Newsletter: Wildfires, Storms and Their Impacts on Credit Risk

Four Twenty Seven's monthly newsletter highlights recent developments in climate risk and resilience. This month we discuss the costs of climate hazards, share updates on Moody's ESG and highlight recent developments in climate risk regulation.

In Focus: The Current Reality of the
Climate Crisis

Devastating Human & Economic Costs of Wildfires

As cities on the West Coast take turns with the worst air quality in the world, and cope with evacuations and loss of life and property from record-breaking wildfires, there is increasing evidence about the longer-term implications of these devastating events. After several years of catastrophic fires in California, exacerbated by hot and dry conditions driven by climate change, homes in exposed areas are likely to decline in value, which in turn can increase mortgage default rate, with severe market implications.

Likewise, as the COVID-19 pandemic limits firefighting resources and makes evacuations particularly challenging, new research continues to emerge about the devastating health impacts of wildfire smoke. For example, "Researchers from the University of Tasmania identified 417 extra deaths that occurred during 19 weeks of smoky air, and reported 3,100 more hospital admissions for respiratory and cardiac ailments and 1,300 extra emergency room visits for asthma" during Australia's bushfires last year.

This is not just a current concern in the U.S., but rather wildfire potential is increasing  globally, and regions such as Brazil and Portugal are also enduring fires. Four Twenty Seven's recent analysis on global wildfire potential assesses how conditions will become more conducive to wildfires in regions around the world.
Read Wildfire Analysis

Dire Records Foreshadow Worsening Extremes

As wildfires ravage the west, Hurricane Sally began to hit southeastern Mississippi and the western Florida Panhandle on Tuesday. The slow-moving storm is expected to continue to drop rain and lead to heavy wind as it moves to shore on Wednesday. This is the 18th named storm of the Atlantic hurricane season and the earliest S-named storm on record. Several more hurricanes have already formed in the Atlantic and these back-to-back storms present significant challenges; diminishing the window for search and rescue, increasing the duration of flooding and power outages and exacerbating COVID-19 challenges. Sea level rise driven by climate change worsens storm surge risk during hurricanes and warmer oceans can fuel stronger storms.

This comes as this year's first seven months were the second hottest on record and in the Northern Hemisphere July was the hottest on record, beating the previous record set just last year. This is increasingly evident in the Arctic, where satellite imagery shows that the region's largest remaining ice shelf lost a 110 square km portion and where Bering Sea ice was at a record low during 2018 and 2019. This affects ecosystems and Indigenous communities and contributes to feedback loops of warming in the region when reflective ice is replaced by dark water. Meanwhile, in Antarctica two glaciers that are already contributing to around 5% of global sea level rise were recently found to be less stable than previously understood.

Global Ports Exposed to Floods, Sea Level Rise

Sea ports handle 80% of global goods, so disruptions have significant wide-reaching consequences. This recent Economist article leverages Four Twenty Seven's data to explore risk exposure of about 340 of the world's largest ports. The analysis found that 55% of global trade goes through ports that are highly exposed to at least one hazard, such as floods, sea level rise, storms and wildfires and that 8% of trade passes through ports highly exposed to at least three hazards. This points to a need for risk assessment and resilience investment at ports, which requires capacity-building for port managers and an increase in adaptation finance.
Four Twenty Seven at Moody's:
Integration in Research and Ratings

Moody's Launches Comprehensive ESG Solutions Group

This week Moody’s Corporation announced the formation of an Environmental, Social, and Governance (ESG) Solutions Group to serve the growing global demand for ESG insights. The group leverages Moody’s data and expertise across ESG, climate risk, and sustainable finance, and aligns with Moody's Investors Service and Moody's Analytics to deliver a comprehensive, integrated suite of ESG customer solutions.

The ESG Solutions Group includes Four Twenty Seven and Vigeo Eiris, a global pioneer in ESG assessments, data and tools, and sustainable finance. Together, Moody's and its affiliates develop tools and analytics that identify, quantify and report on the impact of ESG and climate-related risks and opportunities. ESG and climate risk considerations are already integrated into credit ratings and research offered by Moody’s Investors Service (see below), and will be integrated into a range of Moody’s Analytics risk management solutions, research, data and analytics platforms, including stress testing solutions and climate-adjusted credit risk analytics for corporates, sovereigns and real estate.

Moody's Investors Service Announces Inclusion of Four Twenty Seven's Climate Risk Data in US CMBS and CRE CLOs

Reflecting the growing materiality of climate events for real estate, Moody's Investors Service now considers climate risk data and analytics from Four Twenty Seven in its research and ratings process for US commercial mortgage-backed securities (CMBS) and commercial real estate collateralized loan obligations (CRE CLOs). Presale reports include physical climate risk tables for the properties backing the loans in CMBS and CRE CLO transactions, including their forward-looking risk to floods, heat stress, hurricanes & typhoons, sea level rise, water stress and wildfires. 

Moody’s: U.S. Nuclear Operators Exposed to Physical Climate Risks

Physical climate hazards affect the operations and costs of nuclear plants due to their water needs and reliance on critical equipment. In its report, Nuclear Operators Face Growing Climate Risk but Resiliency Investments Mitigate Impact, Moody’s Investors Service leverages Four Twenty Seven’s physical climate risk data to explore the exposure of nuclear power plants to climate hazards, including heat stress, water stress, flooding and hurricanes. The analysis found that nuclear plant operators face physical and economic risks due to extreme events driven by climate change, and operators and owners will have to consider these risks and explore increased resilience options, as they approach license expiration and renewal processes between 2030 and 2050.
Developments in Climate Risk
Regulation & Assessment

U.S. CFTC Releases Report on Climate Risk

Last week the U.S. Commodity Futures Trading Commission released a report highlighting the economic risks of climate change and emphasizing the need for the financial system to address these risks. The first such report to be issued by a U.S. government entity, it covers both physical and transition climate risks and calls for a nationwide price on carbon. However, this comes two weeks after the U.S. Securities and Exchange Commission released updated disclosure requirements that don't include climate change.

UK Releases Consultation on Mandating TCFD Disclosure

The UK's Department for Work and Pensions released a public consultation on a proposal to mandate climate risk disclosure. The policy would require pension funds of at least £5 billion to assess and disclosure their climate risks and opportunities under several scenarios by October 2021 and would also apply to funds of at least £1 billion in 2022. Respond by October 7th.
Meanwhile, yesterday, New Zealand announced that it would mandate TCFD disclosure on a comply or explain basis by 2023.

Charting a New Climate: UNEP FI TCFD Banking Pilot Phase II Report

Last week the UNEP Finance Initiative released a report outlining phase II of its pilot project working with global banks to understand their approaches to assessing physical climate risks and opportunities and the tools and data that could best support these processes. It discusses climate risk vulnerability by sector, includes an exploration between the connection between loan performance and climate risk exposure and reviews several data providers, including Four Twenty Seven and our ongoing collaborations with Moody's Analytics.
Moody's ESG Summit: Climate Scenarios

Join Us During Climate Week NYC for a Half Day on Climate Risk

Hear from industry leaders on the latest market developments in climate change and discover new approaches to leveraging climate data and financial indicators to understand how physical and transition risks translate into credit risks. The session will include keynote presentations by Nick Anderson of IASM, Jane Ambachtsheer of BNP Paribas Asset Management and Sean Kidney of the Climate Bonds Initiative. The latter session will feature experts from Moody's, Four Twenty Seven and Vigeo Eiris, discussing new approaches to modeling climate risk and its financial impacts.

This event is hosted by Moody's in partnership with the Climate Bonds Initiative during Climate Week New York City. The session is on September 24th beginning at 9:15am EST.
Register for Free

Moody's Analytics' Launches ESG Risk Assessment Courses

Moody's Analytics' upcoming courses on ESG risk assessment include introductions to climate, environmental and social risks and their connection to credit analysis and portfolio management. These virtual, instructor-led courses will include case studies and discussions on how to assess and manage ESG risks. Topics include ESG KPIs, the Sustainable Development Goals, CO2 scope, climate risk analysis, proxy voting, climate risk disclosure and upcoming regulation.

Choose from three upcoming sessions, with options for time zones in the U.S., Europe and the Asia-Pacific regions and review the full course outline.
Inside the Office at Four Twenty Seven

Director, Sales - Jackie Willis

Four Twenty Seven welcomes Jackie Willis as Director, Sales in New York. Jackie leads Four Twenty Seven’s business development and growth strategy in the eastern United States. Jackie has spent the majority of her career in analytical and portfolio management roles in corporate and municipal finance, in the securities and banking industries at institutions such as Prudential Capital Management, TIAA-CREF, TD and Wachovia (now Wells Fargo). Most recently, she served as a Solution Specialist covering the commercial and industrial (C&I) and commercial real estate (CRE) credit risk models for Moody’s Analytics.

Join the team! 

Find open positions on our Careers page and visit Vigeo Eiris' and Moody's Careers pages for more opportunities in climate change and ESG.
Upcoming Events

Join the team online at these upcoming events and check our Events page for updates, including links to events not yet available:

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Four Twenty Seven sends a newsletter focused on bringing climate intelligence into economic and financial decision-making for investors, corporations and governments. Fill in the form below to join our mailing list. As data controller, we collect your email address with your consent in order to send you our newsletter. Four Twenty Seven will never share your mailing information with anyone and you may unsubscribe at any moment. Please read our Terms and Conditions.
 

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Four Twenty Seven Partners with Derani Brewis of DB Funds Advisory in Australia and New Zealand

JUNE 9, 2020 – BERKELEY, CA – Derani Brewis, senior finance executive, will represent Four Twenty Seven in Australia & New Zealand.

Four Twenty Seven, an affiliate of Moody’s and the leading publisher of climate data for financial markets, is pleased to announce the appointment of DB Funds Advisory Pty Ltd, the third party marketing firm founded by Derani Brewis, to represent them in Australia and New Zealand. Based in Sydney, Derani will lead Four Twenty Seven’s business development and growth strategy in Australia and New Zealand.

Derani brings over 25 years of experience in the Australian asset management industry, with relationships across the Australian superannuation and investment management community. Most recently, she was Head of Business Development and Asset Consultants at GMO Australia. Derani has also held senior roles with BT Financial Group, Rothschild Asset Management and Prudential Fund Managers. She will leverage her expertise in building business development strategies and creating strategic relationships to bring Four Twenty Seven’s climate risk data to financial stakeholders across sectors and asset classes.

“Australia is on the frontline of climate change and has already suffered extended damage from bushfires and cyclones over the past years. Investors are eager to understand their exposure to the physical impacts of climate change so they can better manage those risks,” says Emilie Mazzacurati, Four Twenty Seven’s Founder and CEO. “Four Twenty Seven’s on-the-ground presence in Australia will allow us to bring the best available science to respond to this demand and support resilience investments.”

Four Twenty Seven clients are able to assess virtually any property or facility worldwide for the projected impacts of climate change, including single real assets such as office buildings and airports, as well as large portfolios of securities. The financial sector in Australia is increasingly vocal on the need to assess and disclose climate-related risks as part of their overall assessment of investment opportunities.

“Many financial stakeholders are leading the way on climate change by taking a proactive approach to incorporating factors such as increases in temperatures, changes in water supply and demand, changes in rainfall conditions with potential floods, sea level rises and cyclone risks into their investment decisions,” says Brewis. “I think Australians and New Zealanders generally appreciate that climate change cannot be ignored and that climate change analysis is increasingly critical to making informed investment and business decisions. Given this, I am excited to help bring Four Twenty Seven’s climate risk data and unique analysis to financial stakeholders across Australia and New Zealand.”

Download the Press Release.

Newsletter: TCFD Reporting on the Rise

Four Twenty Seven's monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don't miss highlights from this year's risk reporting cycle, new resources for implementing the TCFD recommendations and opportunities to get involved in developing best-practices for climate risk disclosure! 

In Focus: TCFD Reporting on the Rise

Task Force on Climate-related Financial Disclosures Status Report


The first Status Report from the Task Force on Climate-related Financial Disclosures (TCFD), released earlier this fall, summarizes the ways in which financial reports incorporate the TCFD recommendations. It includes a review of over 1,700 companies including banks, insurance, asset managers and asset owners representing the financial sector and energy, transportation, materials and agriculture in non-financial sectors.

While most of these companies made disclosures that aligned with at least one TCFD recommendation, companies rarely disclosed the financial impact of climate change and integrating scenario analysis remains a challenge. The report emphasizes the need for more "decision-useful" information and notes that TCFD integration will require continued industry-specific thought-leadership and knowledge exchange.
 

France Leads the Way with Article 173 Reports 

The TCFD status report found that Europe had the highest percentage of companies integrating TCFD guidance into their disclosures, perhaps influenced by legislation such as France's Law on Energy Transition and Green Growth, with its Article 173 which mandates the disclosure of both physical and transition risks. Several French investors incorporate TCFD recommendations into their Article 173 reports, for example:
Awards and Best Practices for TCFD Reporting

The Leading Edge of Climate Risk Reporting

The Asset Owners Disclosure Project's (AODP) report Winning Climate Strategies: Practical solutions and building blocks for asset owners from beginner to best practice surveys the landscape of physical climate risk approaches to date, featuring investors such as Four Twenty Seven clients Aviva and First State Super for their innovative efforts to understand and address the portfolio risk posed by physical climate change.
AODP Global Climate Index 2018 for Pension Funds also gives a AAA rating, the highest score, to Four Twenty Seven client FRR, in recognition of its exhaustive effort to provide transparency on climate risk in its portfolios.

Four Twenty Seven Receives UNCTAD ISAR Honours for Climate Risk Scores

Four Twenty Seven was recognized by the UN Conference on Trade and Development (UNCTAD) with ISAR Honours for our company climate risk scores that support emerging best practices in corporate reporting. The International Standards of Accounting and Reporting Honour (ISAR) fosters the dissemination of initiatives that improve global corporate reporting and integrate environmental, social and governance factors into reporting cycles.
Resources for Climate Risk Disclosure

Interactive Online Tool with Sector-specific Guidance from EBRD

What should disclosures look like, in practice? The European Bank for Reconstruction and Development (EBRD) launched a Knowledge Hub with case studies and emerging best practices around physical climate risk and opportunity disclosures.
This interactive platform allows users to easily navigate to Manufacturing, Agribusiness, Power & Energy, Mining or Commercial Property sectors to access case studies with examples of approaching risks, opportunities and scenario analysis in physical risk disclosure. 

IGCC Report Outlines Resources for Australian Asset Managers

The Investor Group on Climate Change's report Investing in Resilience: Tools and frameworks for managing physical climate risk is a concise resource guide for investors striving to incorporate physical climate risk into their decision-making. Specifically targeting Australian investors, the report includes a diverse set of risk assessment tools, ranging from Australian-specific geospatial tools to global datasets such as Four Twenty Seven's.
Opportunities to Get Involved

Sign on to Support the TCFD

Individuals, governments and private companies are all invited to join investors in officially supporting the Task Force for Climate-related Financial Disclosures. Four Twenty Seven is part of a group of over 500 organizations already acknowledging the TCFD as an important framework for promoting transparency during the urgent transition to a resilient economy.
 

Events Section on the TCFD Knowledge Hub

Sort by theme and location to find events on TCFD implementation that are applicable to your work and browse the new Case Studies section of the TCFD Knowledge Hub to learn from others with similar challenges. 
 

Opportunity for Investors to Contribute to Research on ESG Integration

Responsible Investor (RI) is investigating how ESG is integrated into investment decisions and is asking investors to fill out this five minute survey to share their approach to ESG. RI is seeking input from all perspectives, including investors who are active in the ESG space and those who are skeptical of these approaches. Respondents will remain anonymous and answers will not be attributable.
Assessing Risk to Build Resilience

Four Twenty Seven Appointed to Develop Resilience Primer for Shipping

Four Twenty Seven will develop a primer on best-practices and opportunities for building climate resilience in the shipping sector as part of the Resilience Shift initiative from Lloyds' Register. The initiative fosters global infrastructure resilience through projects, investments and events and Four Twenty Seven will support this effort by engaging with key stakeholders in the shipping sector to create industry-specific guidance on resilience strategies.

Webinar Recording: Climate Risk in Real Estate

Watch this webinar recording to learn about Four Twenty Seven and GeoPhy’s analysis of exposure to physical climate hazards in global real estate investment trusts (REITs).  The presentations includes key findings from the white paper, Climate Risk, Real Estate, and the Bottom Line and a discussion of how physical climate data is leveraged in financial risk reporting for the real estate sector.
Inside the Office at Four Twenty Seven

Meet Vice President of Engineering, Klaus Fabian

Our VP of Engineering, Klaus Fabian, is automating our data analytics platform, building the user-interface that our clients are looking forward to. Klaus draws on more than 25 years of experience in new product development.

Klaus co-founded and served as CTO of Incorta, a business intelligence and analytics software provider funded by Google Ventures and Kleiner Perkins.

Previously he managed business intelligence and reporting software at Oracle, including BI Publisher and served as product manager for the Aegis Equity Portfolio Risk Analysis suite at MSCI (then Barra).
Upcoming Events

Join the Four Twenty Seven team in the field at these upcoming events:

  • November 13-15 – International Summit at Greenbuild Conference and Expo, Chicago, IL: Emilie Mazzacurati will provide the luncheon plenary address, "Climate Intelligence: Decision-making in the Age of Climate Change," on Tues Nov. 13.
  • November 16 – Methodologies and Tools to Evaluate the Financial Impact of Climate-related Risks and Opportunities, Milan, Italy: Nathalie Borgeaud will present Four Twenty Seven's methodology to assess physical climate risk in financial portfolios during this workshop.
  • November 27 - Risk Awards Gala, London, UK. Emilie Mazzacurati and Frank Freitas will join for the longest-running and most prestigious awards for firms and individuals involved in the global derivatives markets and in risk management.
  • November 26-28 – UNEP FI Global Roundtable & Climate Finance Day, Paris, France: Emilie Mazzacurati, Frank Freitas and Nathalie Borgeaud will participate in these events dedicated to mobilizing the financial sector to create a sustainable financial system.
  • December 4 – Investment Without Displacement: Solutions for Equitable, Healthy and Vibrant Communities, Los Angeles, CA: Manager Kendall Starkman will present data on climate risk in real estate during a panel on climate change's impact on housing markets. Invite-only.
  • December 5-6 – RI Americas, New York, NY: Hear Frank Freitas speak on a panel about climate risk in real estate markets and visit the Four Twenty Seven booth.
  • December 10-14 – AGU Fall Meeting, Washington, DC: Director of Analytics, Nik Steinberg, will present on the California Heat Assessment Tool at this annual meeting of climate scientists.
  • January 6-10 – 99th AMS Annual Meeting, Phoenix, AZ: Senior Data Analyst, Josh Turner, will present a poster on the California Heat Assessment tool during this convening of meteorologists and climate scientists.
  • January 7-10 NCSE 2019 Annual Conference, Washington, DC: Director of Advisory Services, Yoon Kim, and Strategic Advisor, Josh Sawislak, will facilitate sessions on private sector roles in building community resilience and on climate-ready infrastructure, respectively.
  • February 12 – Investing for Impact, New York, NY: Hear Emilie Mazzacurati present on physical climate risks and opportunities at this annual convening hosted by The Economist.
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Copyright © 2018 Four Twenty Seven, All rights reserved.
Four Twenty Seven sends a newsletter focused on bringing climate intelligence into economic and financial decision-making for investors, corporations and governments. Fill in the form below to join our mailing list. As data controller, we collect your email address with your consent in order to send you our newsletter. Four Twenty Seven will never share your mailing information with anyone and you may unsubscribe at any moment. Please read our Terms and Conditions.
 

Our mailing address is:
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Newsletter: Are we doing enough? The state of climate adaptation in the US

 

 

Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss a review of U.S. climate adaptation and a close look at opportunities to build resilience through collaboration.

In Focus: The State of Climate Adaptation


Are we doing enough? How is the field of adaptation developing in the United States? Rising to the Challenge, Together: A Review and Critical Assessment of the State of the US Climate Adaptation Field explores the field’s development, potential and challenges. Commissioned by the Kresge Foundation, the report was co-authored by Susanne C. Moser of Susanne Moser Research and Consulting, Joyce Coffee of Climate Resilience Consulting, and Aleka Seville in her capacity as Four Twenty Seven’s Director of Community Adaptation in 2017.

Based on a literature review and dozens of interviews with thought leaders and adaptation practitioners, this report finds that the emerging field of climate adaptation must continue to develop with increased urgency. Communities across the country are experimenting with adaptation, with the support of a growing knowledge base and suite of tools, and boosted by new actors including utility managers, private sector interests and philanthropy.

However, the field is largely crisis-driven and fails to adequately address the social equity aspects of adaptation choices, that should ensure all people benefit regardless of socio-economic status or race.  It also lacks a shared vision, consistent funding and agreed upon best practices among other shortcomings, the report found. The report recommends aggressive acceleration of adaptation planning, coordination across jurisdictions, and implementation among advocates, planners, and funders. Read more.

Read the Report

The United States of Climate Change


With examples from every state in the U.S. this United States of Climate Change” feature from The Weather Channel displays the vast, dire and varied implications of climate change. It also documents communities’ efforts to adapt to a rapidly changing world. From new species of pathogen-hosting mosquitoes flourishing in Mississippi to “flash droughts” threatening barley in small Montana towns that depend on selling the crop to beer brewers, there is a plethora of local stories highlighting cultural, social and economic impacts of climate change. The Washington Post reports on the thinking behind Weather.com’s framing of this feature.

For more examples of climate change’s local impacts, read about Four Twenty Seven’s work examining the impacts of climate change on Delaware’s workforce and our analysis of extreme heat and public health in Denver.

Working with businesses to build community resilience

As increasing numbers of climate disasters cause over $1 billion in damages, the economic impacts of these events are widespread and ongoing. California wine-growers will feel the financial effects for years as they work to rebuild their vineyards, while the communities that depend on this economy will also feel these consequences. Four Twenty Seven’s blog post “Working with Businesses to Build Community Resilience” outlines opportunities for local governments and businesses to support each other in adaptation efforts.

Businesses and communities depend on each other and have important roles to play in collaborative climate change preparation. While businesses rely on resilient infrastructure and city services, they can also support community recovery efforts and participate in planning. Likewise, local governments can create collaborative networks, share resources and engage businesses. Read more.

Read the Blog

Resources on Engaging Businesses in Adaptation

For more insight on corporate adaptation read the Caring for Climate report, The Business Case for Corporate Adaptation, which highlights the benefits for businesses to build their awareness of climate risk and opportunities for policymakers to encourage corporate adaptation.

Will Amazon HQ2 consider resilience?

Eager for an opportunity for up to 50,000 jobs and a potential $5 billion in investment, twenty cities received the anticipated advancement to the list of finalists for Amazon’s HQ2 last month. Among this short list is the Southeast Florida bid, a collaboration between Broward, Miami-Dade and Palm Beach Counties.

These counties have experience working together through the Southeast Florida Regional Climate Change Compact, which also includes Monroe County. The compact’s Regional Climate Action Plan emphasizes the importance of regional strategies to build resilient economies and communities. Now the benefits of this collaboration are becoming increasingly clear, as many of the regional compact’s priorities, such as addressing sea level rise and improving infrastructure, are also important for bolstering economic success by helping to attract Amazon and other businesses to the region.

Inside the Office at Four Twenty Seven

Meet the Team: Lindsay Ross

Four Twenty Seven is delighted to welcome Lindsay Ross, who joins the team as a Senior Analyst, Macroeconomic Risks. Lindsay analyzes the economic impacts of climate change on corporations and financial markets. She studies at the Johns Hopkins School of Advanced International Studies (SAIS), focusing on Energy, Resources, and the Environment as well as International Finance and Economics. Previously she worked for the U.S. International Trade Commission, assisting with research on the impacts of international trade on the U.S. economy.

Upcoming Events

Join the Four Twenty Seven team in the field at these upcoming events:

  • February 13: Climate Risk: From Assessment to Action, Washington, DC: CEO, Emilie Mazzacurati, will speak on a panel at this workshop hosted by the Inter-American Development Bank
  • February 28 – March 2: Climate Leadership Conference, Denver, CO: Climate Adaptation Senior Analyst, Kendall Starkman, will attend this gathering of climate, sustainability and energy professionals.
  • March 6: Inaugural Conference: Northern European Partnership for Sustainable Finance (NEPSF), London, UK. Emilie Mazzacurati will join the launch of this new Partnership to support sustainable finance.
  • June 18-21: Adaptation Futures 2018, Cape Town, South Africa: Director of Advisory Services, Yoon Kim, will facilitate a session at this conference, exploring integrating climate risks into infrastructure investment decisions.
  • August 28-29: 3rd California Adaptation Forum, Sacramento, CA: Save the date for this opportunity to join over 600 climate leaders in workshops, sessions and networking around adaptation action in California.

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Four Twenty Seven sends a newsletter focused on bringing climate intelligence into economic and financial decision-making for Fortune 500 companies, investors, and government institutions.Our mailing address is:
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Newsletter: New Report on Climate Risk in Infrastructure Investments

 

 

Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss funding opportunities for local adaptation and a closer look at resilient infrastructure! 

In Focus: Infrastructure Resilience

Lenders’ Guide: Considering Climate Risk in Infrastructure Investments


Climate change poses multifaceted physical risks for infrastructure investors, including decreasing revenue due to operational capacity limits, increasing maintenance costs from physical damage, decreasing asset value, and increasing liability and debt. Four Twenty Seven, with our partners Acclimatise and Climate Finance Advisers, published today the Lenders’ Guide for Considering Climate Risk in Infrastructure Investments.” This new report provides banking institutions and infrastructure investors with a brief introduction to the ways that physical climate risks can affect infrastructure investment. The guide includes ten illustrative “snapshots” describing climate change considerations in example sub-industries such as commercial real estate, power plants, and hospitals.

Read Lender’s Guide

Built to Last

The Union of Concerned Scientists’ white paper, Built to Last: Challenges and Opportunities for Climate-Smart Infrastructure in California, responds to Executive Order B-30-15, which mandates that state agencies plan for climate change. The paper makes suggestions for policies that support resilient infrastructure with co-benefits for human and ecosystem health and mitigation. Recommendations cover tools and standards, financial assessments and institutional capacity building.

Read the White Paper

How to Incorporate Climate in Local Planning

Local Adaptation Planning: Four Twenty Seven’s Process Guide

United States cities face increasing challenges from climate change impacts and increasing legislation requiring that they prepare for these impacts. Through our work assisting eight cities in Alameda County in responding to California’s Senate Bill No. 379 Land Use: General Plan: Safety Element (Jackson) (SB 379), Four Twenty Seven developed a streamlined process to support local governments’ efforts to integrate climate risks into key planning efforts, such as local hazard mitigation plans, general plans and climate action plans. SB 379 requires cities and counties in California to incorporate adaptation and resilience strategies into General Plan Safety Elements and Local Hazard Mitigation Plans starting in 2017.

Four Twenty Seven’s Process Guide for Local Adaptation Planning outlines two steps for effective climate adaptation planning: 1) a hazard assessment to determine vulnerability and 2) identification of appropriate adaptation options.

Read the Process Guide

“Planning and Investing for a Resilient California” – Guidance Document

As fires and floods rage up and down the coast and lives and livelihoods are lost and damaged, the call for resilience feels increasingly urgent each day. A resilient California is a state with strong infrastructure, communities and natural systems that can withstand increasingly volatile conditions.
To support the implementation of  Executive Order B-30-15, mandating that state agencies plan for climate change, the California Governor’s Office of Planning and Research released “Planning and Investing for a Resilient California,” a guidance document outlining strategies to include climate adaptation in decision-making. Four Twenty Seven CEO Emilie Mazzacurati served on the Technical Advisory Group that wrote the report.

The guide outlines four steps for integrating climate into decisions: characterizing climate risk, analyzing climate risk, making climate-informed decisions and monitoring progress. Ending with a closer look at investing in resilient infrastructure, the document provides actionable guidelines for building a resilient California.

Read the Guidance Document

Climate Change Threatens City Credit Ratings

“What we want people to realize is: If you’re exposed, we know that. We’re going to ask questions about what you’re doing to mitigate that exposure,” Lenny Jones, a managing director at Moody’s was quoted by Bloomberg. “That’s taken into your credit ratings.” Jones is explaining the thinking behind a recent Moody’s report that urged cities and states to act upon their climate risk or face potential credit downgrades. Moody’s is not the only credit agency in this conversation, as others including Standard & Poor’s are increasingly publicizing their inclusion of climate risk in credit ratings.These steps by rating agencies may provide the extra impetus that municipalities need to examine their climate risks and take action.

Four Twenty Seven conducts research on urban resilience to climate risks and offers real asset screening and portfolio analytics to help investors identify and respond to risks in their portfolios.

Funding Opportunities and Finance Guide

Resilient by Design Finance Guide

The recently published Finance Guide for Resilient by Design Bay Area Challenge Design Teams, for challenge participants, outlines traditional funding resources for infrastructure in California and describes other potential funding opportunities that have not traditionally been used for this purpose. It also highlights requirements particular to this state.

Funding Opportunities

The California Ocean Protection Council (OPC) is accepting grant proposals for funding from Proposition 1. Priorities for this funding include projects that address sea level rise, benefit marine managed areas, support fishery infrastructure that protects ecosystems, and reduce the risk of communities to hazardous sites threatened by flooding. Find all relevant information on OPC’s Prop 1 website.

The Governor’s Office of Emergency Services (Cal OES) has initiated a Hazard Mitigation Grant Program for federally recognized tribes, local governments, nonprofits and state agencies to implement FEMA approved Local Hazard Mitigation Plans.Deadline: January 30, 2018.

Inside the Office at Four Twenty Seven

Meet Andrew Tom, Business Data Analyst

Four Twenty Seven is proud to announce the addition of Andrew Tom to our team. Andrew supports the business data extraction process used in analyzing climate risk for companies and financial markets.

Previously, Andrew led development of various data science projects and prototypes involving machine learning techniques, natural language processing and graph networks. He has also worked in the California State Legislature and in nonprofit leadership capacities.

Upcoming Events

Join the Four Twenty Seven team in the field at these upcoming events:

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Newsletter: Commitments.

 

 

Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month don’t miss a recap on critical developments from events on climate finance in France and the climate risk report by French pension fund FRR!

From the desk of Emilie

The One Planet Summit organized by President Macron on December 12 to mark the second anniversary of the Paris Agreement offered a stark reminder of how little progress has been made towards altering the course of runaway emissions globally. In Macron’s words: we’re losing the battle. Every day, new scientific research demonstrates that sea level rise and ice melt will reshape the planet in ways humans have never experienced before. Every day, news breaks of storms, floods, or wildfires that break historical records and devastate lives and livelihoods globally. And global emissions are on the rise again.

Yet the One Planet Summit, and the preceding Climate Finance Day, was also an inspiring display of commitments and signaled a shift in how global financial institutions apprehend climate change. Over the course of the past few years, climate change has gone from a marginal topic to a boardroom concern. The reality is just starting to settle in that a 2-degree world will bring massive disruption to the earth’s meteorological system, and that economic actors need to understand the implications of these massive changes on the global economy, on assets and corporate value chains, and on financial markets.Some of the most striking commitments announced on December 12 include:

  1. Funding for climate adaptation: $3 billion of public-private partnership money to rebuild the Carribean, $650 million from the Gates foundation and other philanthropic institutions to support small-holder farmer adaptation, $300 million into the Land Degradation Neutrality Fund to restore deserted land, and more. While these amounts fall well short of the hundreds of billions of dollars needed for adaptation, they send a signal that adaptation is starting to rise on the agenda.
  2. Integration of climate change into business and financial decisions: Over two hundred companies publicly announced their support for the TCFD recommendations. France and Sweden committed to implementing regulation to support TCFD reporting. The TCFD also announced a Knowledge Hub, hosted by the Climate Disclosure Standard Board (CDSB) in London, to help disseminate best practices and guidance on climate risk disclosures. Last but not least, eight of the largest sovereign wealth funds in the world, worth $15 trillions in assets, committed to working together to integrate climate considerations into investment decisions.
  3. Taking the full measure of risk: French Central Bank Governor François Villeroy de Galhau announced a new network of eight central banks committed to reinforcing green finance and understanding the risk from climate change on the financial system, emphasizing that “climate stability is, in the long run, part of the determinants of financial stability.”

These commitments, and the more quiet effort of many companies and investors to start mapping risk in their portfolio, point to a larger change in how the market views climate change risk, and signals that adaptation and resilience are going to rise on the agenda for both the public and private sector over the coming years. In this context, Four Twenty Seven’s mission becomes even more critical. Our work enables investors and corporations to integrate climate analytics into business and policy decisions – a critical step to catalyze climate adaptation and resilience investments.

Our commitment for 2018 is to work tirelessly to improve the transparency and quantification of climate risk in financial markets, and to support responsible corporate adaptation and opportunities for public and private institutions to work together to build resilience in the global economy and for the most vulnerable communities.

Wishing you a very happy holiday season,

Emilie and the Four Twenty Seven team

In Focus: French pension fund FRR’s climate risk disclosures under Art. 173

France has been heralded as a global leader on climate risk disclosure with the passage of the Energy Transition Law, in which Article 173 mandates financial institutions to disclose their exposure to both transition and physical climate risk. Pension fund Fonds de Réserve pour les Retraites (FRR) responded to this legislation with an extensive report on the risks that climate change poses for its portfolios. Four Twenty Seven contributed the analysis of physical risk, conducting a sector analysis of FRR’s portfolios to identify exposure to physical climate risk by sector.

Four Twenty Seven opens Paris office, joins flagship initiative Finance for Tomorrow

Four Twenty Seven is proud to announce its new office in Paris and to join  Finance for Tomorrow, the flagship initiative from Paris Europlace to promote France as a world leader in green finance. Four Twenty Seven is one of the first 50 members of this new French initiative, which promoted 50 ClimActs from its members during Climate Finance Day. Finance for Tomorrow’s scope of work includes promoting financial risk disclosures, continuing France’s momentum on climate risk reporting.

Our European office is now opened in Paris, France:

427 France SAS
2, rue du Helder
75009 Paris, France
Tel: (+33).09.75.18.97.12

GARI releases Investor Guide

The Global Adaptation & Resilience Investment Working Group (GARI) released its Investor Guide to Physical Climate Risk and Resilience yesterday. Serving as a simple introduction to physical climate risk, the guide emphasizes ways that investors can face risks and seize opportunities posed by climate change. It highlights three ways to do so: investigate the physical impacts of climate change on asset values, require asset managers and advisors to consider climate risk and allocate capital to climate-resilient investment. Four Twenty Seven CEO, Emilie Mazzacurati was a lead author on the Investor Guide.

Upcoming Events

Join the Four Twenty Seven team in the field at these upcoming events:

  • January 7-11: AMS Annual Meeting, Austin, TX: Climate Data Analyst Josh Turner will attend this yearly meeting of the weather, water and climate community.
  • January 23-25: NCSE 18th National Conference and Global Forum on Science, Policy and the Environment, Washington, DC: Director of Advisory Services, Yoon Kim, will attend this conference on The Science, Business, and Education of Sustainable Infrastructure, to facilitate a session exploring how infrastructure banks and other investors can integrate climate risks in investment decision-making.
  • February 28-March 2: 2018 Climate Leadership Conference, Denver, CO: Meet with Senior Analyst Kendall Starkman at this annual milestone on climate leadership for U.S. corporations and cities.

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Newsletter: Climate Risk in Financial Portfolios, COP23 and Workforce Adaptation

Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss our white paper on physical climate risk in equity portfolios, French President Macron’s op-ed on climate finance, and our policy recommendations on protecting workers from climate health impacts. Also, be sure to check out our new website!

In Focus: Physical Risk in Financial Portfolios

Figure 4. Extreme Precipitation Risk for Facilities from France’s Benchmark Index CAC40

Four Twenty Seven and Deutsche Asset Management jointly released today at COP23 a white paper featuring a new approach to climate risk management in equity portfolios. The white paper, Measuring Physical Climate Risk in Equity Portfolios, showcases Four Twenty Seven’s Equity Risk Scoring methodology, which identifies hotspots in investment portfolios by assessing the geographic exposure of publicly-traded companies to climate change. Our methodology tackles physical risk head on by identifying the locations of corporate sites around the world and then the vulnerability of these corporate production and retail sites to climate change, such as sea level rise, droughts, flooding and tropical storms, which pose an immediate threat to investment portfolios.

Deutsche Asset Management is leveraging Four Twenty Seven’s Equity Risk Scores to satisfy institutional investors’ growing desire for more climate resilient portfolios and design new investment strategies. “This report is a major step forward to addressing a serious and growing risk that investors face. To keep advancing our efforts, we believe the investment industry needs to champion the disclosure of once-in-a-lifetime climate risks by companies so we can assess these risks even more accurately going forward,” said Nicolas Moreau, Head of Deutsche Asset Management.

Read the white paper

France on the Forefront of Climate Finance

French President Emmanuel Macron emphasizes his support for the Taskforce on Climate Related Financial Disclosure’s (TCFD) recommendations in an op-ed published on Global Markets. Macron also highlighted the importance of climate finance mechanisms, such as green bonds, and the need for private participation in financing climate action.

 

France has been heralded as a global leader on climate risk disclosure with the passage of the Energy Transition Law, including Article 173, which includes a requirement for financial institutions to disclose their exposure to physical climate risk. Four Twenty Seven is working with French public pension funds and screening equity portfolios to support reporting efforts in compliance with Art. 173.

Adaptation: Safeguarding Worker Health & Safety

Four Twenty Seven co-authored an article titled “Safeguarding Worker Health and Safety from a Changing Climate: Delaware’s Climate-Ready Workforce Pilot Project,” with the Delaware Department of Natural Resources and Environmental Control. Through interviews, surveys, and policy analysis assessing the climate resilience of existing worker health and safety policies, the authors examine the preparedness of five state agencies for climate impacts. The article highlights particular risks faced by vulnerable workers and offers policy recommendations for enhancing resilience to ensure the safety and well-being of agency staff.

Visit our website for a detailed presentation on the Delaware Climate-Ready Workforce Pilot Project, the summary report, and more information about our adaptation planning and policy consulting.

International Climate Policy in the Spotlight

Four Twenty Seven’s Director of Analytics, Nik Steinberg’s panels at COP23

Measuring Progress on Climate Adaptation and Resilience: From Concepts to Practical Applications
Nov. 7, 3:00 – 4:30pm, Meeting Room 7 (150)Director of Analytics, Nik Steinberg will join a panel of experts discussing adaptation measurement, focusing on indicators and metrics to inform and assess resilience efforts. This side event will be hosted by the International Development Research Centre (IDRC), Asian Institute of Technology (AIT), McGill University and the University of Notre Dame.

Resilience as a Business: How the Private Sector Can Turn Climate Risk into Business and Investment  Nov. 10, 5:30 – 8:00pm, Hilton Bonn

Bringing together corporate stakeholders and private investors, this event will explore the private sector’s pivotal role in mainstreaming adaptation and driving the resilience agenda.

Speakers include: Representative from Ministry of Economy, Trade, and Industry of Japan; Mari Yoshitaka from Mitsubishi UFJ Morgan Stanley Securities Co. Ltd.; Jay Koh from Lightsmith Group and GARI;  Nik Steinberg from Four Twenty Seven; and Amal-Lee Amin from Inter-American Development Bank. For more information contact proadapt@fomin.org.

Tool: Monitoring Progress on the Paris Agreement


This interactive new platform developed by the The World Resources Institute combines climate policy data with interactive graphics to help analysts and policy makers stay up to date on nationally determined contributions (NDCs), greenhouse gas emissions by sector and more. Climate Watch allows users to sort data based on various indicators, examine connections between NDCs and Sustainable Development Goals, and dive into data on specific nations.

Inside the Office: What’s New at Four Twenty Seven

We Have a New Website!

With streamlined navigation and updated visuals, our new website brings our story alive and allows for a more engaging user experience.
Visit the Solutions page to explore our advisory services and subscription products, including Equity Risk Scores, Portfolio Analytics and Real Asset Screening.
Check out the Insights section for our perspectives on climate resilience, climate risk reporting, adaptation finance, climate science and recent events.

Meet Pete Dickson, Director of Business Development

Four Twenty Seven is proud to announce the addition of Pete Dickson to our team. As the Director of Business Development, Pete is responsible for driving growth for our subscription products, with a focus on financial institutions.
Pete brings more than 20 years of experience in institutional sales, trading, and business development. He’s worked with both the buy-side and sell-side to develop and execute business plans and build revenue, products, and services. Pete has worked with some of the largest financial services and asset management firms in the US and abroad.

Upcoming Events

Join the Four Twenty Seven team in the field at these upcoming events:

  • November 7-17  COP23, Bonn, Germany: Join Director of Analytics Nik Steinberg at side events at the UNFCCC’s 23rd Conference of Parties (See above for details).
  • November 12-15  Airports Going Green, Dallas, TX: Director of Advisory Services Yoon Hui Kim will present on corporate climate resilience planning for airports and transportation infrastructure.
  • November 16-17 Berkeley Sustainable Business and Investment Forum, Berkeley, CA: COO Colin Shaw will attend this event sponsored by the Berkeley-Haas Center for Responsible Business and the Berkeley Law School
  • November 30 Roundtable: Investing with Impact, San Francisco, CA: CEO Emilie Mazzacurati will speak at a roundtable organized by Deutsche Asset Management about the use of ESG data in portfolio investing (by invitation).
  • December 6-7  RI Americas 2017, New York, NY: CEO Emilie Mazzacurati will present on Physical Climate Risk in Equity Portfolios (Wednesday Dec 6 at 2pm) and meet with Colin Shaw, Pete Dickson and Katy Maher at the Four Twenty Seven booth.
  • December 11  Climate Finance Day, Paris, France: CEO Emilie Mazzacurati will join this high profile event sponsored by the French Ministry for the Economy and Finance.
  • December 11-15  AGU Fall Meeting, New Orleans, LA: Climate Data Analyst Colin Gannon will join the Earth and Space Science community to present a poster on climate modeling.

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Newsletter: COP23 Preview – Climate Risk Disclosure and Adaptation Finance

Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss the highlights from the UN Principles for Responsible Investment conference and our preview of COP 23 in Bonn next month!

In Focus: A New Way to Fund Resilience


Re:focus Partners’ new report, A Guide to Public-Sector Resilience Bond Sponsorship, highlights the potential of resilience bonds to decrease both financial and physical disaster risks. By partnering with insurance agencies and issuing bonds to fund projects that are targeted at reducing specific vulnerabilities, such as flooding, city and state governments can make their communities more resilient while saving money. The report explains hazard-specific projects applicable for resilience bonds and outlines potential strategies for partnerships. Watch Four Twenty Seven CEO Emilie Mazzacurati speak on resilience finance at a Proadapt Symposium on Climate Risk and Investment.

Mainstreaming Climate Risk Disclosures

 

Climate risk reporting was at the heart of the Principles for Responsible Investment (PRI) in Person conference in Berlin. Nicolas Moreau, head of Deutsche Asset Management, encouraged investors to emphasize physical risk assessment in their portfolios in a keynote presentation featured above. Four Twenty Seven is proud to partner with Deutsche Asset Management to power new investment strategies focused on physical risk mitigation. Read about Four Twenty Seven’s work evaluating physical risk and supporting resilience in the financial sector. At the conference, PRI also announced the Climate Action 100+ initiative in collaboration with Asia Investor Group on Climate Change (AIGCC), Ceres, Investor Group on Climate Change and Institutional Investors Group on Climate Change (IIGCC).The five-year initiative will engage investors to urge top greenhouse gas emitters to decrease emissions, commit to climate risk disclosure and improve corporate governance related to climate change.

Looking Over the Horizon


The new C2ES report, Beyond the Horizon: Corporate Reporting on Climate Change, offers insight into the Task Force on Climate-related Financial Disclosure’s (TCFD) final recommendations. The report praises the recommendations’ balance, noting their appeal to investors needing more information and to companies needing flexibility. Read our analysis of the TCFD Recommendations and applicable regulation in Europe.

Early Movers


The Climate Disclosure Standards Board’s announced ten companies committed to implementing the TCFD’s recommendations within three years. This emphasis on climate risk disclosure allows for the best use of capital and supports the transition to a resilient, low-carbon world. This commitment also sets companies apart in the eyes of investors, improves their own resilience and guarantees them support from CDSB.

The Costs of Climate Change

Billion-dollar Weather Events


Recent storms join a landscape that’s increasingly dotted with widespread costly disasters. National Geographic’s Billion-dollar Weather Chart displays these events as semi-circles, color-coded by event type and sized according to the economic damage caused, and serves as a comprehensive calendar of decades of extreme weather events.

Thought Leadership: Economic Impacts of Extreme Weather Events

Four Twenty Seven advisor, Kate Gordon urges leaders to plan for climate change and build for resilience in her commentary on CNBC: Evacuating millions is not an ‘effective or sustainable’ response to hurricane threats.

Solomon Hsiang from UC Berkeley and Trevor Houser from Rhodium Group emphasize the importance of giving financial support to Puerto Rico in their New York Times op-ed, Don’t Let Puerto Rico Fall Into an Economic Abyss.

In his opinion piece in the Washington Post, What’s behind today’s job report? Hurricanes, low unemployment, wage growth and climate change, Jared Bernstein discusses the connections between storms and a low job report.

Four Twenty Seven at COP 23

Join Nik Steinberg, Four Twenty Seven’s Director of Analytics, at these events in Bonn, Germany for COP23.

Resilience as a Business: How the Private Sector Can Turn Climate Risk into Business and Investment  Nov. 10, 5:30 – 8:00pm, Hilton Bonn

Bringing together corporate stakeholders and private investors this event will explore the private sector’s pivotal role in mainstreaming adaptation and driving the resilience agenda.

Speakers include: Representative from Ministry of Economy, Trade, and Industry of Japan; Mari Yoshitaka from Mitsubishi UFJ Morgan Stanley Securities Co. Ltd.; Jay Koh from Lightsmith Group and GARI;  Nik Steinberg from Four Twenty Seven; and Amal-Lee Amin from Inter-American Development Bank. For more information contact proadapt@fomin.org

Measuring Progress on Climate Adaptation and Resilience: From Concepts to Practical Applications Nov. 7, 3:00-4:30pm, Meeting Room 7 (150)

Director of Analytics, Nik Steinberg will join a panel of experts discussing adaptation measurement, focusing on indicators and metrics to inform and assess resilience efforts.  This side event will be hosted by the International Development Research Centre (IDRC), Asian Institute of Technology (AIT), McGill University and the University of Notre Dame.

The costs of extreme climatic events for the financial sector: how to manage exposure? November 10, French Pavilion

Director of Analytics, Nik Steinberg will speak on a panel hosted by the Institute for Climate Economics (I4CE), discussing the financial impacts of extreme weather events and strategies to build resilience.

Finance and Resilience Side Events

Climate Action in Financial Institutions: Mainstreaming the Paris Agreement in the Financial Sector Thursday Nov 9, 3:00-4:30pm, Meeting Room 7 (150)
Hosted by the Institute for Climate Economics (I4CE), Corporacion Andina de Fomenta (CAF) and European Investment Bank (EIB).

Excellence in Climate Adaptation Nov 9, 3:00-4:30pm, Meeting Room 10 (200)
United by their vision to unite global adaptation projects, the Netherlands, Japan and UN Environment created The Global Center of Excellence on Climate Adaptation (GCECA), which will co-host this event with the Red Cross Red Crescent Climate Centre.

Innovative Climate Finance Strategies and Instruments by and for Climate-Vulnerable Countries Monday Nov 13, 4:45-6:15pm, Meeting Room 9 (100)
Hosted by the Institute for Climate and Sustainable Cities (ICSC), Bangladesh Centre for Advanced Studies (BCAS) and the Philippines.

Role of Standards and Accreditation to Support Non-state Actors in Light of Paris Agreement and SDGs Friday Nov 17, 1:15-2:45pm, Meeting Room 1 (150)
Hosted by the International Organization for Standardization (ISO) and International Accreditation Forum Inc. (IAF).

Four Twenty Seven: Meet the Team!

Katy Maher, Manager

Four Twenty Seven is proud to announce the addition of Katy Maher to the team. From our new location in Washington, D.C., Katy works closely with Four Twenty Seven’s public and private sector clients to conduct vulnerability assessments, develop resilience strategies and facilitate stakeholder workshops.

Katy brings more than ten years of experience supporting climate change impacts and resilience projects at international, federal, state and local levels. Her expertise also includes convening public and private sector organizations to facilitate discussion and planning on climate resilience. Prior to joining Four Twenty Seven, Katy coordinated resilience projects at the Center for Climate and Energy Solutions (C2ES) and ICF International.

Read more of Katy’s experience

Career Opportunities

Four Twenty Seven continues to grow! We are hiring for the following positions:

* Senior Analyst, Financial Climate Risk
* Business Development Manager (Paris)
* Business Data Analyst

See the position descriptions.

Upcoming Events

Join the Four Twenty Seven team in the field at these upcoming events:

  • October 10-13  SOCAP 2017, San Francisco, California: Meet with Senior Analyst Kendall Starkmann and Director of Advisory Yoon Kim to discuss impact investments and adaptation finance.
  • November 4-8  APHA 2017, Atlanta, Georgia: Director of Analytics Nik Steinberg will discuss how climate change affects health and how climate science can support decision-making in the public health sector at the APHA’s annual meeting and expo.
  • November 7-17  COP23, Bonn, Germany: Join Director of Analytics Nik Steinberg at side events at the UNFCCC’s 23rd Conference of Parties (See above for details).
  • December 6-7  RI Americas 2017, New York, New York: CEO Emilie Mazzacurati and COO Colin Shaw will attend the annual conference where Four Twenty Seven will have a booth and Emilie will present on Physical Climate Risk in Equity Portfolios.
  • December 11-15  AGU Fall Meeting, New Orleans, Louisiana: Director of Analytics Nik Steinberg will be joining the Earth and Space Science community to discuss recent research trends and participate in a mix of presentations, lectures and networking opportunities.

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Newsletter: How will we pay for climate adaptation?

 

 

Extreme Storms Highlight Need for Disaster Preparation and Recovery Financing

The need for climate resilience financing could not be more visible than it has been in recent weeks. While Hurricane Harvey has weakened after dumping unprecedented amounts of rain on southeast Texas, residents in Houston and along the Gulf Coast are looking at a long recovery from widespread flooding. Around the world, monsoons in Bangladesh, India, and Nepal have affected over 41 million people, killing at least 1,000. These examples highlight the rising costs of intensifying extreme weather events.
Yet, funding and policies to aid preparation for and recovery from disasters are not keeping up. At the U.S. federal level, the National Flood Insurance Program is in debt (in part from payouts following Hurricane Katrina and Superstorm Sandy), and is facing a deadline for reauthorization. As it stands, the Program’s current access to funds is unlikely to be enough to cover the impending claims from Harvey’s damage. One proposal for restructuring the program would make repeatedly-flooded homes ineligible for federal coverage, even though 1.3 million households in the U.S have made multiple claims since 1998, and Houston specifically has seen a 500-year flood in each of the last three years. The storms have created a new urgency for lawmakers to address how cities are rebuilt for climate resilience.

DC Water’s Environmental Impact Bond to Finance Green Infrastructure

With calls from the federal government for states and cities to take on a greater portion of disaster relief costs, Washington, DC’s Water and Sewer Authority (DC Water) issued the country’s first Environmental Impact Bond in September 2016 to construct green infrastructure to manage stormwater runoff and improve water quality. Under the $25 million bond, payments are tied to performance: if the green infrastructure reduces stormwater runoff by more than 41.3% during its first 12 months, DC Water will pay investors Goldman Sachs and Calvert Foundation a one-time additional payment of $3.3 million. However, if runoff reductions are less than 18.6%, investors will make a one-time Risk Share Payment of $3.3 million. Read the US Environmental Protection Agency’s summary of DC Water’s Environmental Impact Bond.

San Francisco’s Innovative Tax for Flood Protection and Wetlands Restoration

In the San Francisco Bay Area, voters approved the San Francisco Bay Clean Water, Pollution Prevents, and Habitat Restoration Measure (Measure AA) in June 2016, levying a $12 parcel tax to support programs protecting the wetlands and shoreline around the Bay. This is the first parcel tax in California history to apply throughout a multi-county region, and serves as a useful example of how such a tax can be used to address sea level rise issues through nature-based solutions. Measure AA will raise approximately $500 million over 20 years for the San Francisco Bay Restoration Authority to grant in support of projects that will implement wetlands restoration efforts that provide multiple benefits including flood protection. Potential projects for the Restoration Authority to fund include the creation of sea level rise resilient tidal marshes, shorelines, and sea walls around the Bay. The first round of grants will be announced in early 2018, with the hope that these funds can be leveraged for additional state and federal funding. Read more about the San Francisco Bay Restoration Authority.

Promoting Investments in Adaptation Through Technology Transfer

To demonstrate to market and financial institutions the viability of climate resilience investments in Tajikistan, the European Bank for Reconstruction and Development has partnered with the Climate Investment Funds’ Pilot Program for Climate Resilience to implement the Tajikistan Climate Resilience Financing Facility (CLIMADAPT). CLIMADAPT offers loans through local partner financial institutions to businesses, farmers and households to develop and use technologies to improve water and energy efficiency and land management practices. Projects under CLIMADAPT promote building of climate-resilient supply chains, and include modernization of technologies designed to address Tajikistan’s main climate change-related challenges of water and energy shortage, and increased soil erosion. Learn more about CLIMADAPT.

The Role of Blended Finance in Promoting Climate Resilience

 

At the PROADAPT Symposium in April 2017, Emilie Mazzacurati moderated the panel “The Role of Blended Finance in Promoting Climate Resilience,” focused on methods to create new funding mechanisms to leverage public and philanthropic funding to raise private capital for environmentally-beneficial projects. Virginie Fayolle from Acclimatise kicked off the discussion by highlighting how blended finance can be an important way to direct money towards specific projects, locations, and sectors that might not otherwise see private sector interest.Stephen Morel from OPIC noted, however, that blended finance brings certain challenges, thus requiring mechanisms to support private investor engagement in three broad categories: technical assistance, risk underwriting, and market incentives. Stacy Swann from Climate Finance Advisors drew attention to the facts that the more climate resilient a project is the more finance opportunities it is likely to present and that a project that does not take climate risks into consideration probably is not bankable.

 

Joan Larrea from Convergence closed by speaking about externalities and how transactions can have a public good element as well as a financial return. One example was a grant awarded to The Nature Conservancy to help the government of Seychelles, which was extremely indebted but also had a strong interest in protecting its coral reefs and fisheries. By helping to reshape the government’s debt profile and getting returns for their investors, they were also able to extract commitments from the Seychelles to implement certain activities that over time would protect their reefs and designate new protected fishery zones.

Watch the full panel video

Meet The Team: Daniela Vargas Mallard

Yvonne BurgessFour Twenty Seven is proud to welcome Daniela Vargas Mallard as a Senior Analyst. Daniela leverages her dual background in business strategy and environmental sustainability to collaborate in the development of Four Twenty Seven’s products integrating financial, climate and socioeconomic data for investors and corporate users. Her work supports ongoing research, product development, and business strategy, as well as other special projects. Prior to joining Four Twenty Seven, Daniela spent two years as a Business Analyst at McKinsey & Company, where she worked in projects across multiple sectors, ranging from public health to oil and gas, and across geographies, from South Africa to Brazil, with a particular focus on corporate and government strategy.

Learn more about Daniela’s experience.

Join the Team!

Four Twenty Seven is hiring! We are looking for Business Data Analysts and Business Development Managers for Europe and the US: see the position descriptions.

Upcoming Events

Join the Four Twenty Seven team in the field at these upcoming events:

  • September 11-13: EcoAdapt’s Resilience Ecosystem Workshop (by invitation only), Silver Spring, MD: Nik Steinberg, Director of Analytics, will present on Four Twenty Seven’s work on climate and health.
  • September 12-13: AgriFin 2017 Forum, London, United Kingdom: Yoon Kim, Director of Advisory Services,will speak about integrating climate risk into financial decisions at the Financing Low-Carbon Resilience Agriculture global forum hosted by the World Bank.
  • September 18-24: Climate Week NYC 2017, New York, NY: Four Twenty Seven CEO Emilie Mazzacurati will participate to the Global Adaptation and Resilience Investors Working Group (9/18) and the Sustainable Investment Forum (9/19).
  • September 25-27: PRI in Person 2017, Berlin, Germany: Meet with Emilie Mazzacurati to discuss the integration of climate risk in financial markets.
  • September 27-28: Deutsche Asset Management Client Conference (by invitation only), Berlin, Germany: Emilie Mazzacurati will present on Four Twenty Seven’s groundbreaking work on modeling climate risk for public equities.
  • October 10-13: SOCAP 2017, San Francisco, California: Meet with Four Twenty Seven team members to discuss impact investments and adaptation finance.
  • November 7-17: COP23, Bonn, Germany: Join members of the Four Twenty Seven team at side events at the UNFCCC’s 23rd Conference of Parties.

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Newsletter: How to disclose climate risk and opportunities?

 

 


Four Twenty Seven Climate Solutions

TCFD Releases Final Recommendations

The Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) released their final recommendations in late July. The changes to the recommendations reflect the extensive feedback the Tasforce received from the stakeholder engagement process in the past six months. Key changes include:

  • Simplifying the recommended disclosure related to Strategy and scenarios to focus on the resiliency of an organization’s strategy to climate risk and opportunities
  • Establishing a threshold for organizations that should consider conducting more robust scenario analysis to assess the resilience of their strategies.
  • Clarifying that the recommended disclosures related to the strategy and metrics and targets recommendations depend on an assessment of materiality, whereas disclosures on governance and risk management are relevant for all organizations.
  • Updated conceptual map of climate-related risks and opportunities and associated financial impacts.


The recommendations were presented at the G20 summit in Hamburg, Germany last week, with hopes that the world leaders would formally endorse the guidelines. Climate change was high on the agenda for the summit, where all but the United States voiced a strong re-commitment to the goals of the Paris Agreement, and the G20 included by reference the TCFD recommendations in the Climate and Energy Action Plan for Growth.

CEOs Endorse TCFD recommendations

The TCFD final recommendations were endorsed by over 100 CEO’s from a wide range of companies, including large financial institutions like Barclays and Morgan Stanley as well as energy and manufacturing companies like Suez, DuPont, and Unilever. Reactions from a broad range of financial analysts was also positive, noting the need for improvements and wider adoption of climate risk disclosure practices.

A number of initiatives are already under way to think through and plan the implementation of the TCFD recommendations, such as the UNEP FI’s effort with major banks from around the world who have pledged to work towards adopting these recommendations, and put forth actions they see as needed for broader adoption of climate risk reporting.

Further readings:

  • The Economist Intelligence Unit’s  “The Road to Action” report finds that investors, asset managers, and banks are in urgent need of a way to identify and measure how the industry is responding to climate-related risks. It notes that their interviewees widely regard these recommendations as having the clearest mandate to providing possible solutions.
  • Aon’s white paper Financial Regulators Awaken: Prepare to Disclose Climate Risk notes that risk management and analytics is what differentiates the TCFD’s recommendations from many existing standards. “Risk management, including insurance and risk analytics, is given a key role in helping businesses understand and quantify climate risks. The recommendations provide a framework that can enhance risk management, empower corporate strategy, and improve resilience in a fast-changing world.”
  • The 2-Degree Investing Initiative takes a deep dive into corporate disclosures in its forthcoming report “Limited Visibility”, part of their Tragedy of the Horizon program. The report presents the current state of corporate disclosure on long-term risks and long-term forward looking data using analysis of MSCI World companies’ financial disclosures.

Climate Change in the Boardroom: Towards Climate-Competent Boards


What is a climate-competent board, and why does having one matter? Four Twenty Seven CEO Emilie Mazzacurati was invited to speak on exactly that during the Investing in the Age of Climate Change symposium at the University of Oregon. The symposium tackled issues around climate risk, their connection to investment decisions, and the need to understand how these risks can affect an organization’s business in the long-term. Emilie delved into the climate-competent board and presented on the opportunities they provide, and steps to implement climate-competency on a board. Watch the presentation, delivered via webcam.

How Much Will Climate Change Cost in the United States?

A new research article in Science magazine reveals that in the decades ahead, climate change will affect parts of the United States differently. The study found that areas in the Midwest and Southeast will likely suffer more economic harm from climate change with some areas possibly benefiting from the wild winters. The researchers hope to continue working on this study to further provide more specifics in individual areas to help local policymakers prepare for the incoming risks.

Join the Team!

Four Twenty Seven is hiring! We are looking for Business Development Managers (Europe and US), as well as talented analysts with a background in economics, econometrics, and data analysis. See the position descriptions.

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