Wildfire Resilience Investing: Honeywell Leads the Charge

Honeywell International and Siemens Limited are two companies that stand to gain from Europe's increasingly harsh wildfire seasons, as governments and industries focus on fire prevention, insurance risk, and climate adaptation.

Honeywell supplies automation and energy technology, including control systems, sensors, safety gear, and software for factories, refineries, commercial buildings, and critical infrastructure. Its products are used in fire detection and building security, among other areas. The company's aerospace division generates $17.9 billion of its revenue, followed by industrial automation at $9.2 billion and building automation at $7.7 billion.

Siemens Limited supplies technology for power grids, smart buildings, factory automation, and rail transport in India and globally. Its products can support more resilient cities and industrial sites, making it a key player in wildfire resilience efforts.

However, Sampo Oyj, an insurer with a 20.3% ROE and improving margins, is vulnerable to rising wildfire risk, which could pressure its claims costs, forecast earnings growth, and profit margin. The company relies on external borrowings, which may become more uncomfortable if extreme weather losses and investment income disappoint.