What will happen to the economic fabric of our society as the effects of a warming climate unfold? Deutsche Bank has developed a set of tools to enable it to identify the risks to the trillion dollars worth of investments it currently manages.
Deutsche Bank maps climate change risks for investments
Deutsche Bank has developed a tool to forecast where its investments across the globe may be impacted by natural disasters brought on by climate change.
Although tools have existed in the insurance industry to model the impact of climate change, this is the first time this sort of data has been systematically applied to investments.
Deutsche Asset Management created the map with climate change intelligence firm Four Twenty Seven, covering more than one million individual locations in order to see how changes to climate will threaten its investment portfolios. The group currently has about €711 billion ($1.06 trillion) under management.
Economic modelling estimates that if carbon emissions aren't reduced throughout this century, per capita GDP will decrease by 23 per cent from what it otherwise would be.
"The effects of climate change will be ubiquitous but uneven, ranging from those that disrupt daily life, such as damaged or flooded infrastructure, to more gradual impacts like declines in labour productivity and widespread threats to global welfare through decreased crop yields," Four Twenty Seven stated.
Deutsche Bank said the development of this tool meant that exposure to catastrophic events for individual companies can now be calculated.
"It tackles physical risk head-on, giving credible insight into the vulnerability of corporate production and retail sites to climate change. Factors such as sea level rise, droughts, flooding and cyclones pose an immediate and measurable threat to investment portfolios," Deutsche Bank Asset Management said.
These issues have already been seen in Australia, where heatwaves have caused spikes in power prices, directly impacting business operating costs.
http://www.canberratimes.com.au/bus...ge-risks-for-investments-20171109-gzhsxh.html