Companies increasingly factor extreme weather into theirstrategic planning and a report from the United Nationsdue onFriday is expected to underscore the heightened risks theyface.

Extreme temperatures, droughts, and sea level rises will all getworse unless governments make sharp cuts to greenhouse gasemissions, the Intergovernmental Panel on Climate Change (IPCC)summary report is expected to conclude.

It is also expected to say human activities are “extremelylikely” – at least a 95 percent probability – to be the main causeof warming since the 1950s, according to leaked drafts of thereport seen by Reuters.

Most companies already examine how climate change and extremeweather events could impact their output, operations, goodsavailability and demand.

A survey by the Carbon Disclosure Project and Accenture inJanuary showed that 70 percent of the 2,415 companies polledbelieved their revenue would be significantly affected by achanging climate.

Some 51 percent said that drought or extreme rain had alreadyaffected their businesses, which represented a combined spendingpower of $1 trillion.

“For business, it is not about arguing with scientificconsensus; it is about understanding the scale of the risk,” saidCeline Herweijer, partner at PwC.

“It is about simple business risk and planning: where can youinvest; how can you protect your infrastructure; where can yousource supplies; what is the cost of commodities; what's your planB?,” she added.

RISKS

Utilities and manufacturers are studying weather patterns whichcould put their sites and operations at risk while retailers, suchas Tesco, are studying their supply chain to consider the impact ofclimate change on agricultural commodities.

Insurers might have to ditch traditional models for pricing riskas extreme weather events increase and premiums become unaffordablefor homeowners and businesses.

Around 80 percent of the assets of companies on London's FTSE350index are overseas, many in the countries most vulnerable toclimate change such as India, China, South Africaand Brazil.

Spirits maker Diageo has been expanding in emerging markets suchas Africa, India and Latin America, and expects water-relatedstress on crops to affect its businesses.

“As our business continues to grow, particularly in emergingmarkets, the climate change impacts increase. As we broaden ourstrategy from our own operations to our supply chain, the reportreaffirms this is the right strategy to take,” said MichaelAlexander, head of environment at the firm.

Diageo, which sells brands such as Guinness beer and Smirnoffvodka, relies on wheat, barley, corn and maize but temperature andrainfall changes will affect some growing areas, prompting the firmto turn to less water-intensive crops such as sorghum orcassava.

For telecom companies such as Britain's BT Group, more extremeweather will not only affect its suppliers in emerging markets butits networks in Europe.

“The BT network in the UK is a strategic national asset and weare looking at how we can model (based on the IPCC report) whatcould happen on the flood plains over the next 50 to 100 years,”said Niall Dunne, BT Group's head of sustainability.

“The more extreme weather impacts on our network, the morefaults there are. BT Fibre Optic Broadband and BT Sport aremulti-billion pound investments and we need to protect those in thelong term.”