Companies rarely say why they’re avoiding a particular location, but their climate-related concerns occasionally become visible, says this academic.
People navigate through floodwaters at a market during heavy rain, in Bangkok, Thailand, September 28, 2026. REUTERS/Athit Perawongmetha TPX IMAGES OF THE DAY
People navigate through floodwaters at a market during heavy rain, in Bangkok, Thailand, September 28, 2026. REUTERS/Athit Perawongmetha TPX IMAGES OF THE DAY
PHOENIX, Arizona: When multinational companies decide where to build a factory, open a mine or establish a regional office, they have to consider whether the investment will still be profitable years into the future.
Making that decision increasingly means thinking about risks, like whether surrounding roads will flood, worker safety will be compromised by extreme heat in the summer, and clean water will be available.
As climate change increases the frequency and intensity of extreme weather events around the world, these effects can be especially severe in poorer countries that lack the resources to prepare for disasters or recover quickly after they hit.
I study how political and environmental risks affect international business. In my new book, Multinational Corporations and Climate Change: Risks, Responsibilities, and Resilience, I explore how disaster risk is affecting the ways global companies see these climate-vulnerable markets, and how those views are leading some foreign investors to avoid these developing nations altogether.
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Low- and middle-income countries aren’t the only ones that suffer when multinational corporations pass them by. The companies themselves also stand to lose out on business opportunities in emerging markets if they pull away.