Extreme temperatures and weather events are already a reality, and Spain is one of the economies most vulnerable to climate change within the European Union. The transition to a sustainable system depends on family businesses, which make up 89% of the country’s business community and 57.1% of private sector GDP, but it won’t be cheap. invoice undertake sustainable transformation family businesses It will increase to approximately 140 billion euros by 2030That’s according to estimates from consulting firm Valora. Only 36% have taken initiatives to combat climate change, despite suffering from the effects of climate change in their operations and accounts.
These are the conclusions of the report ‘Family business and sustainable financing: time to step up’, prepared by researchers Daniel Domínguez, Fernando Liz and Renata Fernández, which highlights the unpreparedness of Spanish companies in the face of climate change. “Companies are among the least likely to take action to mitigate identified threats, ahead of Irish and Hungarian companies within the EU,” the authors write. This statement contradicts the business community’s awareness of this issue: Nearly 80% think climate change has an impact in terms of physical risk in countries such as Lithuania or Denmark, where own business is above the European average and 50 percent.
little preparation extends to the financial level. Climate risk resilience reviews conducted by the European Central Bank (ECB) in 2022 revealed that 60 percent of commercial banks in the Monetary Union still do not have a climate risk stress testing framework. Only 20% of them take this into account as a variable when granting loans. Most financial institutions plan to include physical and/or transitional climate risk in their testing frameworks, but only in the medium term.
ESG investing
What’s wrong if, according to data collected by the European Investment Bank, Spanish companies are among those investing the least in reducing greenhouse gas emissions? According to the Valora report, this is because “ lack of resources and incentivesIn addition to the lack customer request“. Another factor is the difficulty of accessing the technologies required to achieve sustainable transformation. And the ability of a small company to adapt to these challenges is not the same as that of a large firm. Even so, the authors of the report focus on the issue. Regarding investment: A large part of it is focused on the effects of climate change He is leaving not to adapt, but to protect the company’s operations against climate change.
One of the most important focal points of the elements that aim to accelerate the sustainability of companies is energy. Spanish companies are active At the top of the list of European countries a larger portion of your investments Aims to increase your energy efficiency (% fifteen). According to the 2023 National Integrated Energy and Climate Plan (PNIEC), national companies must invest approximately 250 billion euros by 2030, primarily in renewable energies and energy efficiency.
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However, when energy saving measures are taken into consideration, a gap opens up in other issues. While Gartner’s forecasts suggest more than $3 trillion (30% of the total) will be issued globally in bonds linked to ESG initiatives, the reality is that 26% of companies questioned by CEOE admit they don’t know exactly what the investment will be. On these issues, 34% state that these investments will not exceed 1% of their turnover, while 8% state that they do not have any planned investments on ESG or sustainability issues for this year. According to Valora research, 90% of Spanish family businesses They admit they should Increase your ESG investments In the current decade, banks are also starting to integrate these factors into their credit risk models.
Greater investment flows and the reinforcement of sustainability as a strategic factor that will increase the profitability of companies lead us to the following expectation: There will be big trends in this field. The authors of the report point out that products that comply with ESG criteria are increasingly being developed and that products with social criteria, circularity and natural capital are increasing in the financial field. Moreover, tracking the results of your investments will be more necessary than ever; Therefore, Valora expects an explosion in ESG data intelligence, such as reporting or value creation, as well as the joint integration of financial and non-financial metrics. to manage. Finally, there will be greater consortia and cluster structuring around immature ESG technologies that will help reduce business risk for investors.