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At Davos, Climate Change Is a Pain in the Bottom Line

By Sara Murphy – Jan 25, 2014 at 3:00AM

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What do Coca-Cola, Apple, Nike, and Toyota have in common? They’ve all suffered measurable losses from climate change. The World Economic Forum is paying attention.

A striking thing is happening right now at the World Economic Forum in Davos, Switzerland: Climate change and the risk it poses to business is under discussion in mainstream circles like never before. Representatives from major corporations are not only communicating the harm climate change is doing to their operations right now, but they're also asking politicians to put meaningful climate change regulations into place. That's right: Business is asking government for more regulation.

How bad could it be?
Many folks think of climate change as something that poses some ill-defined, distant risk, but companies are suffering serious consequences right this minute. Coca-Cola (KO -0.22%) had a wake-up call back in 2004 when the company lost a valuable operating license in India because of severe water shortages there. Coca-Cola now tackles climate change as a full-blown business risk, as increasing global droughts interrupt not only water supply, but also the sugar beet and sugar cane crops that are Coke's feedstocks.

Toyota (TM 0.22%) and Apple (AAPL 0.70%) have faced several recent supply chain disruptions after extreme weather events in Asia, most significantly the 2011 Thai floods that forced a temporary suspension of Prius and Camry production there, and caused a setback in Apple's supply of Mac components.

Nike (NKE 1.23%) has been outspoken at Davos. Here's what Hannah Jones, vice president of sustainable business and innovation at Nike, wrote on Friday.

While ... Nike-led technologies have greatly advanced the integration of sustainability and performance, materials innovation is not a problem we can solve alone. ... It is clear that no single company, organization or government has the ability to tackle this innovation challenge on their own. Instead, it will require new models of collaboration. We need to catalyse capital, capabilities, science and technology and resources far beyond the boundaries of our own supply chain. To tackle massive systemic challenges like those in the materials and manufacturing industries, Nike is harnessing the collective power of unconventional collaborations. Our ability to positively influence the systems in which we operate is critical to our future success.

Watch the following videoto hear more about these companies' challenges, and how the mainstream world is increasingly pushing for action.

Sara Murphy has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple, Coca-Cola, and Nike. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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