New York City, June 25, 2009—IFC,
a member of the World Bank Group, and the World Resources Institute (WRI)
today released two reports that highlight environmental risks and opportunities
that are overlooked by investors and companies, but that will impact the
financial performance of companies in India, Indonesia, Malaysia, the Philippines,
Thailand, and Vietnam.
Until recently, these Asian markets have focused largely on environment-related
reputational risk. The reports—“Emerging Risk: Impacts of Key Environmental
Trends in Emerging Asia” and “Undisclosed Risk: Corporate Environmental
and Social Reporting in Emerging Asia” – are being released at a critical
time. The Emerging Risk report highlights the operational, regulatory,
and legal dimensions of environmental risks already flowing through companies’
value chains. For example, recent flooding affected companies in Indonesia
significantly. Two major floods translated into real impacts on the population
and on the country’s largest companies, resulting in declining stock prices
and severe infrastructure degradation.
Euan Marshall, Program Manager of IFC’s Sustainable Investing unit, said,
“The global financial crisis is causing companies and investors to reconsider
the question, “What is risk?” The investment community has begun to value
companies based on how they respond to climate change risks. However, more
needs to be done, and companies and investors need to understand the relevance
of environmental risk in the context of aggregate financial risk.”
Dana Krechowicz, lead author of the reports and an associate at WRI, added,
“Scarcity of water and climate change, among other risks, have and will
increasingly affect the region. Economic impacts will be magnified if companies
and investors are not well prepared.”
The two reports set the stage for a series of sector-specific reports to
be published later this year by IFC, WRI, and HSBC that will identify material
environmental risks and opportunities in the region’s food and beverage,
real estate, and power generation sectors.
The series of reports are sponsored by IFC and WRI, in partnership with
the Japanese government.
Charts, graphs, and other related materials are available at http://www.wri.org/publication/emerging-risks-asia
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $16.2
billion in fiscal 2008, a 34 percent increase over the previous year. For
more information, visit www.ifc.org.
The World Resources Institute (www.wri.org)
is an environmental think tank that goes beyond research to find practical
ways to protect the earth and improve people’s lives.