Fun little UN report out, might get some airplay tomorrow.
Environmental costs are becoming increasingly financially
material. Annual environmental costs from global human
activity amounted to US$ 6.6 trillion in 2008, equivalent to
11% of GDP. Assuming a ‘business as usual’ scenario, global
environmental costs are projected to reach US$ 28.6 trillion,
equivalent to 18% of GDP in 2050.
The companies that constitute large, diversified equity
portfolios cause global externalities that undermine the
environment’s ability to support the economy. The top 3,000
public companies cause over US$ 2.15 trillion or one-third
of global environmental costs. In a hypothetical investor
equity portfolio weighted according to the MSCI All Country
World Index, externalities could equate to over 50% of the
companies’ combined earnings.
$4.5 trillion of that is greenhouse gases, $1.2 trillion is \”water abstraction\” and the rest, well, there isn\’t really much \”rest\” is there?
And we already know what to do about those two: price carbon properly and price water properly.