Environmental impacts on investments quantified
Investors in the world’s major corporates have been given something to think about with new research finding that the world’s top 3,000 companies were responsible for $2.15 trillion worth of environmental damage in 2008.
The data is the result of a study conducted under the auspices of the United Nations Principles for Responsible Investment which was designed to quantify in monetary terms the environmental harm caused by business and the possible future consequences for investor portfolios and company earnings.
The study warns investors that as environmental damage and resources depletion increases and governments start applying a more vigorous “polluter pays” principle, the value of large portfolios would be affected through higher insurance premiums on companies, taxes, inflate input prices and the price tags for clean-ups.
The study found that, in total, global environmental damage caused by human activity in 2008 represented a monetary value of $6.6 trillion, which was the equivalent of 11 per cent of global gross domestic product.
It said the most environmentally damaging business sectors were utilities, oil and gas producers, industrial metals and mining and warned that workers and retirees would see lower pension payments from funds invested in companies exposed to environmental costs.
AUTHOR
Mike Taylor
Recommended for you
ASIC is suing advice business Fortnum Private Wealth, a subsidiary of Australia’s largest licensee Entireti, for alleged cyber security failures which led to client data being published on the dark web.
Just one day after announcing it was awaiting a final bid from CC Capital, the two firms have entered a scheme of arrangement, albeit at a lower price than initially bid.
AMP’s platform has seen net cash flow increase 63 per cent in Q2, while its superannuation and investment division returned to positive cash flow for the first time since 2017.
Centrepoint Alliance, the third-largest advice licensee, is forecasting to report a net revenue increase of 13 per cent for FY25, while adviser numbers have reached more than 570.
