Four Twenty Seven Wins Risk Markets Technology Award

NOVEMBER 27, 2018 – LONDON, UK – Four Twenty Seven Wins Risk Markets Technology Award for Alternative Data Vendor of the Year for 2019.

Four Twenty Seven was awarded the 2019 Risk Markets Technology Award for Alternative Data Vendor of the Year. The Risk Awards are the longest-running and most prestigious among industry commendations,  recognizing leadership in the global derivatives markets and in risk management.

Investors who wish to develop a fully-informed view of their portfolios need forward-looking data on the impacts of climate change on corporations and public issuers that incorporate the most recent developments in climate science. Risk Magazine recognized Four Twenty Seven’s  work to fill this void. “Rapid intensification of the effects of both acute climate events like hurricanes and wildfires and chronic effects like sea level rise and increases in temperatures present an increasingly meaningful type of exposure for investors,” said Emilie Mazzacurati, Four Twenty Seven Founder and CEO. “This risk is currently only priced into the market ex post – we see corrections in asset prices in the wake of events only to the extent that their exposure to these events is known.”

Four Twenty Seven helps firms price the risk ex ante by extracting data from global climate models and other scientific datasets to project asset-level risk exposure to a number of hazards, including hurricane-force winds, sea level rise, flooding, heat stress and water stress. Four Twenty Seven’s database of risk exposures, now scores over one million corporate facilities representing 2,000 of the worlds largest companies, combining exposure with detailed data on market and supply chain characteristics.

“Our data is catalyzing change across the financial sector,” said Mazzacurati. “Our analytics help leading investors and corporations understand climate change’s impact on their assets and take steps to reduce this risk by investing in resilience.” Four Twenty Seven’s clients include pension funds, asset managers, corporations, development banks and regulators, who use our analytics to understand risks in their existing portfolios, assess risks of potential asset acquisitions and engage with management teams to build resilience in supply chains and physical assets.

Download the 2019 Risk Markets Technology Awards Announcement.

Read Risk Magazine’s article.

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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Webinar: Climate Risk in Real Estate

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

Download the slides, including links to resources discussed during the presentations and additional Q&A slides based on the webinar.

Summary

  1. Context and Introductions: Dr. Nils Kok, Chief Economist at GeoPhy and Emilie Mazzacurati, Founder and CEO of Four Twenty Seven
  1. Data and Methodology: Dr. Nils Kok presents GeoPhy’s database of REITs holdings and Nik Steinberg, Director of Analytics at Four Twenty Seven, shares Four Twenty Seven’s scoring methodology for climate risk exposure.
  1. Key Findings: Kendall Starkman, Manager at Four Twenty Seven, presents key findings highlighted in the paper, Climate Risk, Real Estate, and the Bottom Line.
  1. Market Implications & Opportunities for Investors: Emilie Mazzacurati discusses best practices for integrating physical climate risk into financial risk disclosures for real estate investors and Chris Pyke, Research Officer, U.S. Green Building Council, shares results from the GRESB Resilience Module and discusses plans to support reporting on climate risk.

Read more about Four Twenty Seven and GeoPhy’s REITs data product and our other solutions for investors.

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.

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.

Newsletter: US Munis Increasingly Vulnerable to Floods, Storms and Drought

 

 

Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss our new report on muni climate risk exposure, details on upcoming Four Twenty Seven webinars and an update on risk disclosure resources!

In Focus: U.S Munis Increasingly Vulnerable to Floods, Storms, and Drought

New report from Four Twenty Seven analyzes exposure to climate hazards in U.S. muni market


Our latest report Assessing Exposure to Climate Change in U.S. Munis identifies U.S. cities and counties most exposed to the impacts of climate change. As credit rating agencies start integrating physical climate risk into their municipal ratings, our new climate risk scores help inform investors with forward-looking, comparable data on the climate risks that impact these municipalities. Learn more about Four Twenty Seven climate risk scores for cities and counties and options to finance city resilience in our Webinar: Building City-level Climate Resilience, May 23.

Read the Report

Advancing TCFD Guidance on Physical Climate Risk and Opportunities

EBRD and GCECA Conference on May 31

Advancing TCFD Guidance on Physical Climate Risks and Opportunities is a targeted initiative to lay the foundations for a common conceptual framework and a standard set of metrics for physical climate risks and opportunities disclosures. Working with thought-leaders in the financial and corporate sectors, the European Bank for Reconstruction and Development (EBRD) and the Global Climate Center for Excellence on Climate Adaptation (GCECA), with the support from technical experts Four Twenty Seven and Acclimatise, developed a set of technical recommendations on metrics for risks and opportunities disclosures.

The final report will be released during a conference held at the EBRD’s headquarters in London on May 31st, 2018. Four Twenty Seven founder and CEO Emilie Mazzacurati will facilitate the panel discussion on the project’s key findings with Murray Birt from DWS, Simon Connell from Standard & Chartered, Craig Davies from EBRD, and Greg Lowe from AON.

TCFD Knowledge Hub

The recently launched TCFD Knowledge Hub is a curated platform of insights and resources on climate risk reporting. Users can search by keyword or sort for resources by the four TCFD themes. There is a broad set of research, tools and frameworks for implementing the TCFD recommendations, including our Lender’s Guide for Considering Climate Risk in Infrastructure Investments, our Technical Brief on Using Climate Data and a Climate Scenario Guide for Investors.

Helping Banks Build Climate Resilience

Acknowledging that financial impacts, regulatory pressures and industry action all point toward the need for climate-related risk disclosure and more comprehensive data, IDB Invest asserts that what may have formerly been ancillary ESG factors must now be central to business decisions. They report on four key messages from their annual Sustainability Week, in their article “Four insights for banks willing to seize sustainable finance opportunities.” 

The key takeaways are that risk analysis must include more than solely financial data, technology is a crucial ally in translating data into actionable insights, new ways to understand risk bring new market opportunities, and prioritization of ESG and climate analysis demand shifting human capital needs. Four Twenty Seven provided one of the featured new technologies, combining climate data with data on bank’s credit portfolios to assess climate-related risks and new market opportunities for banks in Ecuador. Read more.

Tomorrow! Four Twenty Seven Webinar:
Building City-level Climate Resilience

Wed, May 23, 2018 11:00AM – 12PM PT 

Four Twenty Seven is hosting a webinar to provide insight into concrete actions that cities can take to more effectively attract investor financing for climate adaptation and resilience, and share findings from our comprehensive analysis of city-level physical climate risks in the U.S. The webinar will be recorded and made available in the Insights section of our website. Register here.

Save the date – Four Twenty Seven Webinar:
Metrics for Physical Climate Risks Disclosure

Four Twenty Seven will host a webinar on TCFD reporting, emerging metrics and best practice for physical climate risks and opportunities disclosures. We will provide insights and lessons from the front line on:

  • How to use climate data to assess risks
  • Do’s and don’ts of scenario analysis
  • How to structure your TCFD/Art. 173 disclosures
  • Strategies for corporate engagement

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

The Third California Adaptation Forum

The biennial California Adaptation Forum will take place in Sacramento from August 28-29. This multidisciplinary gathering of adaptation professionals and local stakeholders will include plenaries, workshops and sessions discussing trends in climate resilience, forward-looking adaptation policy, strategies for adaptation finance and new tools.

Upcoming Events

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

  • May 23: Four Twenty Seven Webinar Building City-level Climate Resilience, 11am-12pm PT: This webinar will discuss city level physical climate risks and opportunities to access climate adaptation and resilience financing. Register here.
  • May 23: Capital Region Climate Readiness Collaborative Quarterly Meeting, Sacramento, CA: Advisory Services Manager, Kendall Starkman, will join this quarterly meeting focused on the drivers of poor air quality in the Capital Region.
  • 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 Chief Development Officer, Frank Freitas, and Senior Risk Analyst, Léonie Chatain, to discuss ratings and engagement on physical climate risk in equities.
  • June 7-9: 7th Sustainable Finance Forum, Waddesdon, UK: COO Colin Shaw will speak on a panel called “Supply chain transparency and network analysis” 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 12-14: VERGE Hawaii, Honolulu, HI: Kendall Starkman, will speak about Four Twenty Seven’s heat assessment work at 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 12-14: PRI 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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