Global asset manager Schroders has collaborated with Cornell University’s Global Labor Institute (GLI) to publish a stewardship framework on climate risk resilience and adaptation, aiming to support engagement with companies. The toolkit outlines areas in which investors can constructively engage with exposed companies, helping to understand the risks they face and to encourage action to strengthen firms’ resilience to the impacts of physical climate change. “Extreme weather caused by climate change poses financially material risks for many brands and sectors,” said Katie Frame, Active Ownership Manager at Schroders. “As a result of climate change, we expect to see an increased impact on investment returns and client outcomes, specifically through increased revenue losses and stranded asset risk. Despite a changing global regulatory landscape, these risks should move companies towards building supply chains that are adaptive, resilient and sustainable in the long-term.” Previous analysis by the two parties found four countries central to apparel production risk losing US$65 billion in export earnings between now and 2030 due to extreme heat and flooding. Despite this, climate resilience planning is typically overshadowed by climate mitigation. Schroders has already begun applying the toolkit for its engagement with apparel brands and plans to expand its application to other exposed sectors, including food and construction, to support investment performance and the resilience of clients’ portfolios.
