Investment: climate change briefing paper

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As of late, it is almost impossible to overstate the grave threat of climate change. Several South African businesses are directly affected by weather and will, without doubt, be affected by climate change. However, in the face of compelling scientific proof, organisations as well as governments have been slow to respond.

The effects of climate change can be felt throughout an organisation as a result of new reporting requirements, changing taxation, carbon trading, different management needs, formulating adaptation policies, or changes required in governance. Increasingly, ACCA affiliates need to understand how the climate change crisis will impact businesses. For that reason, ACCA has collaborated with Trucost to develop content for the ACCA Investment: climate change brief paper. Trucost enables investors to understand how environmental issues could affect companies’ future earnings. The briefing paper covers topics such as adaptation, governance and management, investment, mitigation and taxation and provides essential information to assess the changing environment ahead.

Individuals and organisations that are dependent long-term investment are highly likely to have longer impacts because the consequences of climate changes increase over time. More and more investors are beginning to price climate change into investment decisions and allocate capital to companies that are fully integrating climate change considerations into their strategies, values and operations. According to the briefing paper, investors are starting to consider climate change in investments, focusing mainly on opportunities such as energy efficiency, clean technology and renewable energy providers. Climate change will eventually have physical effects on equity markets in the short, medium and long term.

Climate change is an urgent challenge that affects long-term corporate profitability. If climate change impact is not fully understood, organisations will encounter great challenges. Investors have a major role to play in promoting energy efficiency, alternative technology and reduction targets in the emission of harmful greenhouse gases. In the same breath, corporate leaders need to ensure that necessary steps are taken towards appropriate solutions and should steadily integrate climate change into investment analysis. Corporate leaders must rethink their business models, business priorities, and business sustainability, and to consider what climate change may mean for their objectives. The pace of climate change is accelerating. Acknowledging climate change as an inevitable factor, and recognising the need to adapt, involves bold decisions by business.

5 thoughts on “Investment: climate change briefing paper

  1. I see that climate change hits the car industry , especially with CO2 tax that was raised over the past few year. Although I don’t see how climate change can effect the general market in such a big way described in the blog. How can the changing weather effect businesses over all. Long term I can imagine a effect , but exactly what sectors in the business world will this climate change effect the most?

  2. The business environment is fast-paced and constantly changing. Because climate change directly affects some businesses and indirectly affects every single business, the corporate leaders that are quick to respond to climate change (thus adapting their businesses) will be able to keep up with national and international long term investments (without the challenges of the accelerating), climate as well as the increasing costs of environmental taxation. If the businesses are adapting to this growing problem, they are more likely to attract investors and retain company equity; allowing them to be successful in the changing business environment.

  3. This is an innovative initiative implemented by the company.It is known to all of us that the country’s resource’s are depleting due to the rapid rate of consumption by business enterprises. It is wise for potential investors to consider the change in climax as this can result in a profit or loss for himself.

  4. This is an innovative initiative implemented as this allows potential investors to be able to assess the climate issues within the country. this could further lead to further investments as people will have more knowledge of what to expect from investments.

  5. This is a brilliant strategy that ACCA implemented because people tend to forget the importance of climate change in an economy. The more people take into consideration the climate changes, the less likely their investments are to plummet.

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