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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.
About IFC
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
.
About WRI
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.
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