Climate change and institutional investors

Business value at risk from climate change: information for shareholders and pension trustees on potential climate change impacts on business value, financial risk and returns.

Cloudy city sunrise

Publication date: 2005 - 2006
Information in these reports was correct at the time of publication


Climate change and shareholder value

Publication date: 16/03/2006

Companies across a wide range of sectors are exposed to climate change - both in terms of the physical risks (e.g. asset damage from increasingly frequent extreme weather events, production downtime) and the constraints and cost of carbon dioxide and other greenhouse gases imposed by regulatory (and voluntary) mitigation measures.

During 2005, the Carbon Trust worked with Cairneagle Associates to develop a methodology for analysing shareholder value at risk from climate change. The model developed offers a robust, replicable, top-down approach to analysing such value at risk. In addition to a company's own energy linked ('direct') and electricity linked ('indirect') carbon emissions, it looks further along the value chain and considers broader potential risk.

This analysis illustrates what a determined shareholder (or other onlooker) could derive about value at risk from climate change, based upon what companies disclose today.

A climate for change - A trustee's guide to understanding and addressing climate risk

Publication date: 14/11/2005

There is no escaping the reality that climate change is just one of the many issues facing pension trustees today. As such, it is essential that trustees have clear sight of the steps that can be taken to address the issue.

This publication provides pension trustees with:

  • Relevant, high-level information on the potential for climate change to impact financial risk and returns.
  • An exploration of the roles and responsibilities of fiduciaries in light of this. 
  • Information about the steps that can be taken to address climate risk.

This report has been produced by Mercer Investment Consulting, for the Carbon Trust and the Institutional Investor Group on Climate Change (IIGCC). Further information and contact details for each organisation can be found at the end of this booklet.


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