A report by investment research and ratings firm RepuTex has revealed 80% of Australian listed companies are poorly prepared to manage the risks arising from climate change.

“Identifying carbon value” – a study of the carbon responsiveness of companies in the Australian Stock Exchange’s top 200 firms – warns that corporate failures to react to climate change will adversely affect profits.

On a scale ranging from –1, the lowest score, to +1, the report found the average Australian listed company scored a negative result of –0.08.

The financial sector – including insurance – scored a positive result, but RepuTex Head of Research Hugh Grossman told Sunrise Exchange News insurers could improve.

“I think the insurance sector has been quite aware [of climate change] and the leading stocks have been all over it in terms of political lobbying for change,” he said. “They are exposed by the nature of their investments downstream and the nature of those depreciating assets is a real risk.

“There hasn’t been as strong a correlation as we might have thought. Most companies that are exposed downstream are not doing a whole lot to address that.”

Financial sector companies were found to be focusing on brand enhancement through carbon neutral schemes rather than tackling the bulk of their carbon exposure that comes from capital injection into investments, insurance and investment portfolios.