Bloomberg says investors pricing in climate risk

US billionaire Michael Bloomberg talks to Paris Mayor Anne Hidalgo during a working session for "Action Day" at the CO
US billionaire Michael Bloomberg talks to Paris Mayor Anne Hidalgo during a working session for "Action Day" at the COP21 United Nations conference on climate change in Le Bourget, on December 5, 2015

Global investors are increasingly pricing in the risk of climate change, US billionaire Michael Bloomberg told AFP on Saturday after taking charge of a task force to bring greater clarity to the financial implications of a warming world.

Climate experts warn of huge consequences for the world's economy if humanity fails to curb emissions of climate-altering carbon gases, tipping Earth towards a future of rising seas, floods, storms and droughts.

Speaking on the sidelines of UN climate-saving talks in Paris, Bloomberg said investors were very much aware of the financial implications and were reacting.

"They understand a lot more than people realise," the former New York mayor said, pointing to a proliferation of issuances of "green bonds", created to finance projects with a positive impact on the environment or climate.

"The pension funds are starting to be much more activist in deciding what industries they will invest in and only investing in companies that are environmentally responsive."

Bloomberg was named Friday as chairman of a task force that will draw up international guidelines for companies to follow in disclosing to investors their exposure to climate risks.

The Switzerland-based Financial Stability Board, a watchdog set up to avert a repeat of the 2008 financial crisis sparked by the Lehman Brothers collapse, launched the on the sidelines of the Paris conference, which is seeking a global accord to brake emissions of greenhouse gases.

"The more information you have the better the decisions you can make," Bloomberg said, adding investors had "not totally" taken climate risks into account yet.

"We will wait and see what the market place and the customers want to do and what the owners do.

"But at least giving people information on a comparable basis reasonably accurately, reasonably quickly, lets people then make informed decisions."

Power of the markets

Bloomberg said he firmly believed businesses would act to the growing threat of global warming, and not have to wait for government guidance or rules.

"Unless you are prepared to believe governments should dictate everything I think we should let the market place do an awful lot of this stuff," he said.

Companies and individuals can be very innovative, Bloomberg argued.

"We solve insolvable problems all the time. Philip Morris banned smoking in their offices—they sell tobacco. Exxon Mobil I think has really been a leader in trying to diversify," he added.

"So those companies are trying to adapt. The world does not end."


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Michael Bloomberg leads global push on corporate climate risks

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User comments

Dec 06, 2015
There may be no Deniers in the insurance industry.

Dec 06, 2015
No deniers on the end of a fire hose either.

Dec 06, 2015
Because if there's one thing the market has never once done, it is make people die as slowly as possible so as to maximize profiting from their death. There is no way the market is more interested in profiting from climate change disaster than stopping it, because never have the military or medical industries done that and never has it been recorded that any human has done that in the past for any reason. We're saved.

I may be a tad sarcastic there.

Dec 06, 2015
Global investors are increasingly pricing in the risk of climate change said US billionaire Michael Bloomberg, The Denier goon squad must be popping brains everywhere from their exploding heads.


Dec 07, 2015
Because if there's one thing the market has never once done, it is make people die as slowly as possible so as to maximize profiting from their death. There is no way the market is more interested in profiting from climate change disaster than stopping it, because never have the military or medical industries done that and never has it been recorded that any human has done that in the past for any reason. We're saved.

I may be a tad sarcastic there.

Corporations make decisions based on profit and shareholder value.

If their spread sheets now include a scenario for what happens to those profits when the human population goes to zero, love to hear the outcome.

Until they price that in, we don't know what the cost of carbon is.

Dec 07, 2015
Corporations make decisions based on profit and shareholder value.

..and they are coming to realize that effects due to climate change have to be mitigated. Someone has to pay for keeping rising tides at bay. Someone has to pay for large numbers of refugees coming from dought stricken areas. Someone will have to pay for the wars being fought over water resources.
And when it all comes down to it that pay will be in form of taxes. And taxes mean:
a) less money in the average Joe's pockets to buy their products or eveb
b) higher taxes on the companies themselves

Either of which will affect profit and shareholder value negatively.

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