Climate Climbs to Top Corporate Concern

June 17, 2018



The world’s biggest companies are increasingly worried about climate change.

The terms “climate” and “weather” combined were among the most frequently discussed topics among executives of Standard & Poor’s 500 companies, beating “Trump,” “the dollar,” “oil” and “recession” according to analysis of 10 years of earnings call transcripts by S&P Global Ratings.

“The effect of climate risk and severe weather events on corporate earnings is meaningful,” S&P said in the joint report with Hamilton, Bermuda-based Resilience Economics Ltd. “If left unmitigated, the financial impact could increase over time as climate change makes disruptive weather events more frequent and severe.”

The analysis shows that 15 percent of S&P 500 companies publicly disclosed an effect on earnings from weather events, with only 4 percent quantifying the effect. The average impact on earnings was 6 percent in financial year 2017.

More companies are expected to increase reporting on climate issues as management teams become more accountable for understanding the financial impact of weather events, S&P said.

“We may begin to see institutional investors build climate risk factors into their portfolio selection processes, thereby placing greater emphasis on climate when directing investments,” the ratings agency said.



2 Responses to “Climate Climbs to Top Corporate Concern”

  1. indy222 Says:

    Unlike any other corporate issue, climate is solved ONLY globally. Local climate on your corporate facilities is determined by the GLOBAL CO2 levels, and in the competitive nature of capitalism, instead we get attempts to blame and cost-shift, not climb-on-cross self-sacrifice of e.g. lowering carbon emitting activities. I see no carbon tax bills being introduced by Republicans, to take a simple and effective legal strategy for motivating decarbonization. Corporations may be starting to do more worrying and cost-accounting about future climate change (I assume they’re not as stupid as the Republican rank-and-file who voted in their favorite political party), but the name of the game continues to be maximize profit relative to the competition, so that means what’s needed is global legal policy action, because the realistic solutions will be more painful than most admit.

  2. Paul Whyte Says:

    While the solution to climate change is only solved globally. The musical chairs game of who is left holding the fossil stocks when denial crumbles and there is a long-term drop in share price is solved with each share transaction. When to be moving away from the fossil companies is the question of this time.

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