June 4, 2019 / 4:03 AM / 3 months ago

FACTBOX-Companies spot big risks and opportunities in climate crisis

LONDON, June 4 (Reuters) - More than 200 of the world’s largest listed companies have forecast that climate change could soon cost them a combined total of almost $1 trillion, according to a report published by British-based charity CDP on Tuesday.

CDP, formerly known as the Carbon Disclosure Project, said 6,937 companies had responded to its 2018 questionnaire asking companies to assess their climate-related risks and opportunities. CDP provided Reuters with the below edited extracts of some of the answers it received:

EXAMPLES OF CLIMATE-RELATED RISKS IDENTIFIED BY COMPANIES:

Australia and New Zealand Banking Group (ANZ) – Almost $46 billion of potential financial impacts.

Key risks: Reputational risks due to stakeholder concerns; extreme variability in weather patterns affecting agribusinesses; reduced demand for goods and services due to shifts in consumer preferences; damage to offices or branches; and risks over policy and regulation, including regulatory uncertainty affecting lending to the energy sector, and enhanced emissions-reporting obligations.

BMW AG – More than $10.3 billion of potential financial impacts.

Key risks: Increased operating costs due to changing availability of natural resources including water; extreme weather events causing damage to facilities and infrastructure; and changes in the market leading to an increase in taxation and emissions regulations.

Total - $10 billion of potential exposure.

Key risks: Increase in the adoption of carbon taxes; investors divesting from Total due to fears of stranded assets; increases in emissions regulations; extreme weather events impacting operations.

Unilever Plc. - $5.4 billion of potential financial impacts.

Key risks: Carbon and energy taxes increasing operating costs; changes in precipitation patterns leading to reduced demand for products due to customers increasing poor access to water, and reduced production capacity due to increased water stress on operations.

Sony Corporation - $3.4 billion of potential financial impacts.

Key risks: Higher regulations compliance costs; reputational impacts as consumer preferences shift; reduced production capacity of key raw materials for batteries due to acute changes in climate; increasing extreme weather events impacting supply chains; costs associated with keeping products in line with efficiency regulations and standards.

EXAMPLES OF POTENTIAL OPPORTUNITIES IDENTIFIED BY COMPANIES:

Suncor Energy Inc. – More than $113 billion of potential opportunities.

Key opportunities: Potential opportunities in biofuels; reduced operating costs through efficiency gains and cost reductions; purchase or trade offsets in the market; further building out its renewable energy portfolio.

Bank of America – More than $142 billion of potential opportunities.

Key opportunities: Increased demand for low carbon products and services; new opportunities to finance renewable energy projects; green bonds; reduced capital costs for onsite renewable energy due to U.S. federal investment tax credits; opportunities for new investments in emerging markets; better competitive position to reflect shifting consumer preferences, resulting in increased revenues

Nestle – More than $96 billion of potential opportunities.

Key opportunities: Better competitive position due to shifts in consumer preferences; improving efficiency, quality and productivity translates into more efficient use of raw materials and less waste; work with suppliers to increase reliable supply of raw materials and management of resources; cap and trade schemes presenting incentives to cut greenhouse gas emissions through efficiency projects.

Canon – $17.8 billion of potential opportunities.

Key opportunities: Increased demand for lower emissions products and services; working with customers to help reduce their emissions; promoting energy-saving activities with energy providers, raising energy efficiency and cutting costs

Vale – $1.1 billion in potential opportunities

Key opportunities: Increased market valuation through resilience planning; reduced exposure to greenhouse gas emissions through working to become self-sufficient in electricity generation through prioritizing renewables, and changing to electrical from fossil fuel-reliant equipment; increased reliability of supply chain and ability to operate under various conditions through investing and fostering academic research into climate change and its societal impacts.

VARIED RESPONSES

CDP said some companies responded to its questionnaire but had not yet provided any figures for potential climate risks and opportunities, including: Rio Tinto, Royal Dutch Shell, Mondelez, Occidental Petroleum, Credit Suisse, Equinor.

Some companies told CDP they were not exposed to substantive climate-related risks and opportunities, including: Wal-Mart, Boeing Company, Daimler AG, Citigroup Inc., UPS.

CDP said some companies had chosen not to respond to its questions relating to climate-related risks and opportunities: JPMorgan Chase & Co., PetroChina Company Limited. (Reporting by Matthew Green; Editing by Mark Potter)

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