"Long-term risks from climate change now outweigh those from cyberattacks, pandemics, geopolitical conflict and weapons of mass destruction, decision-makers say. [...] From wildfires in Australia, Brazil and California to worsening storms, floods and droughts, "all key indicators point that this is a situation that's bad and it's getting worse," said John Drzik, chairman of Marsh & McLennan Insights, a global risk, insurance and professional services firm. [...] For instance, 370 investors managing $40 trillion in assets have now pledged to make their investments climate friendly."
"Peter Giger, chief risk officer for the Zurich Insurance Group, warned that "the longer we wait (to tackle climate change), the more painful the transition will be" because of the rapid plunge in emissions that delay would necessitate.
He pointed to the rapid disappearance of insect species around the world, including those that pollinate 75% of the world's crops, as a result of climate change and other pressures. If insects and the pollination services they provide disappear, "that's a catastrophic outcome" for food security and for business, Giger said. The breakdown of planetary systems has "true costs", he added."
Climate change will reshape markets, McKinsey warns (Financial Times)
"By 2030, all of the 105 countries assessed by McKinsey — which represent 90 per cent of global GDP — were likely to suffer from physical changes such as increased water stress, flooding or a greater number of people exposed to extreme heat, it said."
"The insurance sector is particularly vulnerable, according to the report. Insurers’ current cash reserves may be insufficient to account for future losses and they may not be able to raise premiums enough to cover the gap, McKinsey said. Given the importance of insurance in rebuilding after disasters, this mismatch could send shockwaves through the system.
"Supply chains and the locations of property development might also need to be rethought. The frequency of hurricanes threatening semiconductor manufacturers is projected to grow as much as fourfold by 2040, McKinsey said. “For unprepared downstream players . . . the revenue loss in a disaster year could be as high as 35 per cent,” the report states."
“The evidence on climate risk is compelling investors to reassess core assumptions about modern finance,” says Fink in his letter, recognizing that it “has become a defining factor in companies’ long-term prospects.” In his view, all governments, companies and shareholders must take climate change into account.