Newsletter: PG&E Bankruptcy Sparks Investor Concern

Four Twenty Seven's monthly newsletter highlights recent developments on climate risk and resilience. This month we explore climate risk in the S&P 500, discuss the impacts of climate change on credit risk and share the latest reports on climate risk disclosure. 

In Focus: Climate Risk in the S&P 500

Barron's: An Exclusive Look at the Companies Most Exposed
to Climate Change Risk - And What They're Doing About It

Barron's features Four Twenty Seven's equity risk scores to explore physical climate risk exposure in the S&P 500, finding Western Digital, NextEra Energy, Micron Technology and Merck to be among the most exposed corporations in the United States. Barron's compelling story shows how (some) corporations are preparing for these risks, highlighting the need for more substantial and standardized disclosures on risk and resilience. 

Bloomberg also reports on corporate climate reporting, highlighting the self-reported exposure of many U.S. companies in CDP, as well as reported opportunities from a changing climate, such as Home Depot's estimation that increasing disasters and higher temperatures will mean more sales, particularly of fans and cooling appliances.
PG&E Bankruptcy Sparks Investor Concerns
The bankruptcy of PG&E, California's largest utility, has become a symbol of the very material impacts climate change can have on corporations and financial markets. While credit ratings agencies like Moody's had downgraded PG&E's credit rating to junk status based on its tens of billions of dollars in wildfire liability in the weeks preceding the bankruptcy, the question for investors is how these risks can be detected and priced in earlier.

In a broad review of emerging practices for ESG, Credit Risk and Ratings, the UN Principles for Responsible Investment highlights the increased transparency by credit rating agencies and investors into their thinking on ESG integration, although these groups often have different goals for their ESG analysis.

Indeed, the world of credit ratings is slowly moving towards a better integration of ESG considerations at large, including some aspects of climate change risk, like transition risk. Trucost, of S&P Global recently released a report on integrating transition risk scenario analysis into credit rating instruments, while  Fitch Ratings introduced ESG relevance scores that provide industry-specific explanations of ESG factors. Systematic integration of physical climate risk in corporate ratings, however, remains the next frontier for financial markets.
EU Releases Recommendations for
Climate Risk Disclosures

EU Technical Expert Group Report on Climate-related Disclosures

As part of Europe's Action Plan on Financing Sustainable Growth, the Technical Expert Group on Sustainable Finance released their final recommendations to the European Commission on integrating climate change into the Non-Financial Reporting Directive (NFRD). The European Commission plans to adopt the directive in June, after a round of stakeholder consultation

The report integrates climate risks into the existing NFRD framework, which includes business model; policies and due diligence processes; outcomes; principal risks and their management; and key performance indicators. It maps this framework to TCFD recommendations and goes further, referencing the EBRD-GCECA report on metrics for physical climate risks and opportunities reporting. While many of the metrics identified in the recommendations are for transition risk, the authors do integrate physical climate risk throughout the report and also require disclosure of a company's impact on climate change.
Quantifying Climate Risk:
Stories from the Field

Dutch Central Bank Assesses Water Risk in the Financial Sector

The Dutch Central Bank broke new grounds in its effort to quantify environmental risk in financial markets. In its report Values at risk? Sustainability risks and goals in the Dutch financial sector, DNB assesses the exposure of the Dutch financial sector to water stress, biodiversity loss, resource scarcity and human rights controversies, leveraging Four Twenty Seven's analytics on water stress.

Building on the Base: TCFD Disclosure in Asia

This report surveys the uptake of TCFD recommendations by large companies in Asia, focusing on the financial services, agriculture, energy, materials, buildings, mining and transport sectors. The research found that insurance, transport and energy sectors scored the highest for both quality and coverage of TCFD reporting, while asset owners and managers had lower average scores. 

On Again: France Enters Third Year of Mandatory Disclosures

2019 marks the third reporting year under Art. 173 in France, which requires investors to disclose their exposure to both transition and physical risk.  Noteworthy reports from previous years' reporting include analysis by French sovereign wealth fund Fonds de Réserve pour les Retraites (FRR) and insurance company Allianz France, which both integrate physical risk analysis by Four Twenty Seven. Read more about our reporting and analytics solutions for investors and banks. 
Upcoming Events

Join the Four Twenty Seven team at these upcoming events:

  • March 20-22 – Climate Leadership Conference, Baltimore, MD: Emilie Mazzacurati will speak about the evolving landscape of climate risk disclosure.
  • April 10-12 – RI Asia Japan, Tokyo, Japan: Hear Chief Development Officer, Frank Freitas, present on climate analytics for investors and meet with Emilie Mazzacurati at Four Twenty Seven's booth.
  • April 13-16  – APA National Planning Conference, San Francisco, CA: Director of Advisory Services, Yoon Kim, and Director of Analytics, Nik Steinberg, will speak on a panel called, "Beyond Vulnerability: Innovative Adaptation Planning."
  • April 23-25 – National Adaptation Forum, Madison, WI: Editor, Natalie Ambrosio, will present on local adaptive capacity from a private sector perspective and Yoon Kim will also join the convening.
  • April 29 - May 1  – Ceres Conference 2019, San Francisco, CA: The Four Twenty Seven team will join investors and corporations at this annual gathering.
  • June 11 - 12 – RI Europe, London, UK: Hear Emilie Mazzacurati present on climate risk in financial markets and meet with Director, Europe, Nathalie Borgeaud, at Four Twenty Seven's booth.
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Copyright © 2019 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:
Four Twenty Seven
2000 Hearst Ave
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Berkeley, CA 94709

Newsletter: Towards Adaptation Standards

Four Twenty Seven's monthly newsletter highlights recent developments in climate adaptation and resilience. This month, we release a new report to help corporations and investors understand local adaptive capacity, share initiatives to standardize adaptation and highlight resources on adaptation finance.

In Focus: Assessing Local Adaptive Capacity 

427 Report: Helping Corporations and Investors Understand
Local Adaptive Capacity 

Building resilient communities and financial systems requires an understanding of climate risk exposure, but also of how prepared communities are to manage that risk. 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.

Our newest report describes Four Twenty Seven's framework for assessing 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. We create location-specific analysis by focusing on three pillars: 1) awareness, 2) economic and financial characteristics, and 3) the quality of adaptation planning and implementation. This helps the private sector understand their assets' risks and provides an entry-point for collaboration on local resilience-building. 
Read the Report
Towards Adaptation Standards
While climate mitigation has traditionally been the focus of efforts to address climate change, the past few years have seen an increased recognition of adaptation as a critical element of confronting climate change. As efforts grow to understand, quantify and catalyze adaptation investment there is a growing need for standardization and metrics around resilience investments.

EU Technical Expert Group on Sustainable Finance  

The European Commission's Action Plan on financing sustainable growth lays out a two year timeline for implementation, with a goal to create a taxonomy for climate adaptation finance by the end of 2019. To accomplish this goal, the EU has launched a Technical Expert Group (TEG) on Sustainable Finance and is calling for expert feedback on what actions qualify as adaptation and mitigation.
This will contribute to the ongoing effort to identify investments that build resilience in specific industries. The TEG recently released its preliminary report outlining its current thinking and explaining where it is soliciting feedback. The report shows the current lack of consensus around adaptation metrics and the need to standardize resilience definitions.

Expert Group on Resilient Bond Standards

A parallel initiative by the Climate Bonds Initiative (CBI) is focused on strategically incorporating adaptation into green bond standards. While green bonds have tended to focus on mitigation to date CBI launched an Adaptation and Resilience Expert Group (AREG) in November, which will develop Adaptation and Resilience Principles for bonds.
These principles will be released for public consultation in June 2019 and will lay the foundation for the development of sector-specific adaptation and resilience criteria. Founder & CEO, Emilie Mazzacurati, and Strategic Advisor, Josh Sawislak, are members of AREG.
Science Suffers in Government Shutdown
Four Twenty Seven analysts Josh Turner and Colin Gannon attended the American Meteorological Society's annual meeting last week, where the absence of hundreds of federal scientists was sorely felt. Numerous sessions were cancelled or poorly attended, and information sharing was lost in both directions. 
 

 
Most Americans may not feel the shutdown's impacts on a daily basis, but there are long-lasting implications far beyond the lack of conference attendance. While only those employees responsible for "essential services" continue to work with limited pay, data collection for long-term climate studies will be hindered, research on wildfire impacts will be delayed and hurricane model improvements and emergency training aren't progressing as they should. Some federal data sites are not currently accessible and the dearth of economic monitoring means that key data used by investors and policy-makers, like agricultural production numbers, are no longer being reported. 

Despite these obstacles, the private sector is persevering in its efforts to understand and address climate impacts. IBM announced that it will release the world's first hourly-updating, highest-resolution global weather forecasting model later this year and McKinsey just added 121 weather-data variables to its agriculture analytics tool, refining crop yield predictions. This year also promises to see continued growth in publicly hosted data sets, satellite data, and machine learning techniques for climate projections.
Resources for Adaptation Finance

Plugging the Climate Adaptation Gap with High Resilience Benefit Investments

In this report S&P Global Ratings  highlights both the funding gap and the multifaceted benefits of resilience projects. It outlines both challenges and benefits of quantifying benefits of adaptation projects and the barriers to adaptation, providing a small case study on the economic benefits of adapting to sea level rise.  Lastly, the brief report emphasizes the need for private investment to support limited public funding.

Financing Climate Futures: Rethinking Infrastructure

This report outlines a vision for a realigned financial system, prepared for long-term climate risks and opportunities.  The OECD, World Bank and UN Environment explain the dire need to disclose climate-related financial information in infrastructure projects and to invest in low-emission, resilient infrastructure that is both prepared for a changing climate and able to catalyze economic growth. 

Money for Resilient Infrastructure

The ebook Money for Resilient Infrastructure: How to Finance America's Climate Changed Future, explains recent developments in the financial sector's understanding of climate-related risks and highlights the growing demand for resilient infrastructure. Joyce Coffee outlines infrastructure finance options, investment instruments and strategies for obtaining resilience financing. 
Emilie Mazzacurati Named Top 100 in Finance
The Top 100 Magazine includes Founder and CEO, Emilie Mazzacurati, in the 2018 Top 100 People in Finance. 

“I’m honored to be recognized by The Top 100 Magazine,” says Emilie.  “We’re pushing the boundaries of how the financial world thinks about climate change, and appreciate the recognition on how our work helps drive the conversation on climate risk.” The Top 100 Magazine writes that while climate data "may seem like a fairly novel niche within the financial sector, the demand for this data has grown exponentially over the past two years... [Four Twenty Seven's] analysis leverages best-in-class climate data at the most granular level, and scores assets based on their precise geographic location. This provides the financial industry with the most comprehensive overview of investment outcomes related to present and future climate changes."

Upcoming Events

Join the Four Twenty Seven team at these upcoming events:

  • January 23 – From Sciences Po to the Economic Risk of Climate Change, San Francisco, CA: Hear Founder & CEO, Emilie Mazzacurati, speak at this Sciences Po American Foundation event at 6:30pm. Use discount code 427 for a $10 ticket.
  • February 12 – Investing for Impact, New York, NY: Emilie Mazzacurati will present on adaptation as an impact investment opportunity at this annual convening hosted by The Economist.
  • March 20-22 – Climate Leadership Conference, Baltimore, MD: Emilie Mazzacurati will speak about the evolving landscape of climate risk disclosure.
  • April 10-12 – RI Asia Japan, Tokyo, Japan: Chief Development Officer, Frank Freitas, will present on climate analytics for investors and Emilie Mazzacurati will also join this convening.
  • April 13-16  – APA National Planning Conference, San Francisco, CA: Director of Advisory Services, Yoon Kim, and Director of Analytics, Nik Steinberg, will speak on a panel called, "Beyond Vulnerability: Innovative Adaptation Planning."
  • April 23-25 – National Adaptation Forum, Madison, WI: Editor, Natalie Ambrosio, will present on local adaptive capacity from a private sector perspective. 
  • April 29 - May 1  – Ceres Conference 2019, San Francisco, CA: The Four Twenty Seven team will join investors and corporations at this annual gathering.
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Copyright © 2019 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:
Four Twenty Seven
2000 Hearst Ave
Ste 304
Berkeley, CA 94709

Emilie Mazzacurati Named to the Top 100 in Finance

JANUARY 15, 2019 – BERKELEY, CA – Market Intelligence provider Four Twenty Seven is pleased to announce that Founder & CEO, Emilie Mazzacurati, has been named to The Top 100 Magazine’s, Top 100 in Finance for 2018.

“I’m honored to be recognized by The Top 100 Magazine,” says Emilie.  “We’re pushing the boundaries of how the financial world thinks about climate change, and appreciate the recognition on how our work helps drive the conversation on climate risk.”

Emilie founded Four Twenty Seven in 2012, just after Hurricane Sandy devastated the Atlantic Coast. Inflicting nearly $70 billion in damages, the storm provided the world with a vivid demonstration of how climate change affects the financial markets. She elaborates, “I’m proud that Four Twenty Seven has become the market leader for data on the physical impacts of climate change in financial markets. By helping investors account for those risks, we help build resilience for our clients but also for society at large.”

The full awards and magazine issue will be released in late February. The Top 100 enterprise publishes the most popular biography-based titles in the industry. They are the original producer of The Top 100 Magazine and other publications such as The Top 40 Under 40, The Top 100 Lawyers, The Top 100 Doctors, The Top 100 Women in Business, and many more.

Read The Top 100 Magazine article. 

Newsletter: A Dire Warning

Four Twenty Seven's monthly newsletter highlights recent developments in climate adaptation and resilience. This month, we focus on recent scientific evidence of growing climate impacts, and highlight new resources to help the financial sector take action and manage exposure to climate change.

In Focus: Science Calls for Urgent Action

Recent Scientific Reports Send Dire Warning on Rapid Climate Change

At least 15 extreme weather events during 2017 were made more likely due to climate change according to the seventh "Explaining Extreme Events" report released last week. The research by the American Meteorological Society examined 16 extreme weather events for climate fingerprints, finding that climate change influenced events ranging from droughts in the U.S. and East Africa to floods in South America, China and Bangladesh, and heat waves in the Mediterranean and China.

Also released last week, NOAA's 2018 Arctic Report Card finds that Arctic air temperatures are still warming twice as fast as elsewhere and that sea ice was younger, thinner and less extensive than other years in 2018.

These findings come on the heels of the Intergovernmental Panel on Climate Change special report on global warming of 1.5 °C above pre-industrial levels. This report showed that warming of 1.5°C by 2050 will significantly affect global heat waves, arctic sea ice, sea level rise, species lost, crop yields coral reefs and fisheries. This in turn, will lead to cascading impacts on communities and economies globally.
 

Further Reading

  • About one-third of the Arctic's infrastructure is on permafrost that has a high chance of thawing by mid-century, based on warming that is already locked in, according to a new report published in Nature (read the summary on Earther). 
  • The New York Times' Brad Plumer outlines five key adaptation takeaways from the U.S. 4th National Climate Assessment, which includes a chapter on adaptation.
  • This is an engaging and deep exploration of the diverse impacts of climate change on ocean life and the rippling effects it has on economies and livelihoods around the world, from Reuters. 
Four Twenty Seven Wins Risk Markets Technology Alternative Data Provider Award 

Award Reflects Growing Interest of Financial Markets in Climate Data

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.

The award from Risk Magazine is a clear signal that financial markets are starting to take climate risk seriously. 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 and they're increasingly eager for this data. A judge noted that Four Twenty Seven's “Deep datasets and sophisticated analytics, [are] setting a high bar in what will become of increasing concern to investors.” 

Announcements at COP 24 echoed this theme, as 415 asset managers wrote a letter urging their governments to act on climate change, accompanied by a briefing paper for policy-makers emphasizing the economic risks posed by climate change and the importance of the Paris Agreement. Investor action is also growing in the U.S., where banks such as Bank of America and BNP Paribas joined the new U.S. Alliance for Sustainable Finance to help propel adaptation and clean energy investment in the U.S. 
Read Risk Magazine's Announcement
Industry Guidance on Financial Climate Risks

Navigating Climate Scenario Analysis

This guide to scenario analysis provides resources for institutional investors to leverage scenario analysis for both transition and physical risks. The Institutional Investors Group on Climate Change (IIGCC) highlights 10 key takeaways, surveying the current landscape of scenario analysis and emphasizing the importance of understanding the process and intentionally weighing the trade-offs between comprehensive and simple approaches. IIGCC also includes examples from asset managers already working on this and features a list of curated data providers, including Four Twenty Seven. 

Getting started on Physical Climate Risk analysis in finance -
Available approaches and the way forward

The Institute for Climate Economics surveys the landscape of financial climate data providers, in this report for investors. The report provides a detailed comparison of relevant data offerings that currently enable investors to assess and address climate risk in their portfolios, including numerous references to Four Twenty Seven's data products for equities, munis, sovereigns and real assets. The analysis compares providers based on their time horizon, intended audience, hazards, granularity and use cases.

Experts on Climate Change

This DWS report integrates several perspectives on the implications of climate change for institutional investors, starting with a scientific call to action from Dr. Emily Shuckburgh at the British Antarctic Survey. The report is a compilation of essays covering the fiduciary duty of trustees to understand the materiality of climate risks, actuarial responsibility to consider climate change, the current landscape of regulation around climate risks and pension funds' view of climate change, and an approach to integrating climate risk into an ESG engine. 

The Private Sector's Climate Change Risk and Adaptation Blind Spots


New research on corporate CDP responses reveals that corporate disclosures likely underestimate the costs of physical climate-related risks and that few companies disclosed indirect climate risks relating to the broader community, which affect businesses through supply chains, consumer preferences, and employee commutes. The report shows 76% of companies reporting climate risks use soft adaptation approaches, such as planning, 47% used hard approaches such as technology upgrades and only 3.3% reported ecosystem-based adaptation. As more businesses asses their exposure to climate change risks, they must take the next step of investing in adaptation.
Upcoming Events

Join the Four Twenty Seven team at these upcoming events:

  • January 6-10 – 99th AMS Annual Meeting, Phoenix, AZ: Senior Data Analyst, Josh Turner, will present a poster on the California Heat Assessment Tool and Senior Data Analyst, Colin Gannon, will also join 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 Founder & CEO, Emilie Mazzacurati, present on adaptation as an impact investment opportunity at this annual convening hosted by The Economist.
  • March 20-22 – Climate Leadership Conference, Baltimore, MD: Emilie Mazzacurati will speak about the evolving landscape of climate risk disclosure.
  • April 10-12 – RI Asia Japan, Tokyo, Japan: Chief Development Officer, Frank Freitas, will present on climate analytics for investors.  
  • April 13-16  – APA National Planning Conference, San Francisco, CA: Yoon Kim and Director of Analytics, Nik Steinberg, will speak on a panel called, "Beyond Vulnerability: Innovative Adaptation Planning."
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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:
Four Twenty Seven
2000 Hearst Ave
Ste 304
Berkeley, CA 94709

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:
Four Twenty Seven
2000 Hearst Ave
Ste 304
Berkeley, CA 94709

Four Twenty Seven Received ISAR Honours

OCTOBER 24, 2018 – GENEVA, SWITZERLAND – Four Twenty Seven received ISAR Honours for asset-level climate risk scores.

ISAR Honours recognized Four Twenty Seven’s contribution to developing best practices on corporate reporting. The Intergovernmental Working Group of Exports on International Standards of Accounting and Reporting (ISAR) supports progress on the Sustainable Development Goals (SDGs) by fostering corporate transparency, good governance and sustainability standards. Its awards aim to foster the dissemination of initiatives that improve global corporate reporting and integrate environmental, social and governance factors into reporting cycles. ISAR is convened through The United Nations Conference on Trade and Developments (UNCTAD).

“Four Twenty serves governments and cities, corporations and financial institutions,” Four Twenty Seven’s Director, Europe, Nathalie Borgeaud said during the awards ceremony. “We inform about the physical climate risks they incur. We inform about floods, cyclones and sea level rise and we inform about extreme heat and droughts, for each of their assets, with forward-looking, science-driven data. In order for all to develop  meaningful resilience strategies, we inform about the future that is knocking on our door. And we all know it is knocking hard.”

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Explore Four Twenty Seven’s award-winning equity risk scores and other climate data analytics that enable investors, corporations and governments to understand climate risk exposure and build resilience.

PRI Webinar: Measuring and Managing Physical Climate Risk

This PRI webinar, hosted in conjunction with DWS, discusses recent research in identifying physical climate risks and integrating this information into investment decisions. DWS shares its process for leveraging Four Twenty Seven’s equity risk scores to create a climate-optimized index.

Speakers

  • Murray Birt, ESG Thematic Research Strategist at DWS, breaks down physical climate risk and its financial impacts.
  • Emilie Mazzacurati, Founder & CEO of Four Twenty Seven, presents a methodology for assessing and visualizing climate risk in portfolios.
  • Edward Baker, Senior Policy Advisor at PRI, shares new investor data on climate risk reporting under the TCFD recommendations.
  • Gerold Koch, Director of Passive Product Development at DWS, discusses DWS’ strategy for creating a climate-optimized index.
  • Jessica Elengical, Head of ESG Strategy, Alternatives at DWS, speaks about the impacts of physical climate risks on real estate investments.

Time and Tides – Flooding in Japan

July 15, 2018 – 427 ANALYSIS: Record-setting rains in Japan led to floods and landslides that disrupted business operations of automobile manufacturers, electronic companies and others. Understanding the ownership and operations of facilities located 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.

Japan was the inundated by over 70 inches of rain in early July, an event that resulted 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.

Typhoons Prapiroon and Maria contributed to this rainfall and climate scientists expect a warmer climate to increase the severity of these storms. Japan has fewer preparations in place for floods than it does for other extreme events, and understanding the various manifestations of risk caused by extreme rainfall is essential to mitigating damage in the future.

Much of Okayama sits immediately below mountains, which makes it particularly exposed to devastating landslides following significant rainfall events. Bursting pipes and power outages led over 250,000 homes in the Okayama and Hiroshima Prefectures to go without water for several days after the floods. Landslides destroyed homes and exacerbated infrastructure damage caused by flooding.

Many business operations were severely impacted by these events as well, and some facilities remain closed.  Companies such as Panasonic experienced physical damage due to flooded facilities, and others were impacted by damaged infrastructure and communities, impacting their supply chains and workforce.

Okayama and Hiroshima are centers of economic activity for a number of key sectors in Japan, hosting production facilities for auto manufacturing, consumer electronics, retail trade and others. The figure below highlights the concentration of facilities of companies in the auto manufacturing industry by the sector of their operations. Companies that rely heavily on manufacturing operations are particularly vulnerable to flooding due in part to their utilization of expensive equipment that can easily incur water damage.

The heavy rainfalls showed no favorites in their disruption of manufacturing facilities across industries. For example, Mitsubishi and Mazda halted operations at some factories during the storms, due in part to supply chain disruptions. Many companies were also forced to pause operations because employees couldn’t get to work. While Mazda’s headquarters in Hiroshima Prefecture and a production facility in Yamaguchi Prefecture weren’t damaged themselves, they remained closed after the storms until employees could return to work safely. Likewise IHI Corp. closed its No. 2 Kure factory in Hiroshima  because of water shortages and employees’ commute challenges.

The extent of   long-term economic impacts that these companies will bear in the aftermath of last week’s storms is not yet known, but merits ongoing examination as the region recovers. Understanding the location of a corporation’s facilities and their exposure to extreme weather events is a key starting point for gauging exposure, and therefore can be instrumental in understanding company’s future performance.

Four Twenty Seven’s extensive facility level database can help investors proactively identify their portfolio companies’ exposures both to chronic climate effects and to individual extreme weather events such as the extreme rainfall that beset Okayama and Hiroshima. This deeper understanding can drive better risk-return tradeoffs, and importantly, shareholder engagement strategies that foster investments in resilience.

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.