III. Results
Table 6: Risk & opportunities perceived by companies sensitive to carbon costs Risks
Consumer Discretionary
− Increasing cost of energy supply − Discrepancy between national regulations may increase risk (e.g. Carbon Leakage)
− Damage to production sites due to changes in precipitation, temperature, etc.
− Changing consumer demand: demand for more environmentally friendly and energy efficient products
Energy
− Air pollution limits could turn into loss of competitiveness with extra-EU competitors charac- terized by milder regulations or no regulations at all
− Risk related to uncertainty post-Kyoto − Internationally binding agreements increase operational and capital costs
− Sea level rise can present a serious risk for offshore facilities but also for plants built on coasts
− Reduced demand for electricity due to energy efficiency plans
Financial
− Increasing operational costs due to rising energy costs and enhanced energy efficiency requirements for building renovations
− Clients and suppliers may face financial, reputational, competitiveness, regulatory & litigation risks
− Physical risks from climate change may affect the creditworthiness of clients
− Financial institutions may face criticism from stake- holders if they do not have policies or programs in place to address their own contribution to climate change
− Extreme weather events could affect operations through damage to office buildings and infrastructure
Industrials
− Internalization of costs of compliance to regulation could push prices higher and affect demand
− Temperature variability can have effects on installation of equipment
Materials
− The uncertainty surrounding new regulation is affecting long term decisions and is a deterrent to investors
− Tax on imported raw materials on the basis of their carbon intensity
− More frequent occurrence of extreme precipitation poses a risk to transportation and supply chains
Telecommunication Services
− Increasing operational costs due to requirements for equipment upgrading and rising energy costs
− Network infrastructures and data centers in certain areas might be subject to flooding risks
− Environmental taxes, white\green certificates,uncer- tainty on CDM market development post 2012 might increase the complexity of the business context
− Changes in temperature increase operational costs and affect hydro and thermoelectric production
Utilities
− Fluctuating socio-economic conditions make it very difficult to analyze market signals and forecast future scenarios
− More stringent obligations on CO2 emission reduction open up new opportunities for CDM market
− Exploitation of new business − Development of innovative technologies − Increased demand for electricity, gas and heat
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− “Smart” infrastructure-related business opportunities − Product and service innovation
− Reduction of operating costs due to energy efficiency − New products to promote energy efficiency in buildings
− CDM offers a cost effective way of reducing emissions without losing competitiveness
− Product and service innovation − Development of renewable energy market
− Interest in climate change generates opportunities such as implementing green businesses, developing new clean technologies and exporting more sustainable technologies to developing countries
− Emission trading could create new opportunities for companies that are able to keep their emissions within allowances assigned by national competent authority
− Increased demand for electricity, gas and heat − Activities to tackle climate change can generate opportunities to enhance reputation
− Energy saving in operations − New market for banking products in renewable energy and energy efficiency
− Higher demand for insurance products due to uncertainty and increased need for physical asset protection from phenomena caused by global warming
− Insurance for new technology products − Being environmentally pro-active can build/reinforce trust among stakeholders
Opportunities
− Reduction of operating costs due to energy efficiency − Product and service innovation − Increase in “green performance” sales due to changing consumer demand
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