Climate Change Risk and Shareholder Value

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Alexandra Tracy, Hoi Ping Ventures - China

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  • Climate Change Risk and Shareholder Value

    1. 1. EXTRA-FINANCIAL ANALYSIS Climate Change Risks TBLI Bangkok - May 2007
    2. 2. Importance of “extra-financial” analysis – climate change risks An example: Pearl River Delta, China EXTRA-FINANCIAL ANALYSIS
    3. 3. Climate change mitigation target
    4. 4. Technology and Innovation Local, national and international policy measures Market Mechanisms Tax & Emissions Trading Energy Efficiency Adaptation Global & Regional Regimes
    5. 5. “ Climate change is not by any means just an issue about the environment. It is a business issue.” Rt Hon. Margaret Beckett MP
    6. 6. Potential Threats to Shareholder Value <ul><li>Regulatory risk </li></ul><ul><li>Litigation risk </li></ul><ul><li>Competitiveness risk </li></ul><ul><li>Reputational risk </li></ul><ul><li>Physical risk </li></ul>
    7. 7. An example: Pearl River Delta, China
    8. 8. Rapid industrial development 1979 2004
    9. 9. Sophisticated infrastructure
    10. 13. Disruption is Bad for Business <ul><li>Facility operation disrupted </li></ul><ul><li>Power supply interrupted </li></ul><ul><li>Delivery of components halted </li></ul><ul><li>Export of finished goods delayed </li></ul>
    11. 14. Potential impacts on business <ul><li>Lower revenues </li></ul><ul><li>Higher operating costs </li></ul><ul><li>Higher taxation </li></ul><ul><li>Decreased FDI </li></ul><ul><li>Negative for shareholder value </li></ul>
    12. 15. Alexandra Tracy (852) 2203 4614 [email_address] http://www.civic-exchange.org/publications/2006/cc.pdf

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