Large corporate assets at increased risk from climate impact – S&P Global

Large corporate assets at increased risk from climate impact – S&P Global


By Juliette Portalla

(Reuters) – More than 90% of the world’s largest companies will have at least one asset that is highly vulnerable to the physical effects of climate change, data and analysis from S&P Global (NYSE ๐Ÿ™‚ showed on Thursday.

From heat waves to floods, increasingly extreme weather events are causing disruption around the world, prompting companies and investors to strive to better understand and measure the risks to their assets.

He added that if the world continues on the same path as it is now and fails to rein in harmful climate emissions, 98% of the largest companies – classified as those included in the S&P Global 1200 index – could be severely exposed by 2090.

However, if the Paris climate agreement’s goal of limiting global warming to less than 2ยฐC is reached, the share of large companies with assets exposed to high physical risk can be reduced to 39% during that period.

โ€œInvestors and companies are looking for advanced analytics to respond to the financial impact of climate change. Central to this is the ability to quantify the financial impact of climate change at the asset level to enable meaningful mitigation and adaptation planning,โ€ James McMahon, CEO and Climate Service Officer, part of S&P Global said. , in a statement.

Using climate models that simulate the physics, chemistry and biology of the atmosphere, land and ocean, S&P said it was able to assess risks for more than 20,000 companies and more than 870,000 asset locations, each scoring on a scale from zero to 100.

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By the 1950s, every company will have at least one asset with a score of greater than 75, which is considered to be at very high risk from extreme heat, extreme cold, wildfires, water stress, drought, coastal flooding, river flooding, and tropical cyclones.

After recording an asset for exposure to physical risk, Standard & Poor’s is then able to calculate the financial impact, allowing companies to adjust their exposure.

โ€œIn simple terms, this data set allows companies and investors to understand their climate risks โ€” and vitally, what it could cost,โ€ McMahon said.

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