% of their budgets on electricity, which means that if it costs them $100 to manufacture a part today, the EPA’s standards could eventually add 6 cents.
  • Second, American manufacturers rely on supply chains that are increasingly large, specialized, global and fast. The very characteristics that make them efficient also make them interdependent, and this interdependence is what makes them susceptible to severe weather. Climate change is disrupting our ports, highways, bridges, and rails – and, because producers come from all over the world, severe weather in Asia affects us, too.

Automakers and suppliers are already taking steps to reduce this exposure, just as they are making energy efficiency investments across their U.S. plants. Their lesson could be a very useful example of how America can lead on climate change and high value manufacturing

Download Business Forward Foundation’s report: Severe Weather and Manufacturing in America.



Severe Weather vs. Energy Rates: which has a bigger impact on the economy?


Posted In: Climate Change, Energy