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(Updates with comment from Galp Energia)
LONDON, Sept. 23 (Reuters) – European energy companies Centrica and Galp, food group Nestlé and watchmaker Swatch are among the 50 global companies with high exposure to physical climate risks, investors said Thursday with $ 10 trillion in ‘assets.
Businesses, which are involved in energy and mining, food, pharmaceuticals or technology manufacturing, or transportation and utilities, are more prone to problems such as flooding than other businesses. industry and region, said the Institutional Investors Group On Climate Change (IIGCC). .
In a letter to European, Asian and American companies with more than 50 IIGCC members, investors asked companies to properly identify themselves and respond to events such as floods, droughts and extreme heat.
The IIGCC has also published a set of expectations for all businesses on building resilience to physical risks from climate change, including scenario testing and reporting against a set of risk metrics.
Companies have come under pressure from activists and investors to reduce their carbon emissions, with Shell planning to appeal a landmark ruling on the issue.
But the physical risks to a business can be overlooked, said Marion Maloney, responsible investment and governance manager at the UK Environment Agency’s pension fund.
“We think there are two sides to the climate change debate – often the element of physical risk is the poor cousin not getting enough attention,” she said.
“I want every company in my portfolio to look at these expectations. “
Other investors who signed the letter included AustralianSuper, Impax Asset Management and Lombard Odier.
Centrica, which owns British Gas, one of Britain’s largest energy suppliers, said it “is assessing both the physical and transient risks and opportunities we may face in a number of climate scenarios “and” increased our disclosures on the results of the analysis in line with best practices. “
Swiss Nestlé said it was “already undertaking a scenario analysis to assess the physical impacts on our longer-term value chain”, adding that this “would provide direction for our mitigation and adaptation actions through our raw material supply and operational footprints ”.
Portugal’s Galp Energia said it is committed to being a leader in the quality, accuracy and transparency of the information it provides to investors and other stakeholders.
“This year, we also concluded an assessment of climate risks and opportunities, including physical and transitional ones, that could impact Galp’s expected portfolio by 2025, 2030 and 2050,” Galp added.
Swiss Swatch declined to comment.
The investor initiative precedes the next round of global climate talks in Scotland in November, where governments are urged to step up efforts to reach net zero emissions by 2050.
It follows the release of a landmark United Nations climate report in August, warning that global warming was dangerously on the verge of spiraling out of control.
The companies were identified based on research conducted by the IIGCC and climate risk data company Four Twenty Seven. (Reporting by Carolyn Cohn and Nina Chestney; editing by Alex Richardson)
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