\u00a0<\/p>\n
PARIS, Aug 16\u00a0\u2014\u00a0The heatwaves pummelling Europe this summer will have costly impacts on industries ranging from agriculture to tourism\u2014but that hasn\u2019t stopped stock markets from hitting all-time highs.<\/p>\n
For investors enthralled by soaring corporate profits, headlines about the painful consequences from climate change are largely just background noise, experts say.<\/p>\n
\u201cThe earnings season has been so strong, and the number one worry in terms of inflation being the situation in Iran, that global warming is really second order,\u201d said Florian Ielpo, head of macroeconomic research at the Swiss bank Lombard Odier.<\/p>\n
In theory, markets are constantly pricing in expectations for everything from interest rates to technology advances. In practice, prospects of hotter weather disrupting wide swathes of everyday life are not pulling stock prices back to Earth.<\/p>\n
The Paris, Frankfurt, Madrid and Milan exchanges all hit records in August, in line with recent all-time highs for Wall Street\u2019s key indexes.<\/p>\n
\u201cEven though Europe\u2019s problems have only gotten worse with this summer\u2019s abnormally hot temperatures, drying rivers and further disrupting transport within the continent, earnings expectations for Stoxx 600 companies keep rising!\u201d Ipek Ozkardeskaya, senior analyst at Swissquote, wrote in a research note this week.<\/p>\n
Even if climate change does not pose an immediate risk, the threat is likely to gradually move centre-stage over the next 10 to 15 years, Ozkardeskaya explained to AFP.<\/p>\n
\u201cThe biggest risk for European equities is potentially stagflationary: climate change could simultaneously weaken productivity and growth, at the same time pushing food, energy, insurance costs, infrastructure spending and ultimately inflation structurally higher,\u201d she said.<\/p>\n
Among the most vulnerable sectors, she cited agriculture and heavy industry as they deal with water scarcity and higher input prices, as well as insurance if firms face higher claims.<\/p>\n
Inclined to short-sightedness<\/strong><\/p>\n France\u2019s Environment Minister Monique Barbut said this month that the fierce heatwaves this summer would cost 10 to 15 billion euros.<\/p>\n The heat is threatening harvests across the Continent, raising the spectre of soaring food prices.<\/p>\n And in Germany, steel giant Thyssenkrupp warned that record-low levels on the Rhine were threatening raw material deliveries, echoing industry warnings that the waterway could soon become unnavigable.<\/p>\n But that didn\u2019t stop its shares from surging nearly 10 per cent on Thursday, as investors focussed on its profit outlook.<\/p>\n \u201cFinancial markets are inclined to short-sightedness,\u201d analysts at Metzler Asset Management in Germany said in a note.<\/p>\n \u201cThey usually incorporate risks that are two to three years on the horizon. But climate risks… do not fit with these market cycles,\u201d they said.<\/p>\n For John Plassard, head of investment strategy at Cite Gestion in Geneva, stock punters are in \u201ctotal denial\u201d.<\/p>\n \u201cNo matter the sector\u2014technology, pharmaceuticals…\u2014companies today are not talking about heatwaves,\u201d he told AFP.<\/p>\n Global warming is also expected to upend decades of business as usual in the tourism and property sectors.<\/p>\n \u201cThere could be \u201ca shift in tourism and real estate, from southern Europe to cooler northern destinations\u201d, Ozkardeskaya said.<\/p>\n Some investment managers say clients have indeed taken note, pointing to the growing awareness of so-called Environment, Social and Governance (ESG) funds.<\/p>\n \u201cWe are seeing an increased use of sustainable funds in recent years,\u201d said Axel Hartmann, a spokesman for BNP Paribas Personal Investors in Germany.<\/p>\n Metzler also says it has noted \u201ca distinct demand for investment themes linked to electrification, decarbonisation and independence from fossil fuels\u201d.<\/p>\n But \u201cfor all sectors and regions overall, we have not yet seen any structural buying shift that would benefit the most advanced companies\u201d in these areas. \u2014 AFP<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"\u00a0 PARIS, Aug 16\u00a0\u2014\u00a0The heatwaves pummelling Europe this summer will have costly impacts on industries ranging from agriculture…\n","protected":false},"author":2,"featured_media":1150891,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[5174],"tags":[2000,299,5187,312964,312965,1411,312963,312962,47732],"class_list":["post-1150890","post","type-post","status-publish","format-standard","has-post-thumbnail","category-eu","tag-eu","tag-europe","tag-european","tag-florian-ielpo","tag-ipek-ozkardeskaya","tag-paris","tag-paul-cassedanne","tag-samir-tounsi","tag-thyssenkrupp-ag"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/117102261480224542","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1150890","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=1150890"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1150890\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/1150891"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=1150890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=1150890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=1150890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}