16 Aug Companies on sustainable climate damage and investments
Nearly 60 percent of companies in Europe feel more or less exposed to the effects of climate change. The good news is that more and more companies are taking climate action. Dutch companies are leading the way, according to research by the European Investment Bank EIB.
That there is a connection between climate change and extreme weather is undisputed for most scientists. And that means that climate policy helps to limit the damage caused by weather extremes. Very heavy rainfall and flooding killed more than 200 Europeans last month. The financial damage amounted to an estimated 2.5 billion euros, according to the EIB.
The fact that companies fear that they will have to deal with damage from climate change is not new. Central banks and insurers have been warning about this for some time. The same fear lives in the United States, but slightly less. Whereas in Europe 60 percent of companies take climate damage into account, in the United States this is 50 percent. Companies in southern European countries say they are more vulnerable to climate damage than countries in north-western Europe. That’s because heat waves and long periods of drought pose a threat to agriculture and tourism.
More companies investing in climate policy
In Europe, 23 percent of companies say they have already experienced the effects of climate change (13 percent in the Netherlands). More and more companies are investing in climate policy. In Europe, 45 percent of the company says it actively invests in projects that combat climate change. In the US it is 32 percent. Within Europe, companies from Finland (62 percent) and the Netherlands (58 percent) top the ranking. Energy saving projects are the most popular. Greece, by the way, is lagging behind. Only 18 percent of the companies there invest in climate projects.
Businesses in Europe say the transition to a climate neutral economy could accelerate if governments provide clarity on regulation and taxation. Although US companies are less involved in climate policy, the investment barriers are lower.
Positive effects of green investments
Companies are positive about the energy transition, because they think they can sell more (green) products by switching to green energy, for example. Investments in the transition are also considered to be positive for the reputation of the company. A quarter of companies are concerned that the transition could lead to disruptions in the supply chain. The EIB publication does not elaborate on the background to this.
The question is whether the investments of companies in climate-neutral chains are going fast enough. Last week, the IPCC published an important climate report that paints an erratic picture of the future: we will have to deal with much more extreme weather.