We've all seen the data at this point. Companies that do better at "Environmental, Social, and Governance (ESG)" do better financially. Case closed.
We can try to figure out why: is it just that companies managing ESG better are managing everything better? Or is it that there are real risks being avoided and real opportunities being seized in ESG world?
No matter what the reason, ESG is good for business. So good, in fact, that big money - like SwissRe's half trillion dollar investment portfolio - is shifting toalign their investments with ESG indices.
But where does climate fit into this? ESG is so broad that sometimes climate gets lumped in with all kinds of other environmental issues, from pollution to toxics to water quality. As a result, the financial impacts of climate are often overlooked, because they're just one piece of a big jigsaw puzzle.
The other reason the financial impacts are overlooked is that they're hard to measure. It's a highly complex system with many feedbacks and interactions, requiring petabytes of data, thousands of transfer functions, and sophisticated business knowledge. The climate community simply hasn't given corporations and investors the right tools.