World's Largest Asset Manager Warns Clients To Rethink Climate Risk, Esp. Muni Bond, Utility Markets

[hatrack]

BlackRock, the world's biggest asset manager, has urged investors around the world to urgently rethink their assessment of climate risk after research found key industries in the US are vastly underestimating the economic dangers posed by the low carbon transition.

The investment giant, which manages around $6tr of assets worldwide, said it is currently undertaking major work with the help of independent research firm Rhodium to better understand and quantify the risks posed by climate change and the low carbon transition to the global economy. Initial findings from that research were published yesterday, which BlackRock said suggested many US markets - particularly electricity utilities, commercial real estate, and municipal bonds - are consistently under-pricing physical climate change risks to their business.

"Our early findings suggest investors must rethink their assessment of vulnerabilities," the BlackRock Investment Institute report states. "Weather events such as hurricanes and wildfires are underpriced in financial assets, including US utility equities. A rising share of municipal bond issuance is set to come from regions facing climate-related economic losses. And many high-risk commercial properties are outside official flood zones."

It comes in the wake of a number of major climate risk alarm bells. The World Economic Forum named extreme weather the most pressing threat facing the global economy in 2019, while the UN has warned of major risks to food security, and US power utility PG&E filed for bankruptcy after incurring major losses during devastating California wildfires late last year.

EDIT

https://www.businessgreen.com/bg/news-analysis/3073716/get-ahead-of-these-risks-blackrock-issues-climate-risk-warning-to-investors

[SWBTATTReg]

1. I would suspect most companies are already (or should be) aware of climate issues and ...

have already (or should be) planning on handling climate change issues, i.e., make products more weather proof, shelter products in more secure environments, move or migrate assets to more secure footings/locations, e.g., WIFI facilities to higher ground, etc.

If a company isn't starting to address issues such as this (climate change), then I think they put themselves in peril, where 1 major environmental event can be a major disaster for a business (manmade environmental disaster the Deepwater Horizon oil spill, one of most expensive disasters ever).