Sunday, January 12, 2014

Is Your Portfolio Resilient?

The very act of investing is an act of faith in the future. But is your faith well placed? Are the companies in your portfolio prepared to confront the risks and opportunities that climate change poses? Consider the following examples from the recent report "Physical Risks From Climate Change," provided here with permission from Calvert Investments, the report's publisher.

VF (NYSE: VFC  ) , owner of such brands as The North Face and Lee, acknowledged that the 2010 "once-in-a-century" floods in Pakistan and Australia, coupled with wet weather and freezes, "ravaged cotton crops resulting in drastic increases in the price of cotton," which had "a material effect on our business as we sought a balance between absorbing the cost and raising prices on our cotton goods."

On the flip side, Under Armour (NYSE: UA  ) enjoyed elevated retail inventory levels for the 2011-2012 winter due to "the impact of unseasonably warm weather," accounting for about 2 percentage points of growth coming out of the fourth quarter 2011 into 2012.

Guess? (NYSE: GES  ) experienced an unexpectedly low growth rate in Asia during the third quarter of fiscal year 2012, partly because of reduced outerwear sales in South Korea caused by "weather that was much warmer than we had anticipated.

John Vechey of PopCap Games recently joined The Motley Fool for a climate change summit. Among his guests was Stu Dalheim, Vice President of Shareholder Advocacy at Calvert Investments. In the video below, Dalheim discusses some of the ways that Calvert seeks out companies that have or are developing strategies for success in a changing world.

Top 5 Growth Stocks To Watch For 2014

Climate change isn't the only factor buffeting the retail space: It's in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.

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