Four Twenty Seven's monthly newsletter highlights recent developments in climate risk and resilience. This month we discuss the potential for a green recovery, highlight ways in which asset owners can leverage Four Twenty Seven's Physical Climate Risk Application and share recent and upcoming webinars.
In Focus: Will There be a Green Recovery?
Governments Include Climate Measures in Recovery Efforts
During last week's webinar Founder & CEO, Emilie Mazzacurati, joined Rahul Gosh, SVP, Credit Research & Strategy at Moody's, to discuss what organizations can learn from the pandemic to help prevent and prepare for climate change. Emilie discussed the impact on emissions, government responses and how these events can help companies understand the implications of carbon transition risk. Register for the webinar to watch the replay.
How Can Asset Owners Manage
Use Case - Climate Data for Risk Management in Real Asset Portfolios
As regulatory pressure to assess and report climate risks picks up, and physical climate hazards increasingly result in financial damage, asset owners face the daunting challenge of leveraging climate data for financial decision-making. Real estate, infrastructure, agriculture, timber and other real assets have long been an integral component of an asset owner’s portfolio due to their returns and the diversification they offer to the overall fund. However, many real assets are highly vulnerable to physical climate risks. These risks manifest in direct and indirect ways, including increased costs, reduced revenues and decreased asset value.
Evaluating an asset’s exposure to physical climate hazards is challenging, yet also an essential first step in managing climate risks. Four Twenty Seven’s Physical Climate Risk Application allows investors to assess exposure to floods, sea level rise, hurricanes & typhoons, heat stress and water stress at the asset and portfolio levels. Asset owners leverage hazard exposure scores to identify regional and sectoral trends as well as specific hotspots. Flexible viewing options and digestible data provide insight for portfolio risk assessments and due diligence processes. This new case study explores how, armed with climate risk data at decision-relevant scales, asset owners can begin to manage their risk.
Update to the EU Non-financial Reporting Directive
The European Commission is soliciting feedback on its non-financial reporting directive as part of its efforts to improve oversight of non-financial reporting in alignment with its Green Deal and a global call for a new approach to regulating non-financial disclosure. Provide feedback by June 11.
European Commission Consultation on Climate Adaptation
As part of its Green Deal the European Commission has launched a climate adaptation strategy to encourage eco-friendly investments and build resilience. It is refining the initiative and soliciting feedback through a public consultation. Respond by June 30.
Four Twenty Seven Shortlisted in Waters Ranking 2020
Vote for Four Twenty Seven as Best Alternative Data Provider
Four Twenty Seven is honored to be short-listed in the Best Alternative Data Provider category in the 2020 Waters Rankings.
This readers' choice award recognizes the capital markets' leading technologies and providers. We'd be grateful for your vote! You can vote here before May 29.
Webinars on Integrating Climate Risk into Financial Decision Making
IIF Webinar Recording: Quantifying the Impacts of Climate Change
This Institute of International Finance webinar (IIF) features Emilie Mazzacurati, Founder & CEO of Four Twenty Seven, and Jing Zhang, Managing Director, Global Head of Quantitative Research at Moody’s, as they provide an overview of Moody’s climate risk solutions on the financial impacts of climate change. Watch now.
AllianceBernstein Webinar: Incorporating Climate Change into Investment Research
Please join us for a discussion about how the investment value chain is incorporating climate change into decision-making. Sara Rosner and David Wheeler, of AllianceBernstein, will discuss their collaboration with Columbia University on climate change and highlight the climate theme in their sustainable portfolios. Martina Macpherson, of Moody’s, will provide an overview of the current market environment and Moody's ESG and climate efforts, and Emilie Mazzacurati will present a deep dive into climate risk analytics. This webinar is next Wednesday, May 27 at 2pm BST / 9am EST / 6am PST. Register here.
Inside the Office at Four Twenty Seven
UK Sales Director - Ben Boukhobza
Four Twenty Seven welcomes Ben as UK Sales Director. Ben leads Four Twenty Seven’s business development and growth strategy in the United Kingdom and Ireland.
Ben leverages ten years of experience across various roles within the Commercial Group at Moody’s Investors Service (MIS). Most recently Ben led the EMEA Sales Support team, having previously held roles ranging from sales and account management to operations and technology.
Join the team! Four Twenty Seven is Hiring
There are several opportunities to join Four Twenty Seven's dynamic team. See the open positions below and visit our Careers page for more information.
Project Manager with excellent leadership skills and proven experience coordinating activities across teams of different disciplines within research, content and technology
Regional Sales Director (North America) with extensive experience selling and supporting data products and services for large commercial, financial and government institutions
Join the team online at these upcoming events and check our Events page for updates, including registration links to webinars not yet available:
Four Twenty Seven's monthly newsletter highlights recent developments in climate risk and resilience. This month we discuss the overlapping challenges of COVID-19 and climate hazards, share consultations on climate risk for financial stakeholders and highlight developments in climate risk at Moody's.
The Compounding Challenges of Climate Hazards and COVID-19
Climate Preparedness Takes on New Meaning - Four Twenty Seven Analysis
Last week in the Southern U.S., residents and policy-makers weighed the risks of high winds and flooding alongside the risks of spreading COVID-19, as many evacuated to storm shelters, and 750,000 people lost power across ten states from Texas to West Virginia. Meanwhile that same week 50,000 people in Connecticut lost power because of a storm, with restoration efforts complicated by COVID-19. The devastating human health and economic impacts of the COVID-19 pandemic are exacerbated by climate hazards, which threaten communities around the world. Four Twenty Seven's new analysis explores exposure to floods, heat stress, hurricanes and wildfires in U.S. municipalities alongside the impacts of COVID-19 on the same regions.
Our analysis explores exposure to extreme rainfall in the Midwest and the particular vulnerability of essential services such as manufacturers of personal protective equipment and farmers, to disruptions due to floods. It discusses the human health implications of extreme heat and its particular threat to business continuity from power disruptions when business operations are dispersed across employees' homes. States like Louisiana and Florida are addressing COVID-19 while preparing for a busy hurricane season. Likewise, typical wildfire preparations have been delayed and canceled due to the pandemic, leaving states like California, Washington and Colorado particularly vulnerable to this year's wildfires.
Public Consultations on Climate Change in the Financial Sector
While the world is sheltering from COVID-19, regulators are moving forward with their goals to address climate change. There are currently several open consultations to gather industry feedback on new standards and reporting requirements.
EU Draft Minimum Standards for Climate Benchmarks
The European Commission is seeking feedback on draft standards for its "EU Climate Transition" and "EU Paris-aligned" benchmarks. The goals of the benchmarks are to increase transparency, help direct capital toward climate-friendly investments and prevent green-washing. Provide feedback by May 6.
FCA Proposal for Updated Climate Risk Disclosure
The UK Financial Conduct Authority is seeking feedback on its proposals to mandate climate risk disclosure for all commercial companies with premium listings. This requirement would build upon the Task Force on Climate-related Financial Disclosures recommendations and use a comply or explain approach.Respond by June 5.
Update to the EU Non-financial Reporting Directive
The European Commission is soliciting feedback on its non-financial reporting directive as part of its efforts to improve oversight of non-financial reporting in alignment with its Green Deal and a global call for a new approach to regulating non-financial disclosure.Provide feedback by June 11.
Consultation on Renewed EU Sustainable Finance Strategy
Moody's newESG and Climate Risk Hubcollates resources on climate risk and ESG from Moody's and its affiliates, including Four Twenty Seven. The platform includes solutions and insights to help investors, lenders and other stakeholders integrate climate risk into decision-making.
ESG Factors Frequently Cited as Material Credit Considerations
Out of almost 8,000 Moody's private sector ratings actions in 2019, about a third referenced material ESG considerations. Moody's Investor Service's new reportshares findings on how ESG considerations are factored into ratings actions.
Climate Risk News
New High Temperature Records Set
Last month was thehottest month on record for the world's oceansand the oceans' five hottest years have been within the last ten years. Warm oceans are connected to many climate hazards, ranging from hurricanes to wildfires. If the Atlantic remains warm during hurricane season, it's expected to contribute to stronger storms this year. Meanwhile, warm seas can pull rain from inland, contributing to drought associated with wildfire conditions. This occurred last year in Australia when the Indian Ocean was particularly warm off of Africa's coast.
These ongoing scientific findings on the dire rate of climate change, including new temperature records and updatedsea level rise projections, have significant financial implications. The Global Association of Risk Professionals (GARP) launched a newGlobal
Four Twenty Sevenwelcomes John as Senior Climate Data Analyst. John performs stochastic modeling of climate and weather data to advance Four Twenty Seven’s climate risk analytics. Previously, John worked on topics ranging from transportation economics in Los Angeles to particle physics at the Large Hadron Collider in Geneva, Switzerland. John monitored arctic mercury pollution in Norway as part of a Fulbright Fellowship, and received his Ph.D. at Caltech for his research on the ocean’s response to climate change.
Four Twenty Seven is Here to Serve our Clients
As COVID-19 has led to widespread disruption in businesses and personal lives, Four Twenty Seven remains committed to ensuring the safety of our staff and clients while also continuing to provide the same data, analysis and client support that we are known for. Our business remains open globally, with teams in the U.S., Paris, London and Tokyo working remotely. Please do not hesitate to reach out to us via email or on our cell phones.
An Update on Postponements and Cancellations:
Apr 28 – Afire Rising Leaders Summit, New York, NY: Chief Revenue Officer, Lisa Stanton, will speak - CANCELED
Four Twenty Seven's monthly newsletter highlights recent developments on climate risk and resilience. This month we discuss the implications of the COVID-19 crisis for climate change and share a new Moody's report on scenario analysis.
COVID-19 and Climate: Multifaceted Impacts
427 Analysis - A Public Health Emergency with Dire Economic Consequences and Several Implications for Climate
The unprecedented global public health crisis from COVID-19 has led to fears of a global recession, but also presents a range of implications for climate change. While COVID-19’s immediate impacts include emissions reductions, the longer-term impacts on climate action and resilience-building are more complex. Likewise, COVID-19 may provide insight into how prepared communities are for the increasing frequency of disasters and how financial institutions can prepare for sudden disruptions. Four Twenty Seven's new analysis explores several of these impacts, outlining topics to watch as we strive to understand the long-term implications and ensure the safety of communities and businesses.
The analysis highlights that short-term emissions reductions may be followed by economic stimulus packages favoring polluting industries. Yet, as companies adapt to remote work, there is the potential for longer-term behavior shifts that help reduce emissions. Meanwhile, communities around the world face various levels of restrictions, with impacts on climate negotiations and research. The COVID-19 pandemic increases the risk of business disruptions and compounds the public health risks of extreme weather events, making businesses and communities more vulnerable to climate impacts. The crisis also underscores the need for preparedness. The ways policy-makers, businesses and individuals respond to today’s public health emergency and the resulting successes and failures may provide lessons for responding to other multifaceted disasters, applicable to extreme weather events and natural disasters.
The transition risk approach is to explore sector-specific credit implications for two IEA emissions scenarios. For physical risk scenarios Moody’s will use data from Four Twenty Seven to provide a uniform starting point from which to explore the range of credit implications of different climate hazards across sectors. Since the climate takes years to fully respond to greenhouse gases in the atmosphere, in the near-term the uncertainty in physical outcomes is not driven by policy changes, but rather by scientific uncertainty within the climate models. By grouping the outcomes of climate models within a single RCP into low, medium and high tiers one can explore the range of potential severity in climate hazards such as extreme temperature and precipitation. Register for free to read the analysis:
Four Twenty Seven welcomes Akiyo as Frontend Developer. Akiyo works on the climate risk application’s user interface, building out the platform and systems to serve a diverse client base. Previously, Akiyo developed web applications at the Lawrence Berkeley National Laboratory and has worked with Python and Flask on the backend. Her diverse background also includes process automation and systems engineering.
Four Twenty Seven is Here to Serve our Clients
As COVID-19 has led to widespread disruption in businesses and personal lives, Four Twenty Seven remains committed to ensuring the safety of our staff and clients while also continuing to provide the same data, analysis and client support that we are known for. Our business remains open globally, with teams in the U.S., Paris and Tokyo working remotely. Please do not hesitate to reach out to us via email or on our cell phones.
An Update on Postponements and Cancellations:
Mar 25 - 26 – Ceres Conference, New York, NY: Senior Analyst, Lindsay Ross, will attend. - WEBCAST
Four Twenty Seven's monthly newsletter highlights recent developments on climate risk and resilience. This month we announce our new on-demand climate risk scoring application, discuss RCP 8.5 and highlight developments in climate risk disclosure.
In Focus: Four Twenty Seven Announces its On-demand Climate Risk Application
Score thousands of assets in minutes with Four Twenty Seven’s new on-demand physical climate risk application.
We're delighted to announce that our new on-demand climate risk scoring tool is now live! This application responds to the financial sector’s growing call for the integration of granular, forward-looking climate data into investment decisions and risk management practices.
Users enter addresses and facility types to receive information on their assets’ exposure to floods, sea level rise, hurricanes & typhoons, heat stress and water stress to mid-century. Detailed facility scorecards include data on the underlying risk drivers for each hazard and users can toggle between maps and tables to identify regional trends and multi-hazard exposure. This tool informs due diligence, risk management, enhanced portfolio construction, resilience investment and pre-loan evaluations to support the integration of climate risk into financial decision-making across use cases.
“We are excited to bring our on-demand physical climate risk application to the market. Our app provides access to sophisticated climate model outputs in easily understandable metrics with just a few clicks,” says Founder & CEO Emilie Mazzacurati. “Real-time access to forward-looking, location-specific data on climate risk enables investors, banks and corporations to manage their risk and invest in resilience.”
Moody's Announces Global Head of ESG and Climate Risk Businesses
Moody's Corporation announced yesterday that Andrea Blackman has been appointed Moody's Global Head of ESG and Climate Risk Businesses. Andrea comes from a leadership position in Moody's Analytics CreditView. In her new position Andrea will lead Moody's strategy and vision for long-term growth in line with market demands for ESG and climate risk services. Moody's ESG and climate risk affiliates, including Four Twenty Seven and Vigeo Eiris will be part of this new business unit. Learn more about Moody's broad ESG and Climate Risk offering here.
RCP 8.5 - Still a Valid Possibility
Extracting the Scientific Uncertainties from the Policy Uncertainties
An article published in Nature last month sparked confusion about the legitimacy of Representative Concentration Pathway (RCP) 8.5, but there are compelling reasons RCP 8.5 remains an important part of scenario analysis.
The study's authors explain that the initial design of RCP 8.5 was to capture growing rates of coal production in China. They assert that since the rate of coal production has actually slowed, it's not appropriate to continue using this scenario as the "business-usual" scenario and rather it should be considered a highly unlikely extreme scenario. However, the article focuses on the policy drivers, rather than the scientific drivers, of warming. The authors do not explore the physical phenomenon, such as sudden release of methane (a powerful greenhouse gas) due to thawing of permafrost. This is one of several tipping points that could lead to RCP 8.5 outcomes by 2100, independent of how coal production evolves.
While the initial design of RCP 8.5 was intended to capture growing rates of coal production, it doesn’t mean the scenario can’t be a stand-in for other sources of emissions that could quickly accelerate due to tipping points. Bob Kopp, a climate scientist at Rutgers University, has previously pointed out on Twitter that "from a climate science perspective, RCP 8.5 is very useful, since we would like to know how models simulate a 5C world.”
New Survey on the Quality of Climate
Climate Risk Disclosures Lack Transparency
Companies tend to disclose more details on their exposure to transition risk than physical risk and disclosures still lack transparency on which models and assumptions companies use to assess risk, according to the recent European Financial Reporting Advisory Group report on How to Improve Climate-related Reporting. The report highlights that when firms approach disclosures solely from a compliance perspective, they miss an opportunity to genuinely identify their risk and improve their resilience. It also identifies best practices and current maturity of disclosures in line with the Task Force on Climate-related Financial Disclosures (TCFD) and the EU Non-financial Reporting Directive's non-binding guidelines on climate risk.
The Climate Disclosure Standards Board also released an EU Environmental Reporting Handbook sharing examples of environmental and climate disclosures under the EU Non-Financial Reporting Directive.
Regulatory Action & Oversight on Climate Risk Disclosure
Australia and UK Each Announce Plans for New Disclosure Regulation
Oren is a strategic data and content expert, adept at launching and overseeing products and solutions to serve the top investment firms globally.
Join the Four Twenty Seven team at these events:
Mar 9 - 11 – GARP Risk Convention, New York, NY: Global Director of Client Services, Yoon Kim, will present on climate risk for investors and Editor, Natalie Ambrosio, will host Four Twenty Seven's booth.