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Strandedassets Speaking later with ESG Investor , Lord Deben stressed that strandedassets – when investment assets become liabilities – will present a significant challenge for investors in the transition to a low-carbon economy. It’ll be a mess.”
The evolving climate drives physical risks—damaged or strandedassets and business-interruption costs from severe weather events. For example, one provider calculates a company’s physical risk based solely on its headquarters location, despite its global supplychain stretching across far-flung manufacturing locations.
Speaking at ESG Investors Nature Data for Institutional Investors event in December, she stressed that the plastic in play today cannot be the plastic in 10 to 30 years time, because the chemical additives involved render many products harmful to human health and the environment.
Extreme weather events increasingly point to a future that will be more dangerous than the climate that has so far underpinned human progress. For decades, scientists have studied the risks of increasing greenhouse gas (GHG) emissions on the earth’s climate. The signals of early-stage climate change are becoming unmistakably visible.
“Physical risk represents an increasingly severe risk for investors, with the escalating climate and natural capital crisis leading to elevated risks of damage from extreme weather events, supplychain disruptions, strandedassets, productivity impacts, insurance unaffordability, just transition impacts, and potential economic instability,” said Robyn (..)
In a letter to the Commission, WindEurope explained how low volumes of permitted projects have impacted Europe’s wind turbine manufacturers and wider supplychain. Increasing gas infrastructure must be avoided to avert dangerous climate impacts and strandedassets.”.
Road to COP28 Despite this evolution in climate awareness, the current rate of emissions growth and the uneven attempts to curb it mean that it is increasingly likely that global temperatures will exceed the 1.5°C
Recent events are forcing us to consider new economic paradigms. The repercussions of these dramatic events are reverberating around the world and calling us to confront deeply entrenched weaknesses in our economic systems. It does this by reforming markets to address real needs while factoring costs and stakeholder concerns.
The Global Resilience Index launched today, will help improve the way insurers, financiers and investors measure the resilience of countries, companies and supplychains. It makes no long-term sense to continue pumping money into an asset that is already destined to eventually have no value — a strandedasset.
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