Climate change-driven devaluations could drop corporate earnings up to 7.3% by 2035, a report found.

Extreme weather events like wildfires, hurricanes, floods and heatwaves are reshaping economies, disrupting supply chains, raising operational costs and threatening long-term business stability. Big Four Firm KPMG’s 2025 Futures Report, published Monday, found these weather disasters cost U.S. companies $217 billion in 2024, an 85% increase from the year prior. 

Currently only 48% of companies quantitatively assess climate risks, despite its strategic and financial advantages and amid intensifying investor scrutiny. But business strategies will inevitably have to evolve in order to keep up with the ramifications of climate change. 

Benjamin Fanjoy/Bloomberg

“In the near term, we are certainly seeing organizations increase their focus on wrapping their heads around immediate physical risks — to their assets, to their supply chains, to business resiliency,” Marcus Leach, KPMG’s managing director of deal advisory and strategy, said in the report. “A lot of this is still being handled manually, using more static models from historical data. It’s like looking at the one-in-100-year storm event as a benchmark, but that’s no longer enough.”

“In the longer term, you will see mandates around more dynamic modeling, driven by AI and better computing power, to predict things like convective storms, flooding, and wildfires,” he continued. “The risk focus will shift from static assumptions to real-time, constantly updated models. Companies that do not integrate this planning into their risk strategies will be caught off guard as climate events continue to escalate in frequency and severity.” 

(Read more: “ESG: Accountants’ opportunity to lose”)

One of the biggest challenges businesses face in meeting their sustainability goals is lack of funding directed toward areas like upgrading infrastructure, diversifying supply chains and securing stable energy sources. 

“The reality is that many organizations have identified the risks, but they haven’t necessarily done the work to adapt,” KPMG’s U.S. sustainability leader Maura Hodge said in the report. “They know there’s a 27% chance of their operations being interrupted by a flood, but they haven’t built redundancy into their supply chains or made infrastructure changes to mitigate those risks.”

Another major challenge is the ever-changing and inconsistent adoption of regulation across jurisdictions. 

“What we’re trying to help companies understand is that reporting is not just about compliance — it’s about strategy and value creation,” Hodge said. “If you’re spending all your time and resources getting compliant, but not using that data to inform business decisions, then you’re missing the point.”

“Historically, only companies that wanted to be ‘leaders’ in sustainability did climate reporting, and they could pick and choose what they reported,” Hodge added. “Now, with SEC regulations and Europe’s CSRD coming into play, transparency and comparability are being forced onto the market.”

The KPMG report also discussed topics like artificial superintelligence, quantum computing, space economy, computing infrastructure and advanced manufacturing.

Emailing an unprotected return; Sec. 899; IRMMA tactics; and other highlights from our favorite tax bloggers.

Making choices

• Taxable Talk (http://www.taxabletalk.com/): Just send that return for all to see: Missouri has joined New Jersey in the blogger’s hall of shame for encouraging identity theft.
• HBK (https://hbkcpa.com/insights/): How manufacturing clients can survive the tariffs extravaganza.
• Institute on Taxation and Economic Policy (https://itep.org/category/blog/): As the D.C. region heads toward a likely recession, local policymakers will need to look to new revenue sources to help lessen the pain. Why lawmakers ought to adopt a simple reform that would raise revenue and make the District’s business tax system fairer.
• Withum (https://www.withum.com/resources/): What to remind them about the mega backdoor Roth.
• Virginia – U.S. Tax Talk: (https://us-tax.org/about-this-us-tax-blog/): OBBBA won’t be so beautiful for foreign persons if IRC Section 899 becomes reality.
• Tax Vox (https://www.taxpolicycenter.org/taxvox): OBBBA does little to increase access to paid family leave but just tweaks a little-known and largely ineffective tax credit, doubling down on access through optional private insurance policies; this leaves workers with their employers’ choices. How, luckily, lawmakers have other choices.
• Current Federal Tax Developments (https://www.currentfederaltaxdevelopments.com/): The Tax Court’s recent Kramarenko v. Commissioner opinion “provides a crucial analysis for tax professionals concerning the interpretation and application of tax treaty provisions,” particularly those related to exemptions for students, trainees and researchers. 
• The Sales Tax People (https://sales.tax/expert-articles/): Why isn’t sales tax just included in the purchase price of items?
• Taxnotes (https://www.taxnotes.com/procedurally-taxing): Guest blogger Sherrill L. Trovato wonders how difficult the Tax Court exam for non-attorneys should be.
• Yeo & Yeo (https://www.yeoandyeo.com/resources): A look at GASB Statement No. 101, “Compensated Absences,” now effective for fiscal years ending June 30, 2025, and subject to audit. 

Games of risk

And counting

• The National Association of Tax Professionals (https://blog.natptax.com/): This week’s “You Make the Call” looks at Edna and Stacy, who each contributed $100 cash to a new LLC taxed as a partnership, Counting Cowgirls. Each has a 50% interest in the LLC, which immediately obtained an $800 loan to purchase a laser printer, qualifying for $320 of bonus depreciation. Can Edna and Stacy deduct this loss against their outside basis, or is the loss suspended?
• U of I Tax School (https://taxschool.illinois.edu/blog/): How to help older clients prep for the dreaded IRMMA on Medicare premiums.
• Berkowitz Pollack Brant (https://www.bpbcpa.com/articles-press-releases/): What to remind biz clients about preparing for hurricane season.
• Eide Bailly (https://www.eidebailly.com/taxblog): West Virginia Senator Robert Byrd, “a lion of the Senate from a different era of politics,” died in office 15 years ago, but his legacy lives on in the “Byrd Rule,” which, on one level, “is why the tax legislation is happening in the first place.”

Enjoy complimentary access to top ideas and insights — selected by our editors.

Lee Iacocca, the legendary former Chrysler chairman, once said, “The speed of the leader is the speed of the team.” That’s great when you have a strong, decisive CEO. But many times in professional services firms — and in our own lives — we spend a lot of time talking about doing something, but don’t actually do it. Why? Because we’re still deciding.

Take exercising. When you commit to going to the gym on a specific day and time, there are no more decisions to be made. You’ve made a commitment to doing your workout. You don’t need any more information. There is no more analysis to do. You just go do it.  

Applying this logic to an accounting firm, however, it’s not always so simple. As accounting firm leaders, we’re often not progressing as fast as we’d like to because we’re surrounded by change. Change can be scary and overwhelming. Clients are demanding more of us. Competition for clients is getting tougher. Competition for talent is getting tougher. (For more on leaning into a constantly changing world, see my article Becoming an anti-fragile CPA.)

As highly analytical people, we tend to sit around and discuss potential solutions, but we don’t actually make a decision, let alone take the next step. And that means we’re still stuck in neutral. 

By the  way, making a decision to do nothing is still a decision. 

Three-speed framework for better decision-making

To help break through inertia and “analysis paralysis” I like to use a three-D framework called Delegate, Decide and Delay. 

Let’s take them one at a time.

1. Delegate a decision when it comes to something relatively minor that doesn’t need your personal stamp of approval — for instance, buying a new scanner for the office or planning a social media campaign.  If you’re a firm leader, not everything needs to fall on you. Delegating lower-level, first-speed decisions effectively frees up your time and mental energy for higher-value decisions. It also builds leadership depth when other people in the firm are now empowered to make decisions. I’ve found a good rule of thumb is to delegate decisions that are not irrevocable, which allow you to change directions and which don’t directly impact client experience or client outcomes. If you want to quantify it, delegate decisions in which the downside risk is less than 10% of the value of that decision. 

For more about delegating decisions, see my column Do you know where your firm’s waterline is?

2. Decide is the second option in the decision-making framework. Decide when something is in your lane, when it’s important to the firm, and when you don’t need more information in order to make an informed decision. It could be “deciding” to let a problem client go or changing your pricing structure. 

A good rule of thumb is to make a second-speed decision when you have at least 70% of the information you think you need. This will build momentum. There’s no sense waiting until you get 100% of the information, because things are constantly changing, and you’ll never be 100% certain.

3. Delay (with a deadline) comes into play when you’re mulling over decisions that will have profound implications for your firm, team and clients. Again, delaying is not procrastinating, it’s about setting a deadline to make a well-considered decision about a big-ticket item such as a potential transaction with private equity, or rebranding the firm, or opening a new office. These are important third-speed decisions that can’t be delegated or decided on the spot.

Again, delaying is not procrastinating. By delaying (with a firm deadline), you’re setting up a realistic timeframe to gather the information you need to make a confident Go/No-Go by a predetermined date. Without setting a firm deadline to take action, you risk spinning your wheels indefinitely. If you can’t get all the information you need by the deadline you’ve set, then you need to punt for a longer period of time and set a new, but realistic deadline for making your Go/No-Go decision.

Putting 3Ds into practice

Go into a conference room with a whiteboard and ask your team: “What are all the things we’ve been kicking around forever?” It could be a client portal, or new pricing, or right sizing your business, or using AI for research. Apply the three Ds (Delegate, Decide, Delay) to each issue and you’ll be surprised by how quickly it helps you accelerate your decision making.

Don’t overthink it, just get started.

What is your firm doing to improve its decision making? I’d love to hear more.

(Disclaimer: The author receives no compensation or promotional consideration for products and services mentioned in this article.)