Between 15% and 20% of company cash flows are at risk, on average, because of climate change.
This is according to an analysis developed by global asset manager Schroders. As of March 31 of this year, Schroders is responsible for the management of £416.3 billion (€486.7 billion, $520.6 billion) of assets.
Says Schroders’ Andy Howard, global warming “is a real problem, not just a societal one but a financial one.”
This month Schroders has introduced a tool, a Climate Progress Dashboard, to track, based on 12 indicators, climate change progress. The indicators include coal production, carbon prices, corporate planning, renewable capacity, oil and gas investment, and political ambition.
The Schroders Climate Progress Dashboard will provide a snapshot of likely temperature rises based on the indicators and will help its fund managers “evaluate the challenges ahead”.
The Schroders Climate Progress Dashboard currently predicts that global temperatures are on course to rise by four degrees above pre-Industrial Revolution levels.
PKA, the Danish pension fund, has demanded that companies take action to protect their business models from climate change. Such action would include reducing their reliance on fossil fuels or moving towards greener energy. PKA is divesting “from certain companies involved in energy and carbon-intensive extraction methods, which we do not believe fit in a low-carbon economy.”
See:
“Schroders Launches Climate Progress Dashboard, Tracks Current Course Of 4°C Warming” | Joshua S. Hill, CleanTechnica, 19 July 2017
“Schroders launches Climate Progress Dashboard” | Schroders, 17 July 2017
“Schroders issues climate change warning” | Attracta Mooney, The Financial Times, 15 July 2017
“Danish pension fund PKA dumps Canadian oil” | Attracta Mooney, The Financial Times, 14 April 2017
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