Good morning, Peter Vanham here in Geneva, filling in for Alan.
One of the business challenges with climate change is that it’s too often considered a long-term threat. But the World Meteorological Organization (WMO) is warning that global warming is, in fact, a very short-term reality.
The WMO’s latest global climate update, released this morning, says:
—The annual mean global temperature for each year between 2023 and 2027 is predicted to be between 1.1°C and 1.8°C higher than pre-industrial levels.
—The chance of at least one year between 2023 and 2027 exceeding the warmest year on record, 2016, is very likely (98%).
—The chance of the five-year mean for 2023-2027 being higher than the last five years (2018-2022) is also very likely (98%).
The WMO also warned of regional anomalies, such as the return of a warming El Niño, reduced rainfall in the heavily forested Amazon region and Indonesia, and accelerated warming in the Arctic regions.
These headline predictions mean it’s time for CEOs to reflect on the role of climate, Dr. Christopher Hewitt, WMO director of climate services, told me in Geneva.
“You need to understand the baseline to see how vulnerable you are,” he said. “Large events such as El Niño and La Niña drive weather and climate—factoring them in makes you more resilient.”
As a first step, he suggested companies hire meteorologists or even appoint a “chief climate officer,” or contact meteorological services such as the National Weather Service and the Climate Prediction Center.
“It is already happening,” he said of CEOs and other executives contacting him. “They want to understand the impact of how climate is varying, and what factors affect them in the years to come.
Such exchanges will allow businesses to make “no regret decisions,” such as a theme park climate-proofing its attractions or an energy company forecasting returns of hydro or solar installations.
“There are risks, but there are ways to turn them into opportunities,” he said.
More news below.
Peter Vanham
peter.vanham@fortune.com
@petervanham
TOP NEWS
A.I. hearing
OpenAI CEO Sam Altman testified Tuesday at a collegial U.S. Senate hearing on new A.I. technologies. He called for greater regulation, including a licensing regime for new A.I. models. Yet Fortune’s Jeremy Kahn notes that Altman’s support for controls may not be entirely altruistic; large, established companies can more easily comply with new rules than their smaller competitors.
Home Depot sales
Home Depot predicted on Tuesday that its annual sales will decline this year for the first time since 2009 as the pandemic-era boom in home improvement fades. The retailer reported $37.3 billion in quarterly revenue, a 4.2% decline year-on-year and lower than analyst expectations. Home Depot shares fell 2% on Tuesday. The Wall Street Journal
Hallucinations
Baidu’s CEO told analysts Tuesday that the company would make sure its ChatGPT competitor doesn’t “hallucinate” on “sensitive” topics. China’s regulators have proposed rules on generative A.I. that demand that models go through a security review and promote “socialist core values”—which may be a problem for A.I. models known for making up details. Nikkei Asia
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This edition of CEO Daily was curated by Nicholas Gordon.
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