Survey: How Equity Analysts Link Climate Change And Company Valuation

LINKING CLIMATE CHANGE AND COMPANY VALUATION

Introduction

Equity Analysts Divide Into Believers, Sceptics And Cynics

No Consensus Within Sectors — Apart From The Utilities Sector

Analysts Suffer From An Information Gap And A Knowledge Gap

Regulations And Input Costs Dominate Climate Change Thinking

Energy Costs Significantly Outweigh Climate Change Impacts

Analysts View Climate Change As A Corporate Branding Issue

SURVEY DATA AND ANALYSIS

Demographics Of Survey Participants

Equity Analysts Buy Into The Business Impact Of Climate Change

Uncertainty Clouds Climate Change Information Needs

Understanding Regulatory Impacts Dominates Analyst Research Efforts

Extreme Weather Events Affect Profit Forecasts

Climate Change Strategies Get A Mixed Reaction

Climate Change Begins To Influence Company Valuation

Compliance Costs Outrank Weather Cost Impacts

Regulations, Energy And Leadership Drive Climate Change Strategy

Reputation Benefits More Likely Than Financial Benefits

Climate Change Strategy Can Deliver Competitive Advantage

Equity Analysts Split Into Believers, Sceptics And Cynics

WHAT IT MEANS FOR FINANCIAL COMMUNICATIONS

Draft A Company Position On Climate Change

Benchmark Climate Change Reporting Capabilities

Launch A Climate Change Financial Analysis Project

Forecast When Climate Change Will Have A Material Impact On Profits

Communicate On Issues Likely To Receive A Positive Response

TABLE OF FIGURES

Figure 1. Survey respondents represent 22 investment banks

Figure 2. Survey respondents cover 13 different industry sectors

Figure 3. Equity analysts buy into the business impact of climate change

Figure 4. Uncertainty clouds analysts’ climate change information needs

Figure 5. Analysts rely on company-provided climate change information

Figure 6. Understanding regulatory impacts dominates research efforts

Figure 7. Extreme weather events affect profit forecasts

Figure 8. Climate change strategies get a mixed reaction

Figure 9. Climate change begins to impact company valuation

Figure 10. Compliance costs outrank emissions and weather costs

Figure 11. Equity analyst perspectives on climate change strategy drivers

Figure 12. Climate change strategy drivers: analyst and company views

Figure 13. Reputation benefits are more likely than financial benefits

Figure 14. Climate change brand benefits: analyst and company views

Figure 15. Climate change profitability: analyst and company views

Figure 16. Climate change strategy can deliver competitive advantage

Figure 17. Competitive advantage potential: analyst and company views

Figure 18. Cost advantage potential: analyst and company views

Figure 19. Equity analysts split into believers, sceptics and cynics

Figure 20. Receptivity of analysts to climate change communications