Climate risks: how to calculate the impact on EBITDA
Climate risks appear on the balance sheet as operating costs. But most companies still treat extreme weather events as accounting surprises, not as manageable variables.
Extreme weather events cost Brazil R$ 184 billion between 2022 and 2024 (CNseg/EY). Of that total, 91% had no insurance coverage. The figure sits in the P&L, but rarely as a management line item.
The question few CFOs ask: how much of my EBITDA is exposed to climate risk, and I have not even mapped it?
The three channels of impact on operating profit
1. Operations shutdown. Heavy rain, wind outside operational windows, extreme heat. Every hour of downtime is revenue that never returns. In ports, 84% of ships were delayed at Santos in 2024, averaging 12 days of waiting (Datamar/CNT). Average waiting time rose from 9 hours in 2019 to 20 hours in 2023 (Centronave).
But it is not just ports. In mining, a shutdown due to slope instability can halt a mine for days. In the power sector, an unanticipated heat wave forces spot market purchases at emergency prices. On railways, a flooded stretch blocks cargo flow.
To calculate: tally the hours lost to weather events over the last 3 years and multiply by the hourly cost of the idle operation. That is the floor of avoidable damage.
2. Asset damage. Repair costs are direct and show up on the P&L. The opportunity cost of downtime is indirect, larger, and does not appear as a separate line. Drought compromising a mine slope, flooding submerging a substation, gusts damaging a wind turbine.
To calculate: add direct repairs over the last 5 years, plus the cost of hours lost to repairs, plus insurance premiums adjusted after claims.
3. Demurrage, fines and penalties. In Brazilian port demurrage alone, US$ 2.3 billion in 2024, up 15% from 2023 (Bain & Company / Valor Econômico). Beyond ports: regulatory fines for availability targets in the power sector, disputed force majeure clauses, penalties for delivery delays.
To calculate: total demurrage and climate-related fines over the last 3 years. The 15% annual trend suggests the next one will be worse.
A 4-step methodology
Step 1 — Map exposure by asset. List the hazards that affect each asset. This is not generic: it is the exact coordinates of the terminal, the mine, the substation. Define the threshold: wind above 25 knots interrupts berthing at dock 3, 80 mm in 24 hours saturates the slope.
Step 2 — Calculate historical frequency. Using 10 to 20 years of climate reanalysis calibrated to each asset's coordinates, calculate the annual frequency of each hazard, the worst case in 5 and 10 years, and the trend. Brazil recorded 3 times more extreme events in the last decade (Atlas Digital MDR).
Step 3 — Translate into financial impact. Direct cost: hours lost times hourly cost plus repairs. Indirect cost: demurrage, fines, insurance premiums. Opportunity cost: revenue not generated during lost windows. Total exposure: annual probability times impact, per hazard per asset.
Step 4 — Calculate the ROI of anticipation. With exposure mapped, compare the annual cost of inaction with the cost of a monitoring solution. The result is usually compelling.
Real cases: numbers that speak
Santos Brasil. Latin America's largest container terminal reduced vessel waiting time from 7 to 3 days using real-time climate monitoring. The result was R$ 105 million per year in additional revenue, while maintaining 100% operational weather safety (G1 February/2026).
Puerto Mejillones, Chile. Operating in the Atacama desert, the terminal recorded 426 climate alerts in the first quarter of 2026. Each early alert generated operational savings. The accumulated ROI was 20 to 1, with US$ 305 thousand per year in measurable benefit.
Puerto Barquito, Chile. Capstone Mining's operation avoided 7-figure USD costs per year with 48 to 72 hours of advance notice on wind and tide windows. The system enabled precise berth planning, eliminating unscheduled stoppages.
Three operations, two countries, one pattern. The cost of anticipating an event is a fraction of the cost of reacting to it.
The regulatory clock is ticking
CVM Resolution 218, aligned with IFRS S2, requires over 700 publicly traded Brazilian companies to report climate risk exposure. The base year is 2026, with the first mandatory report due in May 2027. Companies that have not implemented a calculation methodology by then will be scrambling with last-minute data.
The good news: the same calculation that satisfies the regulator is the one that improves operating margins. Historical reanalysis data at 1 to 3 km resolution, covering 18 hydrometeorological hazards, already exists for over 100 critical assets across Latin America and Europe. What is missing is connecting the data to each asset's financial risk.
The first step is the map
Before calculating ROI, before implementing a system, before preparing a board presentation, start with the map. Which assets are exposed? To which hazards? How frequently? What is the cost of each hour of downtime?
You cannot control the weather, but you can manage the risks. And managing starts with a spreadsheet, not with software.
This is the first in a series of articles on climate risk as a financial management variable. Coming next: how to price climate risk into long-term contracts, how parametric insurance fits into the calculation, and the 90-day implementation roadmap.