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New research suggests that climate change hits indebted companies the hardest

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Climate change poses the best risk to the most defenseless peoplethe same applies to companies: highly leveraged companies – that is, those that have collected an excessive amount of debt – are extremely vulnerable to climate shocks. That’s what we present in one other study published in The Review of Corporate Finance, which analyzed data from: over 2,500 publicly traded US companies over 16 years old.

As professors who study climate financing AND corporate governancewe wanted to know how climate change affects businesses and the way stakeholders – individuals who share in the company’s success, e.g. consumers, employees and investors, reply to it.

So us and our colleagues Zadok El Ghoul at the University of Alberta and Omrane Guedhami at the University of South Carolina conducted a study to look at how climate risk affects indebted companies.

We find that climate change has a double impact on highly leveraged firms by increasing the costs that stakeholders impose on them.

Consider consumers. Scientists know that climate change can prompt people to change their purchasing patterns – for instance, by buying greener products or engaging in boycotts. And while changing consumer preferences pose challenges for all businesses, an organization that is deeply in debt has a harder time adapting.

Our study suggests as much. We found that two years after intense exposure to climate change, highly indebted companies saw sales growth decline by a mean of about 1.4%. In monetary terms, this translates into a mean lack of $59.7 million per company.

We found that climate change also worries investors. Companies exposed to climate risk face the threat of economic and operational disruption that could drain lenders’ resources, particularly for companies already burdened by high debt. Examining capital issuance in our sample of companies, we found that climate exposure reduced firms’ net debt issuance – that is, recent debt minus retired debt – by a mean of about $457 million per firm. This is an extra obstacle for indebted companies trying to lift money.

Why is it necessary?

Researchers have long known that indebted companies usually tend to experience product failures and losing market share when economic conditions go south. As some analysts say, an excessive amount of debt may even force companies to exit of business happened with Toys R Us.

Closed Toys R Us store in Orlando, Florida.
Paul Hennessy/NurPhoto via Getty Images

Our research shows that climate change, which the World Economic Forum predicts will pose a threat by 2100 about 2% of world financial assets, will push already fragile businesses over the edge. It highlights the enormous and asymmetric effects that global warming can have on businesses, in addition to the reality that the most vulnerable companies will endure the worst.

What’s next

Our research highlights the disproportionate impact of climate change on financially fragile businesses. In the future, we plan to research the impact of climate change on companies’ business behavior, especially in ethical terms.

When it involves climate solutions, one among us (Huan Kuang) showed how companies can use innovation to cut back their vulnerability to climate change. IN working document co-authored with Bing Liang from the University of Massachusetts Amherst found that every 1% increase in climate-related innovation – as measured by patent data – reduces the growth of company-level greenhouse gas emissions by roughly 100,000 metric tons.

However, indebted companies cannot rush to speculate in recent technologies without incentives. This means that policy incentives shall be key to success and further research is required to find out what these should appear to be.

Climate change might also have more complicated economic impacts than many individuals realize. For example, if it forces unprofitable companies to exit of business, that could be good for the economy – a minimum of in theory, as one among us (Ying Zheng) identified in a recent article on a related topic.

Many questions remain unanswered, but it surely is already clear that climate change can have a crucial and multi-faceted impact on the way forward for business. We encourage other researchers to conduct further research.

This article was originally published on : theconversation.com
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Business and Finance

David Shands and Donni Wiggins host the “My First Million” conference at ATL

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December is the birth month of David Shands and Donnie Wiggins, friends and business partners. Most people have fun by throwing a celebration. Others imagine it must be catered for. The chosen ones spend the day relaxing in peace and quiet.

Then there’s Shands and Wiggins.

The two decided that the best birthday gift can be to offer individuals with resources for generational wealth through a conference called “My first million”in Atlanta.

It’s a compromise between how their families and family members need to honor them and their desire to proceed to serve others. Shands acknowledges that almost all people won’t understand, and he unapologetically doesn’t expect them to.

“It’s not up to us to convince anyone why we do what we do,” admits Shands.

“I think everyone does what they do for different reasons, and I would just attribute it to a sense of accomplishment that I can’t explain to anyone else.”

He doesn’t need to clarify this to Wiggins because she understands his feelings. Wiggins has had a passion for serving others for so long as she will be able to remember.

“When I was in middle school, there were child sponsorship ads on TV featuring children from third world countries. I was earning money at the time and I asked my mother to send money,” she says BLACK ENTERPRISES.

She recalls how sad she felt for youngsters living in a world with so many opportunities, but at the same time going hungry. Her mother allowed her to send money, and in return she received letters informing her of their progress.

“It was very real to me,” Wiggins says, now admitting she’s undecided the letters were authentic. “I received a letter from the child I sponsored, a photograph and some updates throughout the 12 months. It was such a sense of being overwhelmed and it was something I felt so good about. I didn’t even tell my friends I used to be doing it.”

She carried this sense throughout her life, even when she lost every little thing, including her house, cars, and money. She still found ways to serve and give back, which is the basis of her friendship with Shands.

They each love seeing people at the peak of their potential, and that is what “My First Million” is all about. There can be no higher birthday gift for them than helping others create generational wealth.

What to expect during the “My First Million” conference.

They each built successful seven-figure empires, then train others, write books about it, and launch an acclaimed podcast Social proof.

Now they’re imparting that knowledge through the My First Million conference, an event for aspiring and existing entrepreneurs. Shands and Wiggins need to prove that being profitable is feasible and encourage people to bet on themselves.

“David and I, on paper, are not two people who should have made millions of dollars. Number one, we want (people) to see it,” Wiggins says. “Then we want them to actually get out of that room with practical and actionable steps.”

Both are clear: this just isn’t a motivational conference. This is a conference where people, irrespective of where they’re of their journey, will come away with clarity about their business and what they must be doing as CEOs. Shands and Wiggins want individuals who do not have a transparent marketing strategy or are considering starting a business to also attend the meeting.

“A few areas we will cover are inspiration, information, plan and partnership,” adds Shands. “We will give you 1-2-3 steps because some people get depressed and uninspired. Even if they know what to do, they won’t leave, go home and do it. So we have to really put something into their heads and hearts that they come away with.”

Sign up and enroll for My First Million Here. The conference will happen on December 13 this 12 months. but Shands and Wiggins say it definitely won’t be the last for those who miss it.


This article was originally published on : www.blackenterprise.com
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Business and Finance

Operation HOPE on the occasion of the 10th annual world forum

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Operation HOPE Inc. takes over Atlanta for the biggest game in the country dedicated to financial literacy and economic empowerment, Saporta reports.

The HOPE Global Forums (HGF) Annual Meeting 2024 strengthens the crucial link between financial education, innovation and community upliftment in hopes of finding solutions to the problems that stifle challenges around the world.

Organized by Operation HOPE founder John Hope Bryant, together with co-chairs Atlanta Mayor Andre Dickens and U.S. Ambassador Andrew Young, the forums, to be held December Sep 11 at the Signia Hotel, will have fun its 10th anniversary with three days of engagement discussions, observations and forward-looking presentations.

Under the theme “The Future,” Hope Bryant says attendees are looking forward to a “powerful moment in history.”

“Over the past decade, we’ve brought together great minds with daring ideas, servant leaders with voices for change, and other people committed to a brand new vision of the world as we realize it. “‘The Future’ is a clear call to action for leaders to help ensure prosperity in every corner of society,” he said.

The extensive program includes influential and well-known speakers who address business, philanthropy, government and civil society. Confirmed speakers include White House correspondent Francesca Chambers, media specialist Van Jones and BET Media Group president and CEO Scott M. Mills.

“John Hope Bryant and his team have been doing this for ten years, and every year HGF raises the bar,” Young said. “Discussions about the FUTURE are important not only for civil dialogue; they are also essential to bridging the economic divide and solving some of today’s most important problems.”

Atlanta is predicted to welcome greater than 5,200 delegates representing greater than 40 countries.

“I have long said that Atlanta is a group project, and through our partnership with HOPE Global Forums, we are inviting the world to join the conversation,” Dickens mentioned. “From home ownership and entrepreneurship to youth engagement and financial education, HGF will offer bold and innovative ideas to ensure a bright future for all.”

It coincided with the organization’s annual meeting launched one other path to enhance financial knowledge with HOPE scholarships. With three tiers of scholarships – HOPE Lite, HOPE Classic and HOPE Silver – clients could have access to free financial coaching and academic resources.


This article was originally published on : www.blackenterprise.com
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Business and Finance

New Orleans’ black business district is marked by history

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New Orleans, Black Business Disctrict


New Orleans has given a historic monument to a Black business district closed for interstate construction.

The marker was a project fulfilled by in response to the initiative of Plessy and Ferguson. Founded by descendants of men involved within the Plessy v. Ferguson case that legalized segregation within the United States, the organization worked with other community groups to put a marker under the Claiborne Viaduct.

Before the upheaval, Black New Orleanians could find stores owned by other members of their community on Claiborne Avenue. Racial discrimination originally limited the power to buy on the famous Canal Street. Given this, blacks as an alternative flocked to the realm to purchase every little thing from groceries to funeral arrangements.

This mall was home to many Black-owned businesses, and emerging and established entrepreneurs had arrange shop for generations. Consisting of pharmacies, theaters, studios and more, it helped maintain a vibrant black culture in the realm. It reigned because the most important street of Black New Orleans from the 1830s to the Seventies.

The street once featured a picturesque cover of oak trees surrounding bustling businesses. However, its decline began with the expansion of roads within the southern state. The first casualty was the oak trees that were cut all the way down to make way for the development of Interstate 10, and shortly thereafter, the district’s thriving entrepreneurs suffered an identical fate.

Many residents do not forget that they didn’t know in regards to the upcoming investment until the trees began falling. Raynard Sanders, a historian and executive director of the Claiborne Avenue History Project, remembered the “devastation” felt by the community.

“It was devastation for those of us who were here,” Sanders told the news outlet. “I was walking to school and they were cutting down oak trees. We had no warning.”

Despite its eventual decline, the district stays an integral a part of Black New Orleans entrepreneurship. Now the town will physically resemble a historic center where Black business owners could thrive. They celebrated the revealing of the statue in true New Orleans style with a second line that danced down Claiborne Avenue.

“The significance of this sign is to commemorate the businesses, beautiful trees and beautiful people that thrived in this area before the bridge was built, and to save the people who still stand proud and gather under the bridge,” also said Keith Plessy, a descendant of Homer Plessy’ ego.

The growth of local black businesses continues. Patrons and owners alike hope to evoke the spirit of Claiborne’s original entrepreneurs, empowering the community.


This article was originally published on : www.blackenterprise.com
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