New markets are emerging to help companies cope with climate change risks.
To say that Jack MacDonald’s company sells hot air would be wrong. In fact, EcoSecurities, where MacDonald is CFO, sells the absence of hot air.
The Dublin-based, London-listed firm is one of many companies which develop projects to cut greenhouse gases in China, India and other developing countries, generating emission-reduction credits that companies in Europe can use to offset their obligations under the EU’s CO2 cap-and-trade scheme. The trade in developing-world credits will be worth €4.6 billion this year, double the total two years ago, according to consultancy Point Carbon.
In February, the Intergovernmental Panel on Climate Change, a group of scientists and government officials gathered by the UN, issued the fourth of a series of much-anticipated reports on global warming. The panel concluded that human activity is exacerbating climate change, leading to more frequent heat waves, heavy precipitation and severe tropical cyclones. In reponse, a host of new markets are emerging for financial instruments to help companies offset their emissions, bolster operations against increasingly capricious weather, or simply burnish their green credentials. What follows is CFO Europe’s forecast of the key developments for climate-conscious finance chiefs.
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