93% of US-listed companies ‘affected by climate risk’

Channels: Equity, Investors

Companies: Sustainability Accounting Standards Board, SASB, Financial Stability Board

People: Jean Rogers

Climate risk affects 93% of the US equities market, according to a report.

Climate Risk – a report by the Sustainability Accounting Standards Board (SASB) – found that material risks impact US-listed companies with a combined value of $27.5 trillion, equating to 93% of companies by market capitalisation.

“Climate is the most prevalent, cross-cutting of the issues [we look at],” said Jean Rogers, CEO of SASB at an event in London ahead of the first meeting of the climate disclosure task force, which was recently set up by the Financial Stability Board.

She added that climate change manifests itself differently according to industry. The report has broken these risks down into industry-specific topics.

For example, the risks relevant to investors could be the ability of healthcare facilities to deal with excess patients during climate events, or the carbon intensity of reserves in the oil and gas sector, or in real estate, reporting on the vulnerability of buildings to extreme weather, or in the finance sector, reporting on the vulnerability of banking portfolio to climate risks.

Rogers suggested three categories for companies to report on: the physical effects of climate change (which effect some 61% of listed companies by market capitalisation), transition to a low-carbon economy (affecting 89% of companies), and the potential impact of climate regulation (relevant to 21% of companies).

“There’s a significant amount of boiler-plating disclosure currently,” she said, suggesting that a lot of disclosure is top-line and nature and does provide information that is material to investors.

Peter Cripps