A new analysis is helping investors understand and manage climate change risk in their investments. The research, by Sustainability Accounting Standards Board (SASB), analyzed 79 industries and found that 72 industries are adversely impacted by climate change, which is the equivalent $27.5 trillion, or 93 percent of U.S. equities by market capitalization. Authors stress that the broad impact of climate change means investors can’t simply avoid certain markets, and that there is additional need for corporate disclosure related to climate risk.
Meanwhile, a different report by CDP tracking corporate climate action revealed that an impressive 85% of companies have set emissions reductions targets, but that very few have a firm plan on how to achieve those goals. The report is optimistic that the Paris Agreement and other actions will inspire more long-term planning, and notes that 62 companies surveyed have succeeded in cutting emissions by 10% or more while simultaneously increasing revenue.
Resources:
- A news story on climate risk study is available here: http://www.newson6.com/story/33425874/sasb-publishes-technical-bulletin-on-climate-risk
- The SASB technical bulletin is available here: http://using.sasb.org/sasb-climate-risk-framework/
- Information on the corporate climate action report is available here: https://www.cdp.net/en/research/global-reports/tracking-climate-progress-2016
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