© Reuters. FILE PHOTO: The Losentze River is pictured after a flash flood in Chamoson, Switzerland, August 12, 2019. REUTERS / Denis Balibouse
By Carolyn Cohn and Nina Chestney
LONDON (Reuters) – European energy companies Centrica (OTC 🙂 and Galp, the food company Nestlé and the watchmaker Swatch are among the 50 companies worldwide highly exposed to physical climate risks, investors with assets of $ 10 trillion said on Thursday with.
The companies that operate in the energy and mining, food, pharmaceutical or technology manufacturing, or transportation and utilities sectors are more exposed to issues like flooding than other companies in their industry and region, the Institutional Investors Group On Climate Change (IIGCC said ). .
In a letter to European, Asian and US companies from more than 50 IIGCC members, investors urged companies to properly identify themselves and respond to events such as floods, droughts and extreme heat.
The IIGCC also published a set of expectations for all companies to build resilience to the physical risks of climate change, including scenario testing and reporting against a set of risk metrics.
Corporations have come under pressure from activists and investors to reduce their carbon footprint, and Shell (LON 🙂 plans to appeal a landmark ruling on the matter.
However, physical risks to a company can be overlooked, said Marion Maloney, head of Responsible Investment & Governance at the Environment Agency's UK pension fund.
"We think the climate change debate has two parts – often the element of physical risk is the poor cousin who doesn't get enough attention," she said.
"I want every company in my portfolio to take these expectations into account."
Other investors who signed the letter were AustralianSuper, Impax Asset Management and Lombard Odier.
Centrica, which owns British Gas, one of the UK's largest utilities, said it "assesses both physical and temporary risks and opportunities that we may face in a range of climatic scenarios" and "assesses our disclosures on the outcomes Increase Analysis ". in line with best practice ".
Nestlé from Switzerland said it is "already doing a scenario analysis to assess the physical impact on our value chain over time".
Portuguese company Galp Energia said it was committed to being a leader in the quality, accuracy and transparency of the information it makes available to investors and other stakeholders.
"This year we also completed an assessment of the climate risks and opportunities, including physical risks and transition, that may affect Galp's expected portfolio through 2025, 2030 and 2050," added Galp.
The Swiss Swatch declined to comment.
The investor initiative faces the next round of global climate talks in Scotland in November, which will call on governments to accelerate efforts to achieve net zero emissions by 2050.
It follows the release of a landmark United Nations climate report in August warning that global warming is dangerously close to spiraling out of control.
The companies were identified based on research by the IIGCC and climate risk data company Four Twenty Seven.