World’s biggest firms foresee $1 trillion climate cost hit

People attend a demonstration calling for action on climate change during the ‘Fridays for Future’ school strike in Vienna on May 31, 2019. (Reuters)
Updated 04 June 2019
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World’s biggest firms foresee $1 trillion climate cost hit

  • ‘Most companies still have a long way to go in terms of properly assessing climate risk’
  • Fossil fuel companies who submitted responses to the study reported $140 billion of potential opportunities in the drive toward a low-carbon economy

LONDON: More than 200 of the world’s largest listed companies forecast that climate change could cost them a combined total of almost $1 trillion, with much of the pain due in the next five years, according to a report published on Tuesday.
Even so, the findings by charity CDP suggested many companies still underestimated the dangers as scientists warn that earth’s climate system is on course to hit catastrophic tipping points without rapid cuts in carbon emissions.
“Most companies still have a long way to go in terms of properly assessing climate risk,” said Nicolette Bartlett, CDP’s director of climate change, who authored the report.
Founded in the early 2000s, CDP — formerly known as Carbon Disclosure Project — is a respected voice in a growing coalition of pressure groups, fund managers, central bankers and politicians who believe global warming poses a systemic risk to the financial system.
By pushing chief executives to confront risks to their operations, advocates of greater disclosure hope to spur enough investment in cleaner industries to cut carbon emissions in time to meet global climate goals.
In its latest study, CDP analyzed survey data from 215 of the largest companies, ranging from Apple and Microsoft to Unilever, UBS, Nestle, China Mobile, Infosys, Sony and BHP.
The companies anticipated a total of $970 billion in extra costs due to factors including hotter temperatures, chaotic weather, and pricing of greenhouse gas emissions. About half of these costs were seen as “likely to virtually certain.”
Many companies also saw a huge potential upside if the world can de-carbonize in time to avert the bleakest climate scenarios, which scientists see as an existential risk to industrial civilization.
The companies in the CDP study, which have a combined market capitalization of roughly $17 trillion, saw potential opportunities worth $2.1 trillion, spanning faster-than-expected demand for electric vehicles to investments in renewables.
Investor concerns over climate risk have risen sharply in parallel with an upsurge in climate activism in many countries as the heat waves, droughts, wildfires and super-storms fueled by climate change have become harder to ignore.
In April, Bank of England Governor Mark Carney and Francois Villeroy de Galhau, head of the French central bank, warned of the risk of a climate-driven “Minsky moment” – a sudden collapse in asset prices — unless business embraced greater disclosure.
The CDP aligns its questionnaires with the reporting requirements of the Taskforce on Climate-related Financial Disclosures, a voluntary initiative launched by the G20 in 2015, which is due to publish a status report on Wednesday.
British-based CDP acknowledges its research cannot provide a perfect snapshot of companies’ thinking since a lack of mandatory reporting requirements on climate risk means it has to rely on whatever figures executives are willing to share.
The charity argues, however, that the degree to which companies are willing to engage provides a yardstick to judge the relative transparency of different sectors and generates peer pressure for greater disclosure.
Although no sector was entirely transparent on climate risk, financial services companies tended to be among the most forthcoming respondents, CDP said, accounting for about 70-80 percent of the estimated costs and opportunities.
Fossil fuel companies who submitted responses to the study reported $140 billion of potential opportunities in the drive toward a low-carbon economy — more than five times the $25 billion value of the risks they identified, CDP said.
With climate action focused on limiting the burning of coal, oil and gas, CDP urged investors to question why fossil players seemed so confident of benefiting from an energy transition that would render their existing business models obsolete.
“The financial sector seems to be identifying more risks than the real economy,” said Pedro Faria, a strategic adviser to CDP. “This raises the question: who is managing these risks?”


Made homeless by war, Syrians sell furniture to survive

A photo taken on June 13, 2019, shows a second-hand store where displaced Syrians (unseen) sell their belongings on the outskirts of the Syrian town of Abyan in the rebel-held western Aleppo province. (AFP)
Updated 25 June 2019
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Made homeless by war, Syrians sell furniture to survive

  • The Idlib region is supposed to be protected by a buffer zone deal signed by Russia and rebel backer Turkey in September

ATME, SYRIA: For years, Abu Ali sold used furniture and home appliances for a living. But he never thought Syria’s war would one day make him homeless and force him to sell his own.
His family is one of dozens stranded in olive groves along the Turkish border, who say they have had to sell their basic possessions to ensure survival.
“I sold them to provide food, drink and clothes for my children,” said the father of five, who now houses his family in a tent.
An opposition bastion in Syria’s northwest has come under heavy regime and Russian bombardment since late April, despite a truce deal intended to protect the jihadist-run enclave’s three million inhabitants.
The spike in violence in and around Idlib province has killed hundreds of civilians, displaced 330,000 more, and sparked fears of one of the worst humanitarian disasters in the eight-year civil war.
Abu Ali, his wife and their children fled their home in southern Idlib in early May, hitting the road north to seek shelter in the relative safety of the olive groves close to the border.
“I used to have a shop to buy and sell used items,” such as fridges and furniture in the village of Maaret Hurma, he told AFP, sitting in the shade of a tree near the border town of Atme.

A few days after fleeing his home village, he hired two trucks for 50,000 Syrian pounds (over $110) to bring “eight fridges, bedroom furnishings, seven washing machines, and several gas stoves” up to the olive grove.
But under the summer sun in the makeshift camp, the merchandise soon plummeted in value.
“I was forced to get rid of it or sell it — even at a very low price,” the 35-year-old said, his chin stubble already greying under a head of thick dark brown hair.
For example, the going price for a fridge originally bought for 25,000 Syrian pounds (more than $55) can be as low as a fifth of that price.
In Atme, some families have stored their fridges and other appliances in a single tent to protect them from the elements.
Outside, a top-loader washing machine sits in the shade of a tree.
Awad Abu Abdu, 35, said he too was forced to part with all his household items for a pittance.
“It was very dear to me. It was all I had accumulated over a lifetime of hard work,” said the former construction worker, who fled the village of Tramla with his wife and six children.
“I sold all our home’s furniture for just 50,000 Syrian pounds,” he said, dressed in a faded grey t-shirt fraying around the collar.
After transport costs, he was left with only half that amount to feed his family, he said.
Abu Abdu accused buyers of “cheating us, exploiting the displaced,” but said he had no other choice.
“Everything’s so expensive... and there are no organizations looking out for us,” he said.

The Idlib region is supposed to be protected by a buffer zone deal signed by Russia and rebel backer Turkey in September.
But the accord was never properly implemented as jihadists refused to withdraw from the planned cordon.
Hayat Tahrir Al-Sham, an alliance led by Syria’s former Al-Qaeda affiliate, took over administrative control of the region in January.
In the town of Atareb — about 30 kilometers from Atme, in Aleppo province — Abu Hussein received a new delivery at his shop of second-hand household appliances and furniture.
“Every day, more than ten cars arrive loaded up with items the displaced try to sell us,” said the 35-year-old.
“This means we have to pay relatively low prices, because the supply is so high” and it’s hard to then sell them all, he said.
Back in Atme, 50-year-old Waleeda Derwish said she hoped she would find someone to buy her fridge, washing machine and television, to help her provide for her eight children.
The widow transported the electrical items to “save them from bombing or looting” in Maaret Hurma, she said, a bright blue scarf wrapped around her wrinkled face.
Now the appliances represent the family’s only lifeline, she said.
“I’m forced to sell them. How else are we supposed to live?“