What’s Going On Here?

The effects of climate change could cost 215 of the world’s biggest companies a combined $1 trillion (according to a report).

What Does This Mean?

The report publisher

• The Carbon Disclosure Project (CDP), is a UK-based charity aiming to encourage companies and countries alike to better consider and disclose their effects on the environment;
• So, with some skin in the climate change game, its findings may not be completely believed by some investors;
• 7,000 companies were surveyed.

The report

• 215 of the biggest anticipated climate change could cost them $970 billion. Why? Their profits may lower because of:
  • higher temperatures and unpredictable weather could decreasing their output;
  • rising costs of carbon emissions.
• However, these companies also anticipated $2 trillion worth of opportunities (doubled the likely costs) partly thanks to wider use of electric vehicles and clean energy sources.

Why Should I Care?

The bigger picture: Companies warm to investors.

• Most companies suggest the positive financial impacts of climate change outweigh any negatives – saying otherwise could cause investors to anticipate falling profits and sell their stocks.
• Being positive’s been easier when the real costs of climate change are largely unknown, complicated, and hard to predict (even surveyed oil companies – whose current businesses are challenged by renewable energy sources – were optimistic.)

For you personally: Environmentally friendly investing is lit.

• Environmentally friendly investment options are rising in popularity.
• As more than $30 trillion is expected to enter the hands of eco-conscious US millennials over the coming decades, the demand for environmentally considerate investment funds may soar.

Environmental investment is a form of socially responsible investing (SRI) where investors focus on choosing investments in companies that support or provide environmentally friendly products and/or services.

Content source: Finimize. (2019) Global Warming Burns Cash. Available from: https://www.finimize.com/wp/news/global-warming-burns-cash/ [Accessed 8 June 2019]