September 23, 2008

Emissions Reductions Could Increase Company Value By 80%

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Emissions reductions will create business opportunities and risks, and companies’ futures will depend on how well prepared they are for the move, according to a new report by the Carbon Trust, “Climate Change: a business revolution?” Forward thinking businesses could increase company value by up to 80 percent. Poorly positioned and laggard companies run the greatest risk of destroying value.

Overall, tackling climate change can have a significant impact on company value in six sectors worth a total of $7 trillion. The research also found that as much as 65 percent of company value was at risk in some sectors.

The study recommends that strategic investors should discriminate between sectors and companies on the basis of their opportunities and risks. Businesses should incorporate climate change in their core strategy and investment decisions. Policy makers should work with business and investors to create a policy framework which rewards early action and an efficient transition to a low carbon economy.

Although the research suggests that there are business opportunities in tackling climate change, business organizations in Australia, Germany and the U.S. are criticizing CO2 emissions plans, saying that such regulations could hamper economic development.

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