According to a study undertaken by a research team, big companies are worried about the dynamic impacts of climate change on the bottom line of their industry. These businesses are reportedly affected by the drastic climate change occurring currently. The discussions of the S&P 500 companies centers more primarily around the financial impacts incurred due to climatic conditions.
A report of the S&P Global Ratings released on Tuesday, 12th June, read, “With climate change and severe weather events increasingly making headlines, lenders and institutional investors are becoming more interested in how these events are hitting the bottom lines of companies around the world.”
As reported combinedly by S&P 500 and Resilience Economics, around seventy-three companies under the S&P 500 revealed openly the effects on the yield of their company from climate change for the financial year 2017. Climate change reportedly had near about 6 percent impact on the annual earnings of the companies. This might sound to be something small, but it is potentially considerable as the impact could worsen if climate change is not controlled.
According to the report, “In S&P Global Ratings’ view, the effect of climate risk and severe weather events on corporate earnings is meaningful.” Further, the report explained, “If left unmitigated, the financial impact could increase over time as climate change makes disruptive weather events more frequent and severe.”
The companies need to undertake some complex estimation methods for understanding the impact of climate change that could adversely affect a huge range of financial facets in their business.
The S&P stated that all the business companies need reporting on the issues related to climate change in order to make their impacts on the overall flow of cash prominently visible.
In accordance with the 10 years analysis of the S&P, the Chief Executive Officers of top companies use the terms such as “climate” and “weather” more in their discussions as compared to the terms such as “Trump,” and “recession.”
The financial elite of the world has now woke up from a long sleep to the impact of these climate changes. If the impacts remain unchecked and uncontrolled, the increasing global temperatures could bring in a potential havoc.