Efforts to mitigate and adapt to climate change, as well as the market and technological shifts related to those efforts, also produce vast business opportunities.
Companies relying on carbon intense assets (such as the mining industry, transportation or construction companies) can seek green financing – funds intended to finance projects and initiatives that support sustainable development. This includes projects aimed at addressing the issue of climate risk and GHG emissions. Such projects include, but are not limited to, shifting to renewable energy (energy sector), development of green technologies like energy storage or carbon capture, refurbishment of building (construction industry) or vehicle electrification (transport industry). A full overview of the climate-related opportunities, based on the TCFD Recommendations, is presented below.
There is a plethora of climate funds, which vary by type (multilateral, bilateral, private), covered geography, sector, financing mechanism and criteria of applying. The board has to remember, that the choice of appropriate financial instruments will be dependent on the specific situation of the company, its exposure to climate risks, carbon intensity of its assets and financial availability. The companies operating in the emerging markets will find lesser opportunities than countries operating within the EU common market. It also has to ensure that the company meets funding criteria – which includes integrating climate change into core business activity and other specific criteria.
A full overview of the financial impact of climate-related risks and opportunities on the company’s financial position is as follows.