Concerns about water security often inform climate risk-related decisions made by environmentally focused investors (Porritt, 2001; Stern, 2006). Yet, potential liabilities for damage caused by extreme flood and drought events linked to global warming present risks that are not always reflected in share prices (Krosinsky et al., 2012). Considering the highly destructive nature of such events, we query whether companies, or specific sectors, could and should be held at least partially liable for their emission-releasing business activities. Recent articles (Rayer & Millar, 2018; Rayer et al., 2020) estimate that under a hypothetical climate liability regime, North Atlantic hurricane seasons might increasingly generate 1-2% losses on market capitalizations (or share prices) for the top seven carbon-emitting, publicly listed companies. In this paper, we extend the concept of the climate liability regime to estimate the impact of global flood- and drought-related damages on the share prices of nine fossil-fuel firms (including the seven mentioned by Rayer et al. (2020)). Following Rayer et al. (2020), we use incremental climate impacts and historical corporate emissions to estimate that climate change-related global flood and drought damages for the period of 2012 to 2016 amount to approximately 2-3% of the top nine carbon-emitting companies’ market capitalizations. We also include a discussion of moral responsibility and the proportion of obligations between producers and users. Quantifying impacts from extreme weather events increases salience and serves as an example of how science can identify and address the important business questions, pertinent to both investors and companies, that arise from a changing climate. References Krosinsky, C., Robins, N., & Viederman, S. (2012). Evolutions in sustainable investing. John Wiley & Sons. Porritt, J. (2001). The world in context. HRH The Prince of Wales’ Business and the Environment Programme, Cambridge. Rayer, Q. G., & Millar, R. J. (2018). Investing in Extreme Weather Conditions. Citywire Wealth Manager®, (429) 36. Rayer, Q., Pfleiderer, P., & Haustein, K. (2020). Global Warming and Extreme Weather Investment Risks. Palgrave Macmillan. https://doi.org/10.1007/978-3-030-38858-4_3 Stern, N. (2006). Stern Review executive summary. London.

To stabilize global warming within the 1.5-2.0°C Paris Agreement goal, greenhouse gas (GHG) emissions need to reach net-zero. Offsetting is required for net-zero emissions (emissions minus offsets), as achieving zero emissions is unrealistic. Offset schemes differ widely in their capacity to mitigate anthropogenic global warming (AGW). Rayer et al. (2021) provide offsetting guidelines to strengthen their long-term climate benefit, this chapter further develops this topic. We propose a framework for rating different offset types based on their climate risk, moving beyond the usual criteria of verification, audit, and additionality. We apply our offset climate ratings to some offsetting types and case studies including the sorts of schemes proposed by major oil companies, and the PAS 2060 carbon-neutrality standard. Some offsets provide little more than economic nudges towards emissions reduction. Climate offsetting requirements are more exacting. The proposed framework grades offsets from most to least benefit. Grades help classify offsets’ climate risks based on: helping terminate it, slowing warming, or only offering economic incentives with little climate benefit. Ultimately, to stabilize global warming, it will be necessary for policy to encourage the highest rated offsets under the proposed framework. Reference Rayer, Q. G., Jenkins, S., & Walton, P. (2021). Defining net-zero and climate recommendations for carbon offsetting. In Walker, T., Wendt, S., Goubran, S., & Schwartz, T. (Eds.), Beyond the 2ºC: Business and Policy Trajectories to Climate Change Adaptation (chapter 2). Palgrave Macmillan.