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Central banks warn of the climate change threat.

The European Central Bank has quantified the effects climate change will have on European businesses and banks. Fires, floods, and rising sea levels have been accounted for to determine how the financial system will deal with climate change.

Fishing businesses have to account for rising sea levels potentially wiping out their processing centres, forestry-related businesses face the threat of wildfires destroying their revenue sources and banks have exposure to all threats from the loans on their books. The French and Spanish coasts were found to be most vulnerable.

At the very least, banks servicing at-risk businesses will need to increase their capital reserves. With that, the cost of accessing capital rises, growth is hampered and the world works hard to balance growth and a sound financial system. Unless of course, the risk of climate change can be abated.

Companies like Netflix are aware of the risk to business, even if framed as an altruistic venture. Over the last week, Netflix announced their path to carbon neutrality. It’s a long journey given they currently emit the CO2 equivalent of 240,000 cars annually.

To start, production will be localised to avoid long-distance travel. Equipment will be made more efficient as well as powered by renewable energy rather than fossil fuels. For example, set lighting will transition to LED rather than incandescent.

The next decade will prove if it’s good acting or the truth.

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