Should the projected impact of the global warming process on the future performance of the analysed business entity already be added to the fundamental analysis of listed companies' securities?

Should the impact of the progressive process of global warming on the future functioning of the economic entity under analysis already be included in the scope of the fundamental analysis used for the valuation of the intrinsic value of securities issued by joint stock companies?

The fundamental analysis used to value the intrinsic value of securities issued by joint stock companies is often enriched by the simultaneous calculation of stock market indices. Stock market ratios, i.e. the ratio of price per share to recently generated earnings per share. However, the figure resulting from the calculation of this ratio for many listed companies is in the double digits for many years. The double-digit value of this ratio can be interpreted as the estimated return period over several decades of the financial capital invested by the investor in the purchase of specific securities, i.e. usually shares or corporate bonds. The long-term interpretation of this type of stock market indicator is primarily of interest to institutional shareholders holding larger shares of stock in a specific listed company. On the other hand, minority investors owning or planning to buy a relatively small shareholding in the context of the overall shareholding usually apply a current, short-term and relative interpretation of this type of stock market indicator, which is usually determined by the shorter time horizon of the planned investment in securities. For institutional investors, on the other hand, the decades-long period of investment in securities, the long-term management of the development of an economic entity, is particularly important in the context of their investment strategies. In view of the above, considerations inspired by questions such as: should the impact of the ongoing process of global warming on the future functioning of the economic entity under consideration already be taken into account?

In view of the above, I address the following question to the esteemed community of scientists and researchers:

Within the scope of the fundamental analysis carried out and applied to the valuation of the intrinsic value of securities issued by joint stock companies, should the impact of the progressive process of global warming on the future functioning of the analysed economic entity already be taken into account?

What do you think about this topic?

What is your opinion on this subject?

Please respond,

I invite you all to discuss,

Thank you very much,

Warm regards,

Dariusz Prokopowicz