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Climate Change Mitigation Should Be Viewed As Business Opportunity, Says London Stock Exchange

April 12, 2018 |

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London Stock Exchange Group sustainability manager Sara Lovisolo says the technical work behind the opportunities offered by climate action is weaker than measuring mitigation

Speaking at a Climate Disclosure Standards Board (CDSB) event in London on Monday (9 April), Sara Lovisolo said the economic opportunities offered by sustainable business practices are often overlooked.

“There is a lot of talk about climate risks and negative impacts, but if we want to measure and track the transition to a low-carbon economy, then we also need to measure the opportunities,” Lovisolo said. “It is in the TCFD [Task Force on Climate-related Financial Disclosures] framework, but the technical work behind the opportunities is weaker than measuring mitigation.”

The establishment and subsequent recommendations of the TCFD has led to numerous investors and banking groups beginning to view their portfolios through the lens of potential climate change impacts. Scenario analysis encourages businesses to create a “well-established method for developing strategic plans that are more flexible or robust to a range of future states”. Through the analysis, businesses can evaluate a range of climate-related scenarios, including a 2C scenario to explore physical, strategic and financial risks and opportunities that could emerge.

Lovisolo believes that this new financial framework offers an opportunity for businesses to “harmonise” how companies report on financial and climate-related information. She called on corporates to translate the opportunities of the low-carbon transition into “technical” data that investors can understand and act on…”

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