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BMT's Greg Fisk recently spoke with James McMahon, CEO of The Climate Service (TCS), a U.S based climate analytics company, about the uptake of climate considerations by the financial sector.

4 December 2019

Water and Environment

The Climate Service

Reflecting on a marked increase in interest by corporate customers in understanding financial risk associated with future climate, James recently posted an article on his LinkedIn feed, published in the New York Times in June 2019 with the headline, ‘Companies See Climate Change Hitting Their Bottom Lines in the Next 5 Years.’

The article noted that, ‘Under pressure from shareholders and regulators, companies are increasingly disclosing the specific financial impacts they could face as the planet warms, such as extreme weather that could disrupt their supply chains or stricter climate regulations that could hurt the value of coal, oil and gas investments. Early estimates suggest that trillions of dollars may ultimately be at stake.’

James noted that the team at TCS work with their customers, ‘to understand how big their potential risks are, using our analytics software to fully quantify financial risks and undertake scenario planning.’ He adds that, ‘There’s a pervasive myth that climate change is a systemic risk. While there are some systemic components, it’s also completely possible to diversify out of the risk - across sectors, within a sector, and even within a company. You just have to have the foundational financial risk analytics to do it.’

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About author:

James McMahon, - CEO of The Climate Service

James founded TCS with the vision that every financial decision on Earth should incorporate climate change. The company’s risk analytics software as a service gives investors and corporate managers the financial information they need to incorporate climate-related risk into their decisions.

This text was originally published on Focus Issue 2, 2019

 

 

 

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