CLIMATE CONCERN
Among most discussed topics on earnings calls
Report shows big business paying attention to global warming,
LONDON— The world’s biggest companies are increasingly worried about climate change. The terms “climate” and “weather” combined were among the most frequently discussed topics among executives of Standard & Poor’s 500 companies. They beat out “Trump,” “the dollar,” “oil” and “recession” according to analysis of 10 years of earnings call transcripts by S&P Global Ratings.
“The effect of climate risk and severe weather events on cor- porate earnings is meaningful,” S&P said in the joint report with Hamilton, Bermudabased Resilience Economics Ltd. “If left unmitigated, the financial impact could increase over time as climate change makes disruptive weather events more frequent and severe,” the report added.
The analysis shows that 15 per cent of S&P 500 companies publicly disclosed an effect on earnings from weather events, with only 4 per cent quantifying the effect.
The average impact on earn- ings was 6 per cent in financial year 2017.
More companies are expected to increase reporting on climate issues as management teams become more accountable for understanding the financial impact of weather events, S&P said.
“We may begin to see institutional investors build climate risk factors into their portfolio selection processes, thereby placing greater emphasis on climate when directing investments,” the ratings agency said in its report.