Companies' operational facilities and business continuity are increasingly at risk from climate risk events with new data suggesting revenue impairments are set to increase 90 percent by 2050 under the current emissions trajectory.
The data has been published by physical risk experts, XDI, using a like-for-like methodology across 2.1 million commercial properties. It suggests climate change has already increased annual average damage by 36 percent in Europe and 45 percent in Asia since 1990, and that under current emissions trajectory those impacts will increase up to threefold by 2050. Companies listed on the Nikkei are most exposed, followed by companies listed in Hong Kong, Singapore, France, and the UK.
Assets highly exposed to disruptive events like floods, forest fires, and coastal inundation have been identified in the analysis and are projected to double over the course of the century.
Analysis of productivity losses across eight indices reveals companies listed on the ASX and the Hang Seng are currently most at risk but will be overtaken in the decades to come from the impact of sea level rises for companies listed on the Nikkei and FTSE.
The XDI 1000 ranks more than 1,300 public companies by level of risk across the ASX 200, CAC 40, DAX, FTSE 350, HSI, NI 225, S&P 500 and STI, and quantifies the projected impacts on owned or leased operational assets of each company and its subsidiaries.
XDI CEO Rohan Hamden said the sobering insights offered by the XDI 1000 highlighted the importance of independent and comparable analysis, alongside Climate-related Financial Disclosures (TCFD reporting.).
"We have published the XDI 1000 to show that an objective and globally consistent approach to physical climate risk reporting is possible, which allows a like-for-like comparison for regulators, shareholders and companies," XDI CEO Rohan Hamden said.
"The reality is that many companies are already experiencing losses as a result of extreme weather events caused by climate change.
"We should prepare for these impacts to worsen in all markets but some companies and indices will be harder hit than others."