Concerned that many companies are “woefully unprepared” for the effects of climate change, Standard & Poors is introducing a stress test to assess the financial losses a company, city, or region could expect as a result of severe weather.
S&P announced the initiative during the U.N. Climate Summit in New York last month, Chestney writes.
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“Even the reinsurance sector will possibly be under-capitalized to absorb the risk. But they are still in a better position than the corporate world,” said Michael Wilkins, S&P’s Managing Director of Infrastructure Finance Ratings. “Any corporate which has manufacturing plants and equipment in exposed areas is vulnerable, especially those close to coastal areas, where rising sea levels or storm surges could cause a dramatic impact.”
