By Bilal Hafeez 24-09-2019

Climate Change and Corporates: Past the Tipping Point with Customers and Stock Markets (Podzept – with Deutsche Bank Research, 13 min listen)

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(You can listen to the podcast by clicking here)

In this episode, Deutsche Bank used artificial intelligence to detect whether being environmentally aware affects a company’s financial performances. It turned out that over the last 12 years, MSCI World Index companies that experienced more positive climate change news published about them outperformed the index average. Furthermore, investors, it seems, are more conscious of bad climate change news when markets are growing, but less so when they’re falling. Additionally, technology and consumer staples were more vulnerable to this ‘environmental factor’ than the power and utility sectors. According to another survey on consumers, more people recognised their personal responsibilities in regard to climate change and those who prioritise cost and those who prioritise quality are equally likely to take climate changes into account when purchasing. Finally, DB argued that environmental issues would remain in public minds for longer, so it was critical for companies to display their environmental awareness to different demographics.

Why does this matter? With Greta Thunberg kicking up a storm at the UN climate change summit, this timely podcast shows how markets may reward greater sensitivity to the subject .Also, there is more evidence that  consumers are increasingly aware of the ecologic consequences of their purchases.

 

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