Nestlé and Delta are among dozens of companies most at risk from climate change, investors warn

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Top line

Leading companies like Nestlé, Delta Air Lines and Clorox are among dozens of global companies “highly exposed” to climate risks, a group of leading investors warned Thursday, as they urged companies to do so. more to face the risks of climate change.

Highlights

Fifty risky businesses around the world are more likely to be at risk from natural disasters like floods, wildfires, extreme heat and hurricanes, according to the Institutional Investors Group On Climate Change (IIGC).

More than 50 IIGCC members – who represent some $ 10 trillion in assets and including Lombard Odier and Impax Asset Management – urged companies at risk to do more to identify and respond to threats in a letter Thursday , Reuters reported, and the IIGCC has issued guidelines on what it expects from all companies to tackle the problem.

Investor recommendations include developing strategies to deal with physical climate risks, building resilience to those risks, including risks in climate governance frameworks and reporting them over time to better measure progress.

The physical risks of climate change also present opportunities for businesses, according to the IIGCC report, such as offering businesses the opportunity to develop and adopt new technologies, offer new products and services, and improve their processes and infrastructures.

IIGCC Managing Director Stephanie Pfeifer said it is “more important than ever” for investors to understand and consider the risks of climate change, adding that “companies cannot afford to ‘ignore the impact’ this might have on business.

Crucial quote

As investor pressure has grown for companies to reduce their carbon emissions, the more tangible physical threats can be overlooked. Marion Maloney, responsible investment and governance manager at the UK Environment Agency’s pension fund, told Reuters that there are “two sides to the climate change debate” and that the physical risks are often overlooked.

Key context

While critics often deride the costs of transitioning to a greener economy, climate change is costing much more, according to the European Central Bank. In the United States alone, there have been a number of climate-related disasters this year, including severe heat waves, cold spells, droughts, wildfires, storms and hurricanes. Around the world, the number of weather-related disasters has quintupled over the past 50 years and has become more costly but less deadly, according to a new report from the World Meteorological Organization. Seven of the ten costliest disasters, including the first six, were caused by storms and hurricanes in the United States, WMO found, and US losses from extreme weather events account for 38% of all losses global economies ($ 1.4 trillion). Estimates suggest that Hurricane Ida, which made landfall in late August, could join this list. Experts overwhelmingly attribute this increase in severe weather to man-made climate change.

Further reading

Exclusive: Centrica, Nestlé, Swatch among companies exposed to physical climate risks – investors (Reuters)

Expectations of business investors on physical climate risks and opportunities (IIGCC)

Weather-related disasters have quintupled in the past 50 years, according to the United Nations Meteorological Agency (Forbes)


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