{"id":9182,"date":"2019-06-05T06:09:00","date_gmt":"2019-06-05T04:09:00","guid":{"rendered":"https:\/\/www.sonnenseite.com\/economy\/worlds-biggest-companies-face-1-trillion-in-climate-change-risks.html"},"modified":"2019-06-05T06:09:00","modified_gmt":"2019-06-05T04:09:00","slug":"worlds-biggest-companies-face-1-trillion-in-climate-change-risks","status":"publish","type":"post","link":"https:\/\/www.sonnenseite.com\/en\/economy\/worlds-biggest-companies-face-1-trillion-in-climate-change-risks\/","title":{"rendered":"World\u2019s biggest companies face $1 trillion in climate change risks"},"content":{"rendered":"

A group of the world’s biggest companies1<\/sup><\/a> representing nearly US$17 trillion in market capitalization have valued the climate risks to their businesses at almost US$1 trillion – with many likely to hit within the next 5 years. This is revealed in a groundbreaking new report<\/a> published today by CDP<\/a>, which runs the global disclosure system for environmental information.<\/p>\n

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Over 80% see major climate impacts, including extreme weather patterns, rising global temperatures and increased pricing of greenhouse gas emissions. Around US$500 billion of costs are rated as likely to virtually certain, with higher operating costs linked to legal and policy changes making up a significant risk. <\/p>\n

Companies report potential US$250 billion in losses due to stranded assets – these include fossil fuel assets that may no longer offer economic returns as a result of market shifts associated with the transition to a low-carbon economy, or companies that are significantly exposed to the physical impacts of climate change. <\/p>\n

But the group also reported cumulative gains from realising business opportunities related to climate change at US$2.1 trillion, with the majority on track as almost certain. These opportunities include increased revenue through demand for low emissions products and services (such as electric vehicles), shifting consumer preferences and increased capital availability as financial institutions increasingly favor low-emissions producers. <\/p>\n

On average, the potential value of climate-related opportunities is almost 7 times the cost of achieving them (US$311bn in costs, $2.1 trillion in opportunities). Given this, investors and stakeholders could expect to see a significant shift in climate-friendly products and services from the world’s largest companies. <\/p>\n

Companies in the financial sector see <\/strong>the most <\/strong>potential revenue (USD$1.2 trillion<\/strong>) from potential new sustainable products & services, <\/strong>followed by manufacturing ($338 billion), services ($149 billion), fossil fuels ($141 billion) and the food, beverage & agriculture industries ($106 billion).The vast majority of risks are also concentrated in the financial services industry – the sector reported almost 80% of all financial risk value2<\/sup><\/a>.  <\/strong> <\/p>\n

Nicolette Bartlett, Director of Climate Change, CDP commented<\/strong>, “The goalposts for climate action have never been clearer for companies. Our analysis shows that there are a multitude of risks posed by climate change, including impaired assets, market changes and physical damages from climate impact, as well as tangible impacts to business bottom lines. <\/em> <\/p>\n

Following the recommendations of the UN’s IPCC report, our collective response to climate change is more urgent than ever, and it is clear that corporate action cannot be delayed. So it is hugely encouraging that companies are reporting that the potential value of climate opportunities far outweigh the costs of investing in the transition.<\/em> <\/p>\n

However, while our research shows that financial organizations see the most opportunities and value at risk from climate change, a more concerning story may sit behind this statistic. It is likely that this growing awareness is partly caused by the increased scrutiny of regulators and stakeholders. And the potential gaps in awareness and disclosure elsewhere in the economy present real risks. Regulators and investors should take note, and all companies from all industries need to step up.” <\/em><\/p>\n

\tOther key findings from the report include: <\/strong> <\/p>\n