Do bond ratings reflect governments’ and businesses’ exposure to physical climate change? Founder & CEO, Emilie Mazzacurati, joins the Bond Buyer’s Chip Barnett to discuss physical climate risk for investors, businesses and governments. Emilie describes the financial sector’s growing awareness of material climate risk in their bond and equity portfolios and shares efforts being taken to understand and address these risk. Chip and Emilie also discuss the challenges cities face when striving to adapt to climate impacts, the benefits of building resilience and the interactions between corporate and community resilience.
For more insight on the interactions between climate change, cities and financial risk read our reports on Assessing Exposure to Climate Risk in U.S. Munis and Assessing Local Adaptive Capacity to Understand Corporate and Financial Climate Risks, or listen to our webinar on Building City-level Climate Resilience.
FEBRUARY 19, 2019 – SAN DIEGO, CALIFORNIA – Four Twenty Seven receives Climate Change Business Journal Awards for three climate change risk and resilience projects.
The Climate Change Business Journal (CCBJ) released its 10th annual CCBJ Business Achievement Awards, recognizing outstanding business performance in the climate change industry. CCBJ assesses markets and business opportunities across the emerging climate change industry and acknowledged Four Twenty Seven’s contributions to this field through our global dataset on climate risk in real estate, the development of the California Heat Assessment Tool and our contribution to the EBRD-GCECA initiative on Advancing TCFD Guidance on Physical Climate Risks and Opportunities.
Four Twenty Seven and GeoPhy earned the Technology Merit: Climate Change Risk Modeling and Assessment award for releasing the first global dataset on climate risk exposure in real estate investment trusts (REITs). REITs represent an increasingly important asset class that provides investors with a vehicle for gaining exposure to real estate portfolios. However, real estate is also increasingly affected by risks from climate change. Four Twenty Seven applied its scoring model of asset-level climate risk exposure to GeoPhy’s database of listed REITs holdings to create the first global, scientific assessment of REITs’ exposure to climate risk.
The California Heat Assessment Tool (CHAT) earned the Project Merit: Climate Change Adaptation and Resilience award for its innovative approach to helping public health officials, health professionals and residents understand what changing heat wave conditions mean for them, through a free online platform. CHAT is part of California’s Fourth Climate Change Assessment, a state-mandated research program to assess climate change impacts in California, and was developed by Four Twenty Seven, Argos Analytics, the Public Health Institute and Habitat 7 with technical support from the California Department of Public Health.
The European Bank for Reconstruction and Development and the Global Centre of Excellence on Climate Adaptation initiative on Advancing the TCFD Recommendations on Physical Climate Risks and Opportunities earned the Advancing Best Practices: Climate Change Adaptation and Resilience award. This project culminated in a conference and report building on Taskforce on Climate-related Financial Disclosure (TCFD) recommendations and providing common foundations for the disclosure of climate-related physical risks and opportunities. It identifies where further research or market action is needed so that detailed, consistent, industry-specific guidelines can be developed on the methodology for quantifying and reporting these risks and opportunities. Four Twenty Seven and Acclimatise provided the technical secretariat that led the working groups and authored the report.
January 15, 2019 – 427 REPORT. Building resilient communities and financial systems requires an understanding of climate risk exposure, but also of how prepared communities are to manage that risk. Understanding the adaptive capacity, or ability to prepare for change and leverage opportunities, of the surrounding area can help businesses and investors determine how exposure to climate risk is likely to impact their assets and what the most strategic responses may be. This report outlines Four Twenty Seven’s framework for creating location-specific actionable assessments of adaptive capacity to inform business and investment decisions and catalyze resilience-building.
Every investment, from real assets to corporate initiatives, is inextricably connected to its surrounding community. From flooded or damaged public infrastructure hindering employee and customer commutes to competition for water resources threatening business operations and urban heat reducing public health, the impacts of climate change on a community will impact the businesses and real estate investors based in that community. Thus, evaluating how acute and chronic physical climate hazards will affect local communities and communities’ responses enables investors and corporations to assess the full extent of the risks they face.
This report, Assessing Local Adaptive Capacity to Understand Corporate and Financial Climate Risks, outlines Four Twenty Seven’s framework for capturing a city’s adaptive capacity in a way that’s actionable for corporations seeking to understand the risk and resilience of their own facilities and for investors assessing risk in their portfolios or screening potential investments. The framework focuses on three main pillars: 1) awareness, 2) economic and financial characteristics, and 3) the quality of adaptation planning and implementation. It is informed by social sciences research, recent work by credit rating agencies, and our experience working directly with cities and investors.
While a city’s adaptive capacity plays a key role in determining whether or not exposure to climate hazards will lead to damage and loss, cities are also likely to find that their resilience to climate impacts is an increasingly important factor in attracting business and financing, as adaptive capacity is more frequently integrated into credit ratings and screening processes. It is valuable for both cities to understand how investors are interpreting adaptive capacity and for investors to understand which factors of local adaptive capacity translate into increased resilience and reduced financial loss for their assets.
NOVEMBER 27, 2018 – LONDON, UK – Four Twenty Seven Wins Risk Markets Technology Award for Alternative Data Vendor of the Year for 2019.
Four Twenty Seven was awarded the 2019 Risk Markets Technology Award for Alternative Data Vendor of the Year. The Risk Awards are the longest-running and most prestigious among industry commendations, recognizing leadership in the global derivatives markets and in risk management.
Investors who wish to develop a fully-informed view of their portfolios need forward-looking data on the impacts of climate change on corporations and public issuers that incorporate the most recent developments in climate science. Risk Magazine recognized Four Twenty Seven’s work to fill this void. “Rapid intensification of the effects of both acute climate events like hurricanes and wildfires and chronic effects like sea level rise and increases in temperatures present an increasingly meaningful type of exposure for investors,” said Emilie Mazzacurati, Four Twenty Seven Founder and CEO. “This risk is currently only priced into the market ex post – we see corrections in asset prices in the wake of events only to the extent that their exposure to these events is known.”
Four Twenty Seven helps firms price the risk ex ante by extracting data from global climate models and other scientific datasets to project asset-level risk exposure to a number of hazards, including hurricane-force winds, sea level rise, flooding, heat stress and water stress. Four Twenty Seven’s database of risk exposures, now scores over one million corporate facilities representing 2,000 of the worlds largest companies, combining exposure with detailed data on market and supply chain characteristics.
“Our data is catalyzing change across the financial sector,” said Mazzacurati. “Our analytics help leading investors and corporations understand climate change’s impact on their assets and take steps to reduce this risk by investing in resilience.” Four Twenty Seven’s clients include pension funds, asset managers, corporations, development banks and regulators, who use our analytics to understand risks in their existing portfolios, assess risks of potential asset acquisitions and engage with management teams to build resilience in supply chains and physical assets.
Download the 2019 Risk Markets Technology Awards Announcement.
This webinar on climate risk in real estate presents 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.
Download the slides, including links to resources discussed during the presentations and additional Q&A slides based on the webinar.
As California’s climate warms, residents increasingly endure extreme heat events that adversely impact public health. This exacerbates existing risks and will bring new challenges for different regions in the state, threatening the efficacy of traditional intervention strategies. Current thresholds for heat alerts are based on temperatures that exceed historical statistical thresholds, rather than temperatures that cause public health impacts. These ‘health-neutral’ thresholds may underestimate the health risks for the most sensitive populations. The new California Heat Assessment Tool (CHAT) is based on research that establishes local, health-based thresholds for extreme heat that help public officials, health professionals and residents understand what changing conditions mean for them. CHAT is part of California’s Fourth Climate Change Assessment, a state-mandated research program to assess climate change impacts in California, and was developed by Four Twenty Seven, Argos Analytics, the Public Health Institute and Habitat 7 with technical support from the California Department of Public Health.
Explore CHAT at cal-heat.org. This online tool advances the understanding of what types of heat waves pose public health risks and examines how the frequency and severity of local heat waves are expected to change over time due to climate change.
Read a brief report, The California Heat Assessment Tool: Planning for the Health Impacts of Extreme Heat, that shares key findings from the research and summarizes the data analysis visualized in the tool.
Access the technical report detailing technical methodology and view other projects funded by the California Fourth Climate Change Assessment.
Access the users needs assessment for a detailed explanation of the literature review and interview process that defines the data gap the research team addressed.
Director of Analytics, Nik Steinberg, discusses wildfire risk, impacts and prevention efforts, on the Midday Briefing. Nik explains implications of increasingly frequent and severe wildfires for the insurance industry and homeowners and shares several ideas for adapting to these risks. While fires have always occurred, climate change is changing the landscape of the wildland-urban interface and residents and policy-makers must understand their wildfire risks and implement preventative strategies. The economic implications are huge for utilities, shareholders and communities, but with intentional planning businesses, governments and residents have the opportunity to mitigate loss.