Jonathan Lash and Fred Wellington offered a guide to companies on how to create a competitive advantage in a warming world. Investors at the same time would like to understand which companies will be competitive. To fill this gap, RepuTex has developed what it hails as a world first climate change index based on ASX300 companies.
The backgrounder provided by the company suggests that :
“The onset of climate change presents a series of unprecedented challenges as well as opportunities for all companies in the world, including Australia. This emerging climate change-influenced economy means investors are faced with the complexity of understanding the risks and opportunities for growth and factoring them into their investment decisions.
RepuTex Carbon Series enables the investment community to better anticipate the risks and opportunities presented by climate change on company earnings and integrate these developments into informed investment decisions.”
RepuTex uses methods suggested by Lash and Wellington and goes beyond using what they call the “value chain database” – which quantifies the energy intensity of each component of a company’s operations. This approach enables RepuTex analysts to measure the impact of key risks and exposures across the entire value chain, and assess correlation with management capacity.
The following snapshot provides a view of what is covered in the analysis. Some 45 companies are part of the index now and it will be live in June.