The effects of weather events on corporate earnings are gathering force

With climate change and severe weather events increasingly making headlines, lenders and institutional investors are becoming more interested in how these events are hitting the bottom lines of companies around the world. To answer this question, S&P Global Ratings collaborated with Bermuda-based climate risk management specialist Resilience Economics to determine the prevalence and materiality of climate risk for companies in the S&P 500 index.

This report examines public corporate research updates and earnings call transcripts from April 2017 to April 2018 (financial year 2017) to identify where a particular weather event had a material impact on earnings. This research complements the environmental and climate look-back analysis "How Environmental And Climate Risks And Opportunities Factor Into Global Corporate Ratings—An Update," published Nov. 9, 2017. Climate change will continue to increase the incidence and severity of both chronic and acute weather events, which could lead to a more material impact on companies' earnings. This report excludes the entire financial institutions sector, which includes insurance companies.