SWITZERLAND – Climate change will have a significant impact on energy companies and their major industrial customers, which will be reflected in asset prices, says Carlos Joly, a UN Environment Programme (UNEP) spokesperson.

Joly was referring to report published by the Finance Initiative of the UNEP, which says climate change poses a strong risk to the global economy and too few financial operations, including banks and pension funds, are taking the risks seriously.

“It will be very important for managers to decide which companies are most at risk and how it could impact their cash flow -- what kind of long- and short-term action to adapt,” he says.

Joly, who chairs the UNEP insurance industry initiave, added that much will depend on how the Kyoto Protocol, which limits emissions of greenhouse gases, is enforced and implemented.

The report says losses as a result of natural disasters appear to be doubling every decade and have reached $1trn in the last 15 years. It also warned that annual losses could reach nearly $150bn if current trends continue.

On a positive note, Joly says there is increasing awareness and recognition of the problem due to the fact that many large institutional investors participated in the study.