Report says small companies need to better assess risk from climate change

Small companies are inadequately assessing business risks and opportunities from climate change, according to a new report by Pax World Management, a sustainable investment advisor and Clean Air-Cool Planet, an advocacy group.

While larger businesses are beginning to assess risks from climate change, the report notes that small companies rarely report on any climate risk that could affect their bottom line, and those they do tend to only look at regulatory risk – not risk from water scarcity, distribution problems because of more frequent and severe weather disruptions or sea level rise.

The report, called Risk and Opportunity in a Low-Carbon Business Climate: Small & Mid-Caps and Climate Change, makes several recommendations: Industry trade groups need to develop reporting guidelines for small companies; asset managers and investment counselors should highlight investment advantages of incorporating climate risk in businesses portfolios and have investment organizations and business groups offer guidance to smaller companies.

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