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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


31


− “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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