Why Climate Change Matters

Climate change could spark the world’s next financial crisis.

– Paul Fisher, former deputy head of the Bank of England, 2016

Climate change is a systemic risk that is impacting the financial sector, increasing uncertainty and investment risk, whilst also producing new opportunities. Managing these risks and capturing new opportunities is therefore crucial to protect assets, optimize performance and reach sustainability goals.

Examples of climate change impact

China – drought 2010

  • ~300% increase in cotton prices
  • 30% decline in profits reported by H&M in Q1 2011
  • 17% fall in Gap Inc. share price

Russia - heat wave 2010

  • $5bn loss for Russia’s grain producers
  • $500bn total economic fallout
  • 13% loss in quarterly profits reported by Carlsberg in Q2 2011

South Africa – carbon tax 2017-2020

  • ArcelorMittal SA’s carbon tax bill is ~ $25 million per year
  • Eskom’s carbon tax bill is ~ $704 million per year

California – climate change law AB 32

  • The carbon price costs Valero Energy Corp. ~ $100 million per year
  • As a possible hedge to the new fuel standard, Exxon Mobil invested $600 million to create fuel from algae

Why you should get involved right now

Compliance with global policy
  • Paris Agreement went into force in November 2016
  • 189 countries committed to greenhouse gas targets by 2030
  • 2°C long term climate stabilization goal
Here to stay
  • Warming is up by 1°C over the past 100 years
  • CO2 concentration levels ensure an additional 0.5°C in the years to come
  • Warming above 2°C could have disastrous effects, so the issue won’t go away
Increase profitability
  • Energy efficiency projects reduce energy costs
  • Climate change mitigation brings socio-economic benefits
  • Low carbon technologies are experiencing high growth
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