Newsletter: Japan’s Floods Halt Manufacturing

 

 

Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss our analysis of Japan’s recent flooding, a new report on economic climate risk in Australia, and context around other recent extreme weather events.

In Focus: Time and Tides – Flooding in Japan

Four Twenty Seven Analysis


Japan was the inundated by over 70 inches of rain in early July, resulting in significant loss of life and business disruptions. The clouds have since receded, leaving economic damage with long-term implications yet to be understood. However, estimates expect industry losses to be in the billions USD. Destruction was centered in Okayama and Hiroshima, driven by flooding and landslides. Japan’s floods were followed by a deadly heat wave, threatening those left without power after the storm and hindering recovery efforts.

Our latest analysis identifies companies affected by the event based on the location of vulnerable corporate facilities. We find several automobile manufacturers and electronic companies closed facilities during the flooding due to supply chain and labor disruptions. Understanding the ownership and operations of facilities in the damaged areas provides insight into what companies and industries may exhibit downturns in performance over the near term and be vulnerable to similar storms in the future.

Read our Analysis

Responding to Economic Climate Risk in Australia

New Four Twenty Seven report explores calls for increased climate risk disclosure in Australia


Our recent report, Responding to Economic Climate Risk in Australia, explores the connection between climate hazards and financial risks in Australia, sharing examples of corporate adaptation and investor engagement to build resilience.

Regulatory pressure and financial damage are necessitating an increase in physical climate risk disclosure in Australia. The nation’s predominant sectors are also the most exposed to drought and heat stress.

In exercising their own due diligence and assessing the exposure to physical climate risks in their portfolios, investors arm themselves with valuable information on corporate risk exposure which they can leverage to engage with companies around resilience.

Read the Report

Climate Change Contributes to Record Heat

Record-breaking heat around the world


Many areas around the world recently experienced their highest daytime temperatures and warmest lows. These records include Burlington, VT which had it’s warmest recorded low temperature of 80 degrees on July 2. Montreal had its highest recorded temperature of 97.9 degrees on July 2 when around 34 people died. Shannon Ireland set its all-time record of 89.6 degrees on June 28 and Quriyat Oman experienced the world’s warmest recorded low of 109 degrees on June 28.

Climate change threatens public health

Extreme heat threatens human health and economic productivity through impacts on the workforce, power grid and vulnerable populations. The Washington Post explains the connection between climate change and heat waves, and the social and economic challenges they bring. Strong and hot domes of high pressure have become more extreme as the climate warms, bringing heat waves. “While warm summer nights may seem less concerning than scorching afternoons” warmer nighttime lows are dangerous because the body has no respite, the New York Times reports.

Further Reading

Inside the Office at Four Twenty Seven

Four Twenty Seven in the Media

Upcoming Events

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

  • July 18: Summer in the City CRS Investing Summit, New York, NY: Macroeconomic Risk Senior Analyst, Lindsay Ross, will speak on a panel about assessing physical climate risk in investment portfolios at this annual convening of the responsible investment community.
  • July 19: Webinar: Introduction to the California Heat Assessment Tool, 1:30-2:30pm PT: Director of Analytics, Nik Steinberg, will introduce the California Heat Assessment Tool (CHAT) to California public health officials during the CalBRACE webex meeting.
  • August 28-29: 3rd California Adaptation Forum, Sacramento, CA: Join Yoon Kim, Nik Steinberg, Kendall Starkman, Josh Turner, and Natalie Ambrosio at this biennial convening of adaptation professionals. Yoon will moderate a panel on the legal aspects of adaptation finance, Kendall will facilitate a panel on mobilizing climate adaptation through partnerships and Nik will present the California Heat Assessment Tool.
  • September 11: Building Transformational Community and Economic Resilience: San Francisco, CA: Four Twenty Seven will host a side event alongside the Global Climate Action Summit on Sept 11 to discuss the role of investors, businesses and governments in building climate resilience, both in California and abroad. Invite only.
  • September 12-14: PRI in Person, San Francisco, CA: Visit the Four Twenty Seven booth and meet with our team at this annual gathering of responsible investment industry leaders.
  • September 12-14: Global Climate Action Summit, San Francisco, CA: Join the Four Twenty Seven team at this convening of global climate adaptation experts meant to propel action around the Paris Agreement.

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Responding to Economic Climate Risk in Australia

June 25, 2018 – 427 REPORT. Regulatory pressure and financial damage are necessitating an increase in physical climate risk disclosure in Australia. In exercising their own due diligence and assessing the exposure to physical climate risks in their portfolios, investors arm themselves with valuable information on corporate risk exposure which they can leverage to engage with companies around resilience. This report explores the connection between climate hazards and financial risks and shares examples of corporate adaptation and investor engagement to build resilience.

The global tide of interest in the Task Force on Climate-related Financial Disclosures (TCFD) has hit the shores of Australian financial markets, steered by regulators concerned about the systemic risk climate change poses to the economy. In 2017 Australian Prudential Regulation Authority’s Geoff Summerhayes was the first Australian regulator to formally endorse the TCFD. “Some climate risks are distinctly ‘financial’ in nature. Many of these risks are foreseeable, material and actionable now,” he said. This sentiment was echoed by John Price of the Australian Securities and Investments Commission in 2018 and reflects growing regulatory concern over climate risk disclosure internationally, as shown by Article 173 of France’s Law on Energy Transition and Green Growth and the 2018 European Commission Action Plan.

This Four Twenty Seven Report, Responding to Economic Climate Risk in Australia, explores the drivers of financial risk in Australia and discusses approaches to addressing this risk. The nation’s dominant industries are particularly threatened by the prevalent climate hazards. For investors, understanding a company’s risk to climate change is an essential first step to mitigating portfolio risk, but must be followed by corporate engagement to build resilience. Institutional investors are increasingly leveraging shareholder resolutions and direct engagement to prompt companies to disclose their climate risks and adapt.

Key Findings

  • Australia’s “Angry Summer” of extreme weather in 2013 cost the economy $8 billion and was followed by another summer of extremes in 2016-2017.
  • Construction, mining and manufacturing constitute almost 20 percent of Australia’s economy and are highly vulnerable to heat stress and water stress, which threaten large swaths of the nation.
  • Boral Limited and Rio Tinto are both Materials companies exposed to water and heat stress in their operations, but they have different risk scores stemming from differing vulnerabilities in their markets and supply chains.
  • Engagement on climate is relatively new for Australian shareholders, but is gaining momentum, with institutional asset managers voting on several climate risk disclosure resolutions in 2018.
  • Investors can address physical climate risk by reviewing their asset allocations, disclosing their own risks, investing in new opportunities and engaging with corporations.

Download the report.

Webinar: Emerging Metrics for Physical Climate Risks Disclosures

This Four Twenty Seven webinar on emerging metrics and best practices for physical climate risks and opportunities disclosures covers recent developments in TCFD and Article 173 reporting, challenges to assessing climate risk exposure, strategies for investors to incorporate this information into decision-making and approaches to build corporate resilience.

Speakers

  1. Emilie Mazzacurati, Founder and CEO, presents key findings from the EBRD-GCECA report: Advancing TCFD guidance on physical climate risks and opportunities and emerging best practices in physical risk reporting.
  2. Nik Steinberg, Director of Analytics, shares challenges and approaches for using climate data for business decisions.
  3. Frank Freitas, Chief Development Officer, discusses corporate engagement opportunities for investors and approaches to integrating climate change into investment strategies.
  4. Yoon Kim, Director of Advisory Services, shares examples of innovation in corporate resilience-building.

Newsletter: How to disclose physical climate risks & opportunities

 

 

Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss our new report on shareholder engagement,  recommendations for physical climate risk disclosure and upcoming webinars on physical climate risk.

In Focus: From Risk to Resilience – Engaging with Corporates to Build Adaptive Capacity

New report from Four Twenty Seven provides strategic guidance for shareholder engagement on physical climate risk


Released this week at RI Europe, our latest report From Risk to Resilience – Engaging with Corporates to Build Adaptive Capacity explains the value of engagement for both corporations and investors and describes data and case studies to drive engagement strategies. We identify top targets for shareholder engagement using data-driven strategies and provide sample questions as an entry point for investors’ conversations with corporations. The report shows investors can help raise awareness of rising risks from climate change and encourage companies to invest in responsible corporate adaptation measures.

Read coverage of the report in CFO Magazine’s article, Investors Push for Climate Risk Disclosure.

Read the Report

Advancing TCFD Guidance on Physical Climate Risk and Opportunities

A practical guide to climate risk and opportunities disclosures.


This seminal report aims to inform and support early adoption of climate risk reporting, based on findings from industry-led working groups with financial institutions and corporations. The report was sponsored by the European Bank for Reconstruction and Development, in partnership with the Global Centre of Excellence in Climate Adaptation.

The report calls on companies to perform forward-looking risk assessments and disclose material exposure to climate hazards. It also invites firms to investigate benefits from investing in resilience and opportunities to provide new products and services in response to market shifts. Co-authored by Four Twenty Seven and Acclimatise, the report provides best-in-class metrics and recommendations for effective disclosure in line with the TCFD.

The report was released at a high-profile conference hosted by EBRD – view conference materials, including a full summary, slides, op-eds and video at www.physicalclimaterisk.com.

Read the Report

427 Webinar: Emerging practices for TCFD reporting on physical climate risk 

Four Twenty Seven will host a webinar on TCFD reporting, emerging metrics and best practices for physical climate risks and opportunities disclosures. There will be two sessions of the same webinar to accommodate multiple time zones.

Agenda:

1. Metrics and emerging best practices for physical climate risks disclosures under Art. 173 and TCFD: Emilie Mazzacurati, Founder and CEO, will present key findings from the EBRD-GCECA report: Advancing TCFD guidance on physical climate risks and opportunities and emerging practices in physical risk reporting.

2. Using climate data to assess physical climate risks: Nik Steinberg, Director of Analytics, will discuss challenges and tools for using climate data for business decisions.

3. Building corporate resilience: Yoon Kim, Director of Advisory Services, will discuss do’s and don’ts of scenario analysis and share examples of innovation in corporate resilience-building.

3. Opportunities for investors: Frank Freitas, Chief Development Officer, will discuss corporate engagement opportunities for investors and approaches to integrating climate change into investment strategies.

5. Q&A: The webinar will include extended time for live Q&A.

Tues. June 12 at 8am PT; 11am ET; 4pm CET:

Register Here

Tues. Wed. 13 June at 9am HKT/SGT; 10am JST; 11am AEST (June 12 at 6pm PT):

Register Here

UN PRI Webinar: Measuring and Managing Physical Climate Risk

UN PRI and DWS present a webinar to explore the latest research on physical climate risks and their impacts on investment portfolios.

Speakers will discuss strategies for identifying physical climate risk in portfolios and incorporating this information into investment strategies.
Expert panel:

  • Murray Birt, ESG Thematic Research Strategist, DWS
  • Jessica Elengical, Head of ESG Strategy, Alternatives, DWS
  • Gerold Koch, Passive Product Development, Americas, DWS
  • Emilie Mazzacurati, Founder and Chief Executive Officer, Four Twenty Seven
  • Moderated by: Edward Baker, Senior Policy Advisor, Climate and Energy Transition, PRI

Wednesday, June 13, 8:am PT; 11am ET; 4pm BST

Register Here

Upcoming Events

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

  • June 7-9: 7th Sustainable Finance Forum, Waddesdon, UK: 427 COO Colin Shaw will discuss the use of corporate facility data to assess climate exposure at this forum hosted by the Sustainable Finance Programme at the University of Oxford.
  • June 12: Four Twenty Seven Webinar: Metrics for Physical Climate Risks Disclosure, 8am PT and 6pm PT: This webinar will cover TCFD reporting, emerging metrics and best practice for physical climate risks and opportunities disclosures.
  • June 13:  PRI Webinar: Measuring and managing physical climate risk, 8:00am PT: Founder & CEO Emilie Mazzacurati will join DWS and PRI in this discussion of the latest research on physical climate risk.
  • June 12-14: VERGE Hawaii, Honolulu, HI: Kendall Starkman, will speak about Four Twenty Seven’s work modeling the impacts of heat on human health.
  • June 18-21: Adaptation Futures 2018, Cape Town, South Africa: Director of Advisory Services, Yoon Kim, will facilitate a session exploring integrating climate risks into infrastructure investment decisions.
  • July 18: Summer in the City CSR Investing Summit, New York, NY: Emilie Mazzacurati will discuss methods to assess physical climate risk exposure on a panel about the business impacts of climate change.
  • June 26GRESB Sustainable Real Assets Conference, Sydney, Australia: Chief Development Officer Frank Freitas will speak on a panel on innovation and tools for building climate resilience in real asset portfolios at GRESB’s annual conference on resilient infrastructure investments.
  • August 28-29: 3rd California Adaptation Forum, Sacramento, CA: Kendall Starkman will facilitate a panel on mobilizating climate adaptation through partnerships at this biennial convening of adaptation professionals from across California.
  • September 11: Save the date for a Four Twenty Seven side event on resilience finance alongside the UN PRI and GCAS.
  • September 12-14: PRI in Person, San Francisco, CA: Visit the Four Twenty Seven booth and meet with our team at this annual gathering of responsible investment industry leaders.
  • September 12-14: Global Climate Action Summit, San Francisco, CA: Join the Four Twenty Seven team at this convening of global climate adaptation experts meant to propel action around the Paris Agreement.

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Four Twenty Seven sends a newsletter focused on bringing climate intelligence into economic and financial decision-making for financial institutions, corporations, and government institutions.Our mailing address is:
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Engaging with Corporates to Build Adaptive Capacity

June 5, 2018 – 427 REPORT. Shareholder engagement is a critical tool to build resilience in investment portfolios. Investors can help raise awareness of rising risks from climate change, and encourage companies to invest in responsible corporate adaptation measures. We identify top targets for shareholder engagement on physical climate risks and provide data-driven strategies for choosing companies and approaching engagement. Our report includes sample questions as an entry point for investors’ conversations about climate risk and resilience with corporations.

Shareholder engagement on climate change has grown tremendously in recent years. Over 270 investors, managing almost $30 trillion collectively, have committed to engage with the largest greenhouse gas emitters through the Climate Action 100+. In addition to their ongoing efforts to engage and encourage companies to reduce emissions, investors are becoming aware of the financial risks from extreme weather and climate change. Climate change increases downside risks: a negative repricing of assets is already being seen where climate impacts are most obvious, such as coastal areas of Miami. As climate change can negatively impact company valuations, investors must strive to bolster governance and adaptive capacity to help companies build resilience.

This Four Twenty Seven report, From Risk to Resilience – Engaging with Corporates to Build Adaptive Capacity, explains the value of engagement, for both corporations and investors and describes data and case studies to drive engagement strategies. While news coverage of extreme weather events can clue investors in to which corporations may be experiencing climate-driven financial damage, new data can empower investors to identify systemic climate risk factors and proactively engage companies likely to experience impacts in the future. Reactive engagement strategies based on news stories can also use data to more thoroughly explore corporations highlighted in the news, by examining other hazards that may pose harm to their operations.

The report also identifies the Top 10 companies with the highest exposure to physical climate risk in the Climate Action 100+ and calls for investors to leverage their engagement on emissions to also address urgent issues around climate impacts and building resilience.

Once they identify companies, shareholders can use a variety of questions to gain a deeper understanding of companies’ vulnerability to climate hazards and their governance and planning processes, or adaptive capacity, to build resilience to such impacts. The report provides sample questions for different components of climate risk, including Operations Risk, Market Risk and Supply Chain Risk, as well as Adaptive Capacity.

Key Takeaways

• The impacts of a changing climate pose significant downside risk for companies; a risk bound to increase as the climate continues to degrade.
• At present, investors are likely to become aware of exposure to financial damages from extreme weather events only after they have occurred. Disclosure is limited but gaining traction.
• Corporate engagement is a tool to encourage companies to deploy capital and technical assistance to build resilience in their operations and supply chains.
• Investors can select target companies reactively based on prior incidents or pro-actively identify firms that would benefit from resilience plans.
• Investors should question companies on their exposure to physical climate risks via their operations, supply chain and market, as well as how they are building resilience to these risks through risk management and responsible corporate adaptation strategies.

Download the report.

Download the press release.

EBRD to Host Physical Climate Risk Conference on 31 May

The European Bank for Reconstruction and Development (EBRD) and the Global Centre of Excellence on Climate Adaptation (GCECA) have announced details of their conference, “Advancing TCFD guidance on physical climate risk & opportunities.”  A culmination of their initiative focused on building climate resilience in the financial sector, the conference will share findings on physical risk and resilience metrics from three expert working groups. Read the press release below, originally published on EBRD’s website:

—————————————-

Findings of industry working groups will be published ahead of the event “Advancing TCFD guidance on physical climate risk and opportunities”

  • Conference on 31 May to discuss physical climate risk and opportunity disclosure in climate-related financial disclosure reporting. Industry-led working groups to publish findings.
  • Event will advance thinking on how to develop physical climate risk metrics in line with Task Force on Climate-related Financial Disclosures (TCFD) guidance.
  • Conference co-organised by European Bank for Reconstruction and Development (EBRD) and the Global Centre of Excellence on Climate Adaptation (GCECA).

The EBRD and GCECA are hosting an event “Advancing TCFD guidance on physical climate risk and opportunities”, which will be held on 31 May 2018 at the EBRD’s headquarters in London.

Findings about physical climate risk and opportunity disclosure by industry-led working groups, which have been meeting at the EBRD’s headquarters since 2017, will be released at the conference.

This event will build on the recommendations of the TCFD, headed by Mark Carney and Michael Bloomberg. These recommendations highlight a growing concern over the effects of climate change on the economy and financial markets, and the need for investors to be able to assess climate-related risks.

At the conference, senior representatives from the financial, business and regulatory communities will discuss the development of metrics for disclosing physical climate risk and opportunities, and the integration of these disclosures into decision-making.

The confirmed high-level speakers at the conference will include:

  • Suma Chakrabarti, President, the EBRD
  • Roald Lapperre, Netherlands Deputy Minister for Infrastructure & Water
  • Frank Elderson, Executive Director, DNB (Netherlands Central Bank).

The panelists will represent a rich variety of market leaders such as Aon, Citi, Maersk, Moody’s and Standard Chartered, as well as the Bank of England, the French Treasury and the European Commission.

Findings from the expert working groups will also be published. The working groups include representatives from Allianz, APG, Aon, Bank of England, Barclays, BlackRock, Bloomberg, BNP Paribas, Citi, DNB, DWS, Lightsmith Group, Lloyds, Meridiam Infrastructure, Moody’s, OECD, S&P Global, Shell, Siemens, Standard Chartered, USS and Zurich Asset Management. An expert team led by Acclimatise and Four Twenty Seven is providing the Secretariat function to the working groups.

TCFD recommendations, released for the G20 summit in June 2017, call for the inclusion of metrics on physical climate risk and opportunities into financial disclosures by corporations and financial institutions. This is echoed in the recommendations of the European Union’s High Level Expert Group on sustainable finance, released in January 2018, and the Action Plan from the European Commission released in March 2018.

Last month the EBRD become a TCFD supporter, the first multilateral development bank to do so. The EBRD’s 2017 Sustainability Report, to be released later this month, will provide an initial outline of how TCFD recommendations relate to the Bank’s operations. The conference on 31 May will be an important milestone in the Bank’s support for the TCFD process.

Since 2006 the EBRD has invested over €22 billion in projects under its Green Economy Transition approach. Energy efficiency and environmental sustainability have been a priority for the Bank since its creation in 1991.

—————————————-

Contact CEO Emilie Mazzacurati for more information and read about Four Twenty Seven’s solutions to help financial institutions, businesses and governments improve their climate resilience.

Newsletter: Fintech Meets Climate Data

 

 

Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss a discussion with our new Chief Development Officer, our report on using climate data and cool new innovations in climate science!

In Focus: Fintech Meets Climate Data

Meet Chief Development Officer, Frank Freitas

We chatted with our new Chief Development Officer, Frank Freitas, about his motivations to join Four Twenty Seven after almost 30 years in finance and fintech, and his vision for new products and markets in climate analytics. Having spent his career developing award-winning solutions for global institutional investors, Frank is a seasoned veteran of product management and strategic planning.

He founded and sold Pluribus Labs, a research and analytics firm focused on the translation of unstructured data into investable signals. Before that, he served as Chief Operating Officer and Head of Product Strategy at Instinet, a leading technology-levered agency broker. He started his career in Product Management, designing and leading the delivery of quantitative risk solutions at Barra (now MSCI). “The acceleration of climate’s influence on corporate performance is upon us, and investors are rapidly awakening to the risks that climate change brings to financial markets,” Frank says. “Four Twenty Seven’s sophisticated climate data analytics are at the forefront of identifying most exposed corporations and assets globally, and we will continue to build on our expertise to provide best-in-class analytics of climate risk for our clients globally.”

 

Inside Market Data covers Frank’s transition to Four Twenty Seven and highlights the company’s goals for this year, including a focus on incorporating new types of data to add nuance to our risk analyses.

Read the Interview

Using Climate Data for Investment Decisions

Using Climate Data: A Four Twenty Seven Report


In this new Four Twenty Seven report, we demystify climate data with a clear breakdown of what it is, where it comes from and the nuances to consider when choosing which data products to use. Understanding the risks posed by climate change for facilities or infrastructure assets starts with conducting a risk assessment, which requires an understanding of the physical impacts of climate change. However, for unfamiliar users, climate data is hard to integrate into enterprise risk management, financial risk modelling processes and risk analysis.This climate data primer serves as an introduction for financial, corporate and government stakeholders striving to understand their exposure to physical climate change.

Read the Report

Innovations in Climate Science

Solar-Powered “Saildrones”

Two solar-powered sail boats are returning to California this month after debuting their ocean monitoring capacity on a trip through the Pacific. These drones are part of a collaboration between NOAA and Alameda-based startup, Saildrone, and they may be able to replace the costly bouy system that scientists currently use to obtain ocean circulation data. The boats collect temperature, wind and solar radiation data, while also measuring ocean circulation currents and gas exchange. These data are more precise than data collected by satellites or buoys and have the potential to provide powerful insights into studies of climate’s impact on ocean circulation.

Autonomous Ice Robots

A squad of “Seaglider” robots have been programmed with navigational algorithms for their year-long journey under Pine Island Glacier in Western Antarctica. Some may sink or get lost in ice caves, but the rest will collect data on salinity, temperature and oxygen content to inform scientific understanding of the rate of ice loss with climate change and implications for sea-level rise, floating to the surface to transmit their data.

Science Funding in the Federal Budget

The omnibus bill passed by Congress and signed by the President last month, did not include the funding cuts to critical climate research that many feared. NOAA received $5.9 billion, which is $234 million above its FY 2017 amount. NOAA has many resources for adaptation professionals and others striving to better understand how the natural world affects their lives and businesses, ranging from its satellite system and weather data to its integrated science programs and US Climate Resilience toolkit. This alphabetized list highlights over 20 such resources.

CRA Webinar: What You Need to Know About TCFD and 2018 Reporting Cycles

Thu, May 10, 2018 1:00 PM – 2:00 PM EDT 
Climate change has become a growing concern for corporations, investors, and financial regulators alike. Corporations need to understand how the impacts of a changing climate may affect company operations or their broader value chain and assess how such impacts should be included in corporate disclosures and sustainability reports.

Emilie Mazzacurati will present an overview of how corporations can identify material risks, provide an update on rising regulatory requirements and changes to voluntary reporting frameworks to align with TCFD recommendations, and highlight opportunities to build resilience and adapt to new market conditions.

This programming is provided exclusively for Corporate Responsibility Association members and invited guests. To RSVP email Jen Boynton at jboynton@3blmedia.com.

Inside the Office at Four Twenty Seven

Four Twenty Seven Website Features New Insights Page

 

Our blog page has been revamped with featured articles at the top and an interactive filter feature that allows users to sort by author, client, media type and theme or to search for keywords.

Our most read publications this month include:

Upcoming Events

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

  • April 30 – May 1: 2018 Local Solutions Eastern Climate Preparedness Conference, Manchester, NH: Advisory Services Manager, Katy Maher, will discuss strategies to build local resilience with this convening of government stakeholders.
  • May 1: TCFD US Scenario Analysis Conference, New York, NY: Founder and CEO Emilie Mazzacurati and Chief Development Officer, Frank Freitas, will join this discussion about using scenario analysis in climate-related risk disclosure and resources to help corporations do so.
  • May 10: What You Need to Know About Climate Related Financial Disclosures (TCFD), CRA Webinar: Emilie Mazzacurati is the presenter on this webinar about corporate climate risk disclosure. CRA members only.
  • May 17: GRESB’s Sustainable Real Assets Conference, Washington, DC: Emilie Mazzacurati will keynote GRESB’s annual conference on infrastructure resilience and Chief Development Officer, Frank Freitas will join the convening.
  • May 23: Four Twenty Seven Webinar, 11am-12pm PST: Save the date for a webinar on city level physical climate risks and opportunities to access climate adaptation and resilience financing. Registration details forthcoming.
  • May 31: Advancing TCFD Guidance on Physical Climate Risk and Opportunities, London, UK: Four Twenty Seven is a strategic partner for this event hosted by EBRD and GCECA to discuss emerging guidance on metrics for physical climate risk disclosures and scenario analysis and Emilie Mazzacurati will moderate a panel presenting findings on physical risk metrics.
  • June 5-6: Responsible Investors Europe, London, UK: Hear Emilie Mazzacurati speak on a panel on corporate engagement and also meet with Frank Freitas and Senior Risk Analyst, Léonie Chatain, to discuss ratings and engagement on physical climate risk in equities.
  • June 12-14: VERGE Hawaii, Honolulu, HI: Advisory Services Manager, Kendall Starkman, will join this convening of corporate, government and NGO stakeholders committed to building resilient cities and economies.
  • June 18-21: Adaptation Futures 2018, Cape Town, South Africa: Director of Advisory Services, Yoon Kim, will facilitate a session exploring integrating climate risks into infrastructure investment decisions.
  • June 26: GRESB’s Sustainable Real Assets Conference, Sydney, Australia: Meet with  Frank Freitas at GRESB’s annual conference on resilient infrastructure investments.
  • 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.
  • September 12-14PRI in Person, San Francisco, CA: Join the Four Twenty Seven team at this annual convening of responsible investment industry leaders.
  • September 12-14: Global Climate Action Summit, San Francisco, CA: Join the Four Twenty Seven team at this convening of global climate adaptation experts meant to propel action around the Paris Agreement.

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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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Fintech Meets Climate Data

We chat with our new Chief Development Officer, Frank Freitas, about his motivations to join Four Twenty Seven after almost 30 years in finance and fintech, and his vision for new products and markets in climate analytics.

Why did you decide to join Four Twenty Seven?

First and foremost, the fact that our firm provides data-driven analytics that quantify real issues facing our planet today is very attractive to me. I have spent my entire career in finance and, like others, have increasingly come to see the need for alignment of investment decisions with those that preserve the future of our planet. To me, Four Twenty Seven’s mission and vision exist at the center of this nexus.

When I encountered the Four Twenty Seven white paper on climate risk in equity markets, I was impressed by the level of thought-leadership embedded in the research, and by the high level of quantitative rigor applied to the development of its risk scores. The acceleration of climate’s influence on corporate performance are upon us, and investors are rapidly awakening to the risks that climate change brings to financial markets. Four Twenty Seven’s sophisticated climate data analytics are at the forefront of identifying the most exposed corporations and assets globally.

My career to date has been focused on the development of analytical solutions for institutional investors, ranging from multi-factor risk models at Barra (now MSCI) to the solutions we built in my previous company, Pluribus Labs, where we combined data science and natural language processing with quantitative modeling to distill a variety of unstructured data sources into investible signals.

In my subsequent conversations with Emilie and the Four Twenty Seven team, I quickly came to realize that Four Twenty Seven’s research methodology really resonated with me, and that the culture here is fabulous. It’s rare that you have an opportunity to do what you love and also provide solutions that impact the planet’s future — my role at Four Twenty Seven enables me to do just that!

How is technology spurring innovation in research around financial risk?

There are a number of drivers at play in this respect.  First and perhaps most obviously, the availability of computing power at our fingertips makes data analysis on large data sets more available and more affordable than ever before.  If you had told me when I started my career that I would be able to create an account on a cloud computing platform like Google’s GCP or Microsoft’s Azure and have massive amounts of compute power available within minutes, I wouldn’t have believed you!  Four Twenty Seven’s ability to distill terabytes of climate data from an ensemble of models into actionable insights at the asset level is a great way to leverage this computing power.

Relatedly, the ubiquity of meaningful data, both unstructured and structured, also provides a much broader set of lenses through which to view the world.  Financial research has always focused on the development of insights from any and all available data sources on companies, industries and economies.  Today, an ever-increasing volume of data sources are accessible for analysis.  For example, features extracted from satellite images of our planet can be used to arrive at estimates on a wide variety of metrics, ranging from crop yields to consumer brand sales changes.  Similarly, observations gleaned from the ‘Internet of Things’ (IoT) can provide us with insights into weather trends and CO2 emissions at the sub-city level.  Moving forward, opportunities afforded by organizations’ self-reporting of their climate risks and mitigation plans specifically related to climate change will provide additional data points for firms like ours to incorporate into our ground truth analysis of companies, industries and economies.

Couple these two trends with increasingly sophisticated machine learning and feature extraction techniques and you wind up with tremendous opportunities to develop insights into both the physical risks of climate change and the steps that companies are taking to mitigate these risks.

What are the priorities during your first year at Four Twenty Seven?

Emilie and the team have translated their broad and deep base of intellectual property into purpose-built solutions for a number of key market segments in the financial sector. These solutions enable asset owners and investors alike to understand their holdings’ exposure to the physical reality of climate change.

Our goals for this year are to continue tuning our existing offerings through engagement with our clients and to position the firm for its next phase of growth.  Thanks to entities like the Task Force on Climate-related Financial Disclosures (TCFD), market participants are increasingly aware of the need to incorporate climate risk analytics into their investment process, and we will continue to evangelize this message in our own interactions with the investment community.  We are currently in fundraising mode and will use proceeds from our capital raise to support plans to leverage our proprietary facility database to quantify the relationship between weather and company performance.  In addition, we intend to on-board additional data sources to inform our analytics and add desktop visualization tools to our client offerings. This promises to be a busy year!

Newsletter: Advancing TCFD Guidance on Physical Climate Risk & Opportunities

 

 

Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss our update on upcoming EU regulations, our analysis on lessons learned from Art. 173 in France, and our conference calendar for the spring!

In Focus: Advancing TCFD Guidance on Physical Climate RIsk and Opportunities

An initiative from the European Bank for Reconstruction and Development and the Global Center for Excellence in Climate Adaptation

The European Bank for Reconstruction and Development (EBRD) and the Global Centre of Excellence on Climate Adaptation (GCECA) are hosting an event: “Advancing TCFD guidance on physical climate risk and opportunities,” which will be held on 31 May at the EBRD’s headquarters in London. This event will be a forum for senior representatives from the financial and business community to discuss and identify the way forward for the development of metrics for disclosing physical climate risk and opportunities, as well as pointers for integrating physical climate risk considerations in scenario-based decision making by businesses and financial institutions.

In preparation for this event, the EBRD has been hosting working groups focused on advancing and fleshing out the recommendations from the Task Force on Climate-related Financial Disclosure’s (TCFD) final recommendations released for the G20 summit last June. The TCFD recommended the inclusion of metrics on physical climate risk and opportunities in financial disclosures and called for further research and concrete guidance on what the appropriate metrics would be.

The conference will feature the findings from expert working groups that include representatives from Allianz, APG, AON, Bank of England, Barclays, BlackRock, Bloomberg, BNP Paribas, Citi, DNB, Deutsche Asset Management, Lightsmith Group, Lloyds, Meridiam Infrastructure, Moody’s, OECD, S&P Global, Shell, Siemens, Standard Chartered, USS and Zurich AM

Four Twenty Seven provides the technical secretariat for this initiative in partnership with Acclimatise. Learn more about the conference: “Advancing TCFD Guidance on Physical Climate Risk & Opportunities.” 

EU Moves Towards Regulation for Climate Risk Disclosure

EC Releases its Action Plan: Financing Sustainable Growth

Earlier this month the EU laid out a clear plan to move towards mandatory climate risk disclosure as part of a new set of regulations to finance sustainable growth and support the transition to a low-carbon economy. The European Commission’s Action Plan lays out a two year timeline for implementation, with a goal to create a taxonomy for climate adaptation finance by the end of 2019. These regulations from the EU will drive change into financial markets globally and set standards on reporting, disclosures and infrastructure resilience that will likely set the bar for the rest of the world.

The EC based the Action Plan on the High-Level Expert Group on Sustainable Finance’s (HLEG) final recommendations for actions to drive the transition to a sustainable financial system. The HLEG was created by the EC in December 2016 to determine how the regulatory landscape should transform to support efforts towards the goals of the Paris agreement and  promote the financing of a sustainable, resource-efficient economy. As the group’s report was eagerly awaited as a blueprint for market transformation in Europe, the EC’s Action Plan is expected to propel that transformation forward while prompting international conversation.

Read the Analysis

Lessons Learned from Article 173 Reporting

How are French investors reporting physical risk?
A Four Twenty Seven analysis

The first year of reporting under Art. 173 in France saw limited uptake of disclosures of physical risk and opportunities. We reviewed disclosures from 50 asset owners in France and found that only a quarter of respondents included substantial analysis and metrics on their exposure to physical impacts of climate change. We find insurance companies AXA and Generali provided the most detailed analysis for property portfolios, while FRR and ERAFP were the only pension funds to provide an initial assessment of physical risk exposure in their equity and fixed income portfolios.

Read the Analysis

More good reads on climate risk disclosures:

Extreme Weather Hurts Corporations

Weather Affects Company Performance

Whether it’s extreme heat diminishing worker productivity, winter storms damaging roads and power lines or one of countless other impacts, extreme weather causes harm to businesses’ facilities, their workers and supply chains, and leads to financial impacts. The World Resources Institute’s recent report, “Water Shortages Cost Indian Energy Companies Billions,” highlights findings that India’s thermal power is so reliant on water for cooling that the largest thermal utilities had to close at least once between 2013-2016 and lost about $1.4 billion in revenue. In the article “5 Things Companies Can Do to Grow in a Water-Stressed World,” Water Deeply describes ways that companies are mitigating their risk by proactively addressing water resource limitations.

Climate-related Risk for Telecommunications

Companies in different sectors will be affected differently by three types of climate risk. Novethic’s article “L’impact des risques climatiques sur les entreprises, le cas d’Orange,” provides direct examples of how physical climate risk, transition risk and reputation/legal risk directly threaten companies. In a discussion of Orange, a telecommunications provider, the article highlights the complex factors that companies must consider in addition to their impact on CO2 emissions. Such considerations include a company’s potential to promote innovations for resilience in society through programs ranging from apps that organize carpooling to smart metering.

Inside the Office at Four Twenty Seven

Meet Guest Researcher, Nora Pankratz

Four Twenty Seven is excited to welcome Nora Pankratz as a guest researcher. Nora is a Ph.D. candidate in Finance at the European Center for Corporate Engagement at Maastricht University in the Netherlands. Her research focuses on the impact of extreme temperatures on the financial performance of public firms. For the next several months Nora will be based in Berkeley, working with data collected by Four Twenty Seven to develop a research project on the translation of climate risks into financial risks.

Upcoming Events

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

  • March 19-21: ClimateCon, Asheville, NC: Katy Maher, is at this convening of science and businesses professionals focused on building climate resilience.
  • March 26-27: Financial Risks International Forum, Paris, France: Léonie Chatain, will attend this annual conference on emerging risks in the financial and insurance sectors.
  • April 2:  ICARP TAC Quarterly Meeting, San Francisco, CA: Natalie Ambrosio will participate in the Adaptation Vision Framework workshop hosted by the Governor’s Office of Planning and Research.
  • April 3-6: Sustainatopia, San Francisco, CA: COO Colin Shaw, will speak on a panel on ESG investing and a panel on climate risk at this annual convening of sustainability and financial experts.
  • April 9Financing Climate Change Adaptation, New York, NY: Founder and CEO Emilie Mazzacurati will participate in a private investor workshop on financing adaptation in US cities, organized by C40, NY City and GARI.
  • April 10-11:  Responsible Investors Asia, Tokyo, Japan: Meet with the Four Twenty Seven team to discuss physical climate risk in equities and infrastructure portfolios.
  • May 17: Sustainable Real Assets Conference, Washington, DC: Founder and CEO Emilie Mazzacurati will keynote GRESB’s annual conference on infrastructure resilience.
  • May 31: Advancing TCFD Guidance on Physical Climate Risk and Opportunities, London, UK: Four Twenty Seven is a strategic partner for this event hosted by EBRD and GCECA to discuss emerging guidance on metrics for physical climate risk disclosures and scenario analysis.
  • June 5-6: Responsible Investors Europe, London, UK: Meet with the Four Twenty Seven team to discuss ratings and engagement on physical climate risk in equities.
  • June 18-21: Adaptation Futures 2018, Cape Town, South Africa: Director of Advisory Services, Yoon Kim, will facilitate a session exploring integrating climate risks into infrastructure investment decisions.
  • August 28-293rd 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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Advancing TCFD Guidance on Physical Climate Risk & Opportunities: An EBRD & GCECA Initiative

The European Bank for Reconstruction and Development (EBRD) and the Global Centre of Excellence on Climate Adaptation (GCECA) have announced an initiative focused on building climate resilience in the financial sector. Throughout the project Four Twenty Seven and our partners, Acclimatise, are supporting the knowledge development on physical climate risk and resilience metrics for the financial sector. The project will culminate in an event in May in London: “Advancing TCFD guidance on physical climate risk & opportunities.”

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The European Bank for Reconstruction and Development (EBRD) and the Global Centre of Excellence on Climate Adaptation (GCECA) are hosting an event: “Advancing TCFD guidance on physical climate risk and opportunities”, which will be held on 31 May at the EBRD’s headquarters in London. This event will build on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which crystallised a growing concern of investors and business leaders over the physical impacts of climate change on the economy and financial markets.

The TCFD’s final recommendations, released for the G20 summit in June 2017, recommended the inclusion of metrics on physical climate risk and opportunities into financial disclosures and called for further research and concrete guidance over what the appropriate metrics should be. Corporations and financial institutions need to agree on common metrics to ensure transparency and data comparability. Since then, the recommendations of the European Union’s High Level Expert Group on sustainable finance, released in January 2018, have also highlighted the need for a common taxonomy on climate change adaptation and metrics for physical climate risk and opportunity disclosures.

This event will be a forum for senior representatives from the financial and business community to discuss and identify the way forward for the development of metrics for disclosing physical climate risk and opportunities, as well as pointers for integrating physical climate risk considerations in scenario-based decision making by businesses and financial institutions.

The conference is sponsored by the EBRD and GCECA, and will feature the findings from expert working groups that include representatives from Allianz, APG, AON, Bank of England, Barclays, BlackRock, Bloomberg, BNP Paribas, Citi, DNB, Deutsche Asset Management, Lightsmith Group, Lloyds, Meridiam Infrastructure, Moody’s, OECD, S&P Global, Shell, Siemens, Standard Chartered, USS and Zurich AM, Acclimatise and 427 are providing the Secretariat function.

A detailed agenda will be circulated in due course. Please note that this is an invitation only event. Additional details are available on EBRD’s event page.

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Contact CEO Emilie Mazzacurati for more information and read about Four Twenty Seven’s solutions to help financial institutions, businesses and governments improve their climate resilience.