The impacts of climate change on companies’ supply chains, natural resources, operations and key infrastructure are expected to worsen as a result of increasing temperatures, changing weather patterns, and more frequent and intense droughts, floods and storms. Virtually every sector faces climate risks and opportunities, and investors can’t afford for those risks to remain opaque.
The year 2011 set records for economic losses and insured losses caused by natural catastrophes, with extreme weather events accounting for 90 percent of the disasters and 8 of the 10 most costly.
Climate change is already causing costly physical impacts for communities and the companies and investors that depend on them. For example, among the specific, physical impacts that businesses in the USA felt from last year’s extreme weather events:
- more than 160 companies in Thailand’s textile industry were harmed by the 2011 floods, stopping about a quarter of the country’s garment production, much of it for U.S. companies;
- electric power company Constellation Energy experienced reduced quarterly earnings of about $.0.16 per share due to the record-setting 2011 heat wave in Texas that forced it to buy incremental power at peak prices;
- last year’s drought in Texas also caused more than $2 billion of cotton losses, raising prices and limiting supplies for apparel companies that source from the state;
- U.S. property insurers experienced some $32 billion in insured damage losses last year, second only to losses in 2005 when Hurricane Katrina hit the Gulf Coast. Much of last year’s damage occurred away from the coast, including hurricane-driven storms in Vermont, wildfires in Texas and hailstorms in Arizona.
You can make changes in your investments to compensate for climate change impacts. Talk to JustInvest about managing portfolio risks in your Super, Pension and Investments related to climate change impacts.
See: http://www.csrinternational.org/2012/06/27/physical-risks-from-climate-change/
This article from PHYSICAL RISKS FROM CLIMATE CHANGE: A guide for companies and investors on
disclosure and management of climate impacts, Prepared by David Gardiner & Associates, LLC
See also: https://www.oxfam.org.au/
