- Philip Morris, the tobacco company behind Marlboro cigarettes, has identified a way to profit from climate change.
- In a disclosure to CDP, a nonprofit that asks companies about their environmental impact, Philip Morris said it could save $US10 million from heavy rains and $US1 million per year from warmer temperatures.
- A number of companies, including Apple and Wells Fargo, have predicted a financial upside to rising global temperatures and climate-related disasters.
Rising global temperatures and extreme weather patterns spell bad news for the global economy.
A recent report published by the Trump administration estimates that climate change could provoke hundreds of billions of dollars worth of annual economic losses by the end of the century.
But some major companies see climate change as a money-making opportunity.
According to thousands of disclosures released by CDP, a nonprofit that collects information from companies about their environmental impact, brands like Wells Fargo, Honda, and AT&T have identified ways to profit from extreme temperatures and climate-related disasters.
In the case of Philip Morris International, the tobacco manufacturing giant behind the popular Marlboro cigarettes, heavier rains could save the company an estimated $US10 million, according to a CDP disclosure.
That’s because rain lengthens the life cycle of tobacco, keeping the soil moist for longer periods of time. This would not only help the company ramp up production, but might also improve the quality of its cigarettes, since a steady rainfall provides the ideal conditions for tobacco to grow.
There’s also the benefit of higher global temperatures, which the company estimates could produce another $US1 million per year in savings.
Before producing a cigarette, manufacturers must first dry out, or “cure,” the tobacco leaves in heated barns, which use firewood to power the drying-out process. Philip Morris believes that warmer weather will produce natural heat that could reduce the need to burn firewood.
That doesn’t mean the company is ready to ignore climate change. If the Intergovernmental Panel on Climate Change’s latest predictions are correct, and global temperatures rise 1.5 degrees by 2040, the world could experience catastrophic heatwaves, droughts, mass extinctions, and other events that could destroy tobacco production.
Like many of the companies that stand to gain financially from climate change, Philip Morris also sees the risk of future climate-related disasters.
In a statement to Business Insider, the company said they were focused “minimising the negative externalities” of their products.
“We have an important impact on the communities and environment around us, which we’re committed to address,” the company said. “We cannot achieve this alone.”
The company told CDP it’s working to reduce its carbon footprint by minimising energy use and cutting back on greenhouse gas emissions.
Efforts like these have earned Philip Morris an “A” grade in tackling climate change from CDP, alongside companies like Bank of America and AT&T. Starbucks and McDonald’s earned a “C,” while Disney and American Airlines earned a “D.”
In many cases, companies that received a strong letter grade saw addressing climate change as a way to improve their public image.
“We expect that by tackling sustainability and climate change issues appropriately, our company reputation could be enhanced,” Philip Morris wrote in its disclosure, adding: “Leading performance in these areas could attract new investors and also increase our attractiveness as an employer.”