skip to primary navigationskip to content
 

New model quantifies impact of climate and energy regulation on company profitability

last modified Oct 05, 2016 04:26 PM
12 May 2016 – Anticipating a continued shift to a low carbon society the Investment Leaders Group, made up of a global network of investors and convened by the Cambridge Institute for Sustainability Leadership, has developed a methodology to model the impact of carbon- and energy-regulation scenarios on firm-level profitability.

Read about the work and download the full report.

Read the press release.

Spurred on by commitments made at the recent COP 21 climate talks in Paris, the Investment Leader’s Group (ILG) publishes a new report today which analyses the impact of carbon and energy regulation on industries and more specifically, companies, at a national level.

The model in this report helps to provide ‘context’ for investors as the world transitions to a low carbon society. For instance, it can shed light on a company’s exposure to regulation, the possible impact on its profitability and ways in which it might shape its capital spending to secure its future competitiveness, for example, by deploying climate compatible technologies.

The report also provides clarity on what data investors need to further improve the quality of their analysis. Despite a growing body of research on the cost to their business, most companies still provide only patchy disclosures on how climate change might impact them.

The illustrative results of the model on companies cover three high-risk sectors (electric utilities, oil refining and natural gas) in the UK, Spain, Germany and Canada (Alberta) and US (California).

The work is launched at a time when government authorities are stepping up their focus on environmental risks. Under the Chinese Presidency, the G20 Green Finance Study Group is analysing how to enhance the ability of the financial system to mobilise capital for green investment.

“The work of the ILG could not be more timely given the attention G20 governments are giving to how environmental risks are handled in the financial system this year, said Andrew Voysey, Director of Finance Sector Platforms at CISL. “G20 Ministries of Finance and Central Banks are increasingly aware of the challenges posed by environmental risks and risks from the transition to a zero carbon economy. They want to understand the tools and techniques financial institutions are developing and what challenges they are facing implementing them. The ILG’s experience is extremely relevant.”


Media contacts 

Michael Hoevel | Media Consultant | c/o Marchmont Communications

  | T +44 79 62 657 322 

Adele Williams | Media & Communications | Cambridge Institute for Sustainability Leadership

| T +44 1223 768451 


About the Investment Leaders Group

The Investment Leaders Group (ILG) is a global network of 11 leading investment firms convened by the University of Cambridge Institute for Sustainability Leadership. ILG members are: Allianz Global Investors, First State Investments, Loomis Sayles, Natixis, Nordea, Old Mutual, PensionDanmark, Standard Life Investments, TIAA Asset Management and Zurich Insurance Group. The ILG’s mission is to shift the investment chain towards responsible and long-term value creation, so that economic, social and environmental sustainability are delivered as an outcome of the investment management process as investors go about generating robust, long-term returns. 

Share this

Members

Investment Leaders Group members. Cambridge Institute for Sustainability Leadership.

 *HSBC Bank (UK) Pension Scheme

Contact

Kajetan

Kajetan Czyz, Senior Programme Manager, Investment Leaders Group