Extreme physical events, from floods to landslides, also pose a serious social and financial threat. Businesses that do not quickly take steps to manage the climate transition, which is among the causes of hydrogeological disruption, will be 25 percent more likely to default in 2050 than they are today, and 44 percent more likely than those who invest as of now. Moreover, for companies at high physical risk (more than 8 percent, concentrated mainly in Emilia Romagna, Tuscany, Liguria, Valle d'Aosta and throughout the Apennines), annual costs for rebuilding plants and structures of 1.6 percent of assets and insurance premiums of up to 3 percent of turnover are projected to grow by 2050. This is according to a study of Italian SMEs conducted by the Cerved information provider. The investment that Italian SMEs would have to make to finance the transition process as of now is about 203 billion euros by 2050, of which as much as 137, or 67 percent, in the next 8 years. The largest slice is in the North (73.7 billion euros in the Northwest and 54.8 billion euros in the Northeast), where most manufacturing activities are concentrated, but it is in the South that action must also be taken now with adequate support, so as not to affect budgets and aggravate the most fragile financial situations.
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