We all know climate change has been a headline issue for a number of years. Despite this, it is fair to say that a climate change strategy – no doubt to the exasperation of many a sustainability manager – has been viewed by and large as a ‘nice to have’ by senior executives, rather than a fundamental part of core business that has a significant impact on the bottom line. But there are strong signs to suggest that things are changing, not least because investors are viewing climate change as an increasingly important investment issue.
The FairPensions’ research reveals that major investors are starting to give serious consideration to the affect of climate change when making investment decisions. Not only are investors looking at the physical risks due to climate change, but also the potential financial risks and opportunities from regulation. As these risks increase and become more imminent (the UK CRC and likely climate change legislation in the US are examples), investor interest will increase and climate risk will become increasingly important when determining share value. The strong appetite for climate change regulation amongst investors is therefore of no surprise, especially given the current inconsistency on disclosure.
It now seems madness for any company, even in a lower risk sector, to put their head in the sand and hope climate change will go away. Like it or not, climate change is going to be a fundamental part of business. It is important companies begin taking action now before investors start abandoning ship. But rather than viewing climate change as a risk, companies should consider it an opportunity – a chance to differentiate and build brand equity in an ever more environmentally conscious world. By taking such proactive action in response to the US Chamber of Commerce’s stance on climate change, companies such as Nike and Apple are already seizing the opportunity and stealing a march on competitors.