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Interview with Kristy Duane

Q:  Do you see your clients actively engaged in considering the impact of climate risks on their business?

It very much depends on the nature of the business. Those that are making a positive impact (such as renewables businesses) are actively engaged because their stats are good and they want to publicise them. Those that have less of an impact are engaging with it but the active engagement is quite recent and not necessarily well understood across the business.  

Q: What do you think is driving the engagement? For example, do you see corporate clients being engaged by their shareholders, investors, banks, insurers or customers on the topic of their position on climate matters?

Insurance is relevant to certain sectors more than others but I would say that each of these are having an impact now and also employees.  

Q:  For those that are actively engaging, how are they responding to their findings son the impact of climate risks on their business or sector? Do they generally consider climate to be a risk to their business, or an opportunity, or a mix?

On the whole it is a risk/cost at this stage. Some are using it as an opportunity to change policies or develop products and services, but it is the preliminary phase for most corporates and there are a limited number of corporates that have identified it as an opportunity, save those that are operating squarely in the climate change adaption/mitigation space such as renewables or energy efficiency. It is now accepted that this is a direction of travel so and that there are opportunities out there but possibly less identified at this stage. 

Q: Are they, for example, looking to restructure their businesses, or signing up to Energy Transition Plans, Net Zero strategies or other decarbonisation agendas in place or under development?

Restructurings tend to be mostly for those in the “dirty industries” where brown is being separated from green (e.g. mining companies). At this stage, most some corporates are still in the exploratory stage of understanding what the various plans are and strategies could be, and how such a plan, commitment or strategy would impact their business/financials but others have started to make good progress in this area 

Q:  How much do you see climate being a driver of M&A activity?

It is certainly driving disposals of dirty industry assets. It is also fuelling demand for clean energy or low emissions assets and other sustainability orientated businesses including tech. 

Q:  Does the rise of the huge dedicated climate and energy transition funds affect the opportunities for corporates?

There is arguably a concern of crowding out but the scale of change/investment that is needed to achieve net zero is so large that it is unlikely that funds will take up all of that and therefore corporates will still be able to invest.

Q:  Are some corporates looking to divest away from sectors (such as conventional coal fired power stations) which are perhaps seen as most at risk?

Yes this is happening. Traditional energy companies recognize they need to balance their energy generation mix and increase the percentage of renewables.

Key contact

Kristy Duane
Partner
Co-Head of the CMS Infrastructure & Projects Group
London
T +44 20 7524 6568
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