Flooding, droughts, rising sea levels and extreme weather events are posing increased risks not only for companies but for investors, financial markets and the global economy. Two-thirds of large companies around the world have at least one asset at high risk because of the physical hazards created by a warming climate.1 It is essential that financial markets plan for the physical risks of climate change.

Where a company operates is a major factor in its exposure to physical risks. While companies often provide general geographic information about the locations of their assets, such as states, regions or countries, that is not specific enough. Investors need much more precise physical location data from companies to help make sound long-term financial decisions.

In late 2020, Impax teamed up with the New York State Common Retirement Fund to ask listed US companies in the S&P 500 Index to voluntarily disclose the locations of their significant assets, including facilities, buildings and installations whose loss or impairment would impact financial results.2

We received responses from 13% of the companies. Only three demonstrated to us that they had seriously considered their liabilities due to physical climate risk and had plans for adapting to or mitigating those risks.

What we asked S&P 500 companies:

Where are the facilities whose loss or damage might be a material event?

Response Rate of the S&P 500 to Physical Risk Letter, by Sector
Number of S&P 500 Respondents, by Type of Response

While it was encouraging to learn that at least a few companies have given physical risk much thought, these responses illustrate how unprepared most companies are for the effects of climate change. We believe that our engagements will help put this topic on the agenda for boards and executives.

In our report ”Physical Climate Risk and the S&P 500,” we explain our engagement and detail the responses by sector, how executive suites are thinking about physical climate risk, and what we’ve concluded about companies’ preparedness for the physical risks of climate change.

The authors would like to acknowledge Eri Yamaguchi, ESG Investment Officer at New York State Common Retirement Fund, whose insights have been essential to this engagement.


1 S&P Global, “Physical Risks,” www.spglobal.com/esg/education/essential-sustainability/climate/physical-risks?gclid=CjwKCAjwr56IBhAvEiwA1fuqGiu-wj6EseQ3n-k4VGkGyNA2oyLUmhEROMk3eZJge1jyD1gCKrtnXBoCs8cQAvD_BwE. Accessed Sept. 15, 2021.

2 Impax does not own shares in all the companies in the S&P 500 Index.

The S&P 500 Index is an unmanaged index of large capitalization common stocks.

Julie Gorte, Ph.D.

Senior Vice President for Sustainable Investing

Julie Gorte is Senior Vice President for Sustainable Investing at Impax Asset Management LLC, the North American division of Impax Asset Management Group and investment adviser to Pax World Funds.

She oversees environmental, social and governance-related research on prospective and current investments as well as the firm’s shareholder engagement and public policy advocacy. Julie is also a member of the Impax Gender Analytics team.

Prior to joining the firm, Julie served as Vice President and Chief Social Investment Strategist at Calvert. Her experience before she joined the investment world in 1999 includes a various number of roles. Julie spent nearly 14 years as Senior Associate and Project Director at the Congressional Office of Technology Assessment. Additionally, she has held the roles of Vice President for Economic and Environmental Research at The Wilderness Society, and Program Manager for Technology Programs in the Environmental Protection Agency’s policy office and Senior Associate at the Northeast-Midwest Institute.

Julie serves on the boards of the Endangered Species Coalition, E4theFuture, Clean Production Action and is the board chair of the Sustainable Investments Institute.

Julie received a Ph.D. and Master of Science in resource economics from Michigan State University and a Bachelor of Science in forest management at Northern Arizona University.

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Matthew Wright

Research Analyst

Matthew is an analyst, specializing in research into physical climate risk and engagement on the theme of climate, with a focus on carbon emissions and water impact reporting. He researches stocks globally, with a broad focus on the water value chain. During his time at Impax, he has also worked on the development of a model that assesses physical climate risk exposure for each investment.

Matthew earned a Master’s degree in Environmental Technology with a focus on Environmental Economics and Policy, and a Bachelor’s degree in Geophysics from Imperial College London. His previous experience includes founding a startup focused on financial climate risk and working as a Business Analyst.

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