Four Twenty Seven Wins Climate Change Business Journal Awards

FEBRUARY 19, 2019 – SAN DIEGO, CALIFORNIA – Four Twenty Seven receives Climate Change Business Journal Awards for three climate change risk and resilience projects. 

The Climate Change Business Journal (CCBJ) released its 10th annual CCBJ Business Achievement Awards, recognizing outstanding business performance in the climate change industry. CCBJ assesses markets and business opportunities across the emerging climate change industry and acknowledged Four Twenty Seven’s contributions to this field through our global dataset on climate risk in real estate, the development of the California Heat Assessment Tool and our contribution to the EBRD-GCECA initiative on Advancing TCFD Guidance on Physical Climate Risks and Opportunities.

Four Twenty Seven and GeoPhy earned the Technology Merit: Climate Change Risk Modeling and Assessment award for releasing the first global dataset on climate risk exposure in real estate investment trusts (REITs). REITs represent an increasingly important asset class that provides investors with a vehicle for gaining exposure to real estate portfolios. However, real estate is also increasingly affected by risks from climate change. Four Twenty Seven applied its scoring model of asset-level climate risk exposure to GeoPhy’s database of listed REITs holdings to create the first global, scientific assessment of REITs’ exposure to climate risk.

The California Heat Assessment Tool (CHAT) earned the Project Merit: Climate Change Adaptation and Resilience award for its innovative approach to helping public health officials, health professionals and residents understand what changing heat wave conditions mean for them, through a free online platform. CHAT is part of California’s Fourth Climate Change Assessment, a state-mandated research program to assess climate change impacts in California, and was developed by Four Twenty Seven, Argos Analytics, the Public Health Institute and Habitat 7 with technical support from the California Department of Public Health.

The European Bank for Reconstruction and Development and the Global Centre of Excellence on Climate Adaptation initiative on Advancing the TCFD Recommendations on Physical Climate Risks and Opportunities earned the Advancing Best Practices: Climate Change Adaptation and Resilience award. This project culminated in a conference and report building on Taskforce on Climate-related Financial Disclosure (TCFD) recommendations and providing common foundations for the disclosure of climate-related physical risks and opportunities. It identifies where further research or market action is needed so that detailed, consistent, industry-specific guidelines can be developed on the methodology for quantifying and reporting these risks and opportunities. Four Twenty Seven and Acclimatise provided the technical secretariat that led the working groups and authored the report.

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

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Climate Risk and Real Estate Investment Decision-Making

The Urban Land Institute, a cross-disciplinary real estate and land use network, and Heitman LLC, a global real estate investment firm, released a report on climate risk and response in the real estate sector. The paper explores the evolving understanding of climate risk in real estate and shares current best practices for measuring and managing risk. It highlights Four Twenty Seven’s asset-level risk screening of Heitman’s real estate portfolio and the Four Twenty Seven and GeoPhy analysis of climate risk exposure in REITs. Read the press release from the Urban Land Institute below, originally published on PR Newswire:

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LONDONFeb. 5, 2019 /PRNewswire/ — A new report from the Urban Land Institute (ULI), a global multidisciplinary real estate organization, and Heitman LLC (Heitman), a global real estate investment management firm, points to the pressing need for greater understanding throughout the industry of the investment risks posed by the impacts of climate change. It also highlights proactive measures by Heitman and other leading firms to stay at the forefront of mitigation strategies and accurately price risk into investment decisions.

Climate Risk and Real Estate Investment Decision-Making explores current methods for assessing and mitigating climate risk in real estate, including physical risks such as catastrophes and transitional risks such as regulatory changes, availability of resources and attractiveness of locations. Both types of risks have financial impacts for real estate, including higher operational costs and declining property values. The report, released today at ULI’s Europe Conference in London, is based on insights from more than 25 investors and investment managers in EuropeNorth America, and Asia Pacific, as well as existing research.

“Understanding and mitigating climate risk is a complex and evolving challenge for real estate investors,” said ULI Global Chief Executive Officer W. Edward Walter. “Risks such as sea-level rise and heat stress will increasingly highlight the vulnerability not only of individual assets and locations, but of entire metropolitan areas. This report shows that Heitman and other leading ULI members are prioritizing this issue with provocative approaches to better gauge and develop mitigation strategies. Building for resilience, on a portfolio, property and citywide basis, is paramount to staying competitive. Factoring in climate risk is becoming the new normal for our industry.”

“Opportunities are emerging across the real estate industry for investment managers and investors to better assess climate risk and navigate the potential impacts of climate change on assets and portfolios,” said Maury Tognarelli, Heitman Chief Executive Officer.  “More accurate, forward-looking data on the risks associated with climate change are becoming available, positioning the industry to incorporate climate risks into how investments are underwritten and portfolios constructed. Ultimately, we hope this report will spur discussion among real estate industry participants with the end-goal of improving the investment outcomes for our clients and constituents.”

The real estate industry as a whole has just begun the development of more advanced strategies to recognize, understand and manage risks, and for the most part presently relies on insurance to cover the majority of the shorter term, financial-oriented risks related to climate change, the report states. However, while insurance has remained generally attainable in risk-prone areas, being insured does not protect investors from a reduction in asset liquidity. That, along with the likelihood of future changes in insurance availability and costs, is prompting a growing number of investors and investment managers to explore new ways to build climate risks into their investment processes, including:

  • Mapping physical risk for current portfolios and potential acquisitions;
  • Incorporating climate risk into due diligence and other investment decision-making processes;
  • Incorporating additional physical adaptation and mitigation measures for assets at risk;
  • Exploring a variety of strategies to mitigate risk, including portfolio diversification and investing directly in the mitigation measures for specific assets; and
  • Engaging with policy makers on local resilience strategies.

Whether or not their assets have already been directly affected by the impacts of climate change, “investors see climate considerations as a necessary layer of fiduciary responsibility to their stakeholders, as well as an opportunity to identify markets and assets that will benefit from a changing climate,” notes the report. While early adapters have committed resources to gain knowledge and improve awareness of climate risk, in the coming years, methods are likely to become more sophisticated, it adds.

“The industry needs to be able to better measure the value impact so it can base its future decision-making on a quantitative rather than qualitative understanding of the risks and the potential return on investment from investing in mitigation strategies for their assets.”

While awareness of climate risk is growing, none of the report’s interviewees have yet ruled out attractive investment markets solely because of that risk, the report says. Still, interviewees emphasized the need to invest in a “sensible and smart” way in markets where physical risks from climate change are evident.

Climate Risk shows that leading investment managers and institutional investors are at various points in the undertaking of resilience scans of their portfolios. These scans help to identify vulnerabilities and impacts resulting from sea-level rise, flooding, heavy rainfall, water stress, extreme heat, wildfires and hurricanes. This includes short-term considerations such as business disruption for building tenants as well as higher operating and capital costs caused by increased wear and tear on properties.

The report highlights Heitman’s use of emerging technology that combines next-generation climate maps with real estate data to manage climate risk. Providers of this technology use scientific climate models that project long-term, global climate change impacts and clarify the degree of exposure to both extreme weather events and chronic industry-disrupting fluctuations, such as rising seas. The report also shows how Heitman integrated the analysis into its investment decision-making, noting that the company also considers if and how an asset and the community in which it is located has already begun to mitigate climate risks. “The climate risk assessment contributes to a holistic approach (by Heitman) to constructing global property portfolios,” says the report. “If a portfolio is determined to have a higher-than-targeted exposure, it can be rebalanced over time through limiting new acquisitions or exiting existing assets exposed to a certain risk.”

As a whole, the industry needs to understand the pricing impacts of physical climate risks, and how climate change is likely to have a bigger impact on valuation in the future as asset and market liquidity are affected, the report says. It identifies several steps to raise awareness, such as:

  • Improve analyses of climate risk in annual and quarterly reports. This helps create awareness among investment managers and investors and helps drive change.
  • Use big data to better understand patterns around changes in asset liquidity and value, and weather forecasting.
  • Work with the insurance industry to understand data and gain knowledge on how climate change is affecting premiums and coverage.
  • Engage with city leaders in vulnerable areas to support city-level commitment to and implementation of physical and transitional risk mitigation strategies.

“An eventual downward repricing of higher-risk assets will be the market’s way of redirecting capital to locations and individual assets where it is expected to be better insulated from these particular risks. This process will be painful for investors who are caught off guard, but those who are prepared have the potential to outperform,” the report concludes.

Climate Risk and Real Estate Investment Decision-Making was prepared through a collaborative effort between Heitman; ULI UK, which serves the institute’s members in the UK; and ULI’s Center for Sustainability and Economic Performance. The center provides leadership and support to real estate and land use professionals to invest in energy-efficient, healthy, resilient, and sustainable buildings and communities.

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For more on climate risk in real estate read Four Twenty Seven and GeoPhy’s assessment of asset-level risk exposure in real estate investment trusts (REITs) and find out more about our REITs data product.

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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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: 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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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

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.

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.

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.

Climate Risk, Real Estate, and the Bottom Line

OCTOBER 11, 2018 – BOSTON, MA – Four Twenty Seven & GeoPhy Release First Global Dataset on Real Estate Investment Trusts’ Exposure to Climate Change. 

Four Twenty Seven and real estate technology company GeoPhy today announce the release of a data product that provides granular projections of the impacts of climate change on real estate investment trusts (REITs). REITs represent an increasingly important asset class that provides investors with a vehicle for gaining exposure to portfolios of real estate. The data was launched at the Urban Land Institute Fall Event in Boston, MA, accompanied by a white paper that lays out the implications of climate risk for the real estate sector.

Four Twenty Seven applied its scoring model of asset-level climate risk exposure to GeoPhy’s database of listed real estate investment trusts’ (REITs) holdings, to create the first global, scientific assessment of REITs’ exposure to climate risk. The dataset includes detailed, contextualized projections of climate impacts from floods due to extreme precipitation and sea level rise, exposure to hurricane-force winds,  water stress and heat stress for over 73,500 properties owned by 321 listed REITs.

“Real estate is on the frontline of exposure to climate change” said Emilie Mazzacurati, founder and CEO of Four Twenty Seven. “Many valuable locations and markets are often coastal or near bodies of water, and therefore are going to experience increases in flood occurrences due to increases in extreme rainfall and to sea level rise.” she noted. “These risks can now be assessed with great precision — the availability of this data provides investors with an opportunity to perform comprehensive due diligence which reflects all dimensions of emerging risks.” she concluded.

“The market has begun to price in the potential impacts of fat-tail climate events” noted Dr. Nils Kok, Chief Economist of GeoPhy. “Properties exposed to sea level rise in some parts of the United States are selling at a 7% discount to those with less exposure, and the value of commercial real estate is expected to equally reflect these risks. Leveraging forward-looking data on risk exposure can allow REIT investors to anticipate changes in market valuations and react accordingly.”

Read the report: Climate Risk, Real Estate, and the Bottom Line.

Key findings include:

  • 35 percent of REITs properties globally are currently exposed to climate hazards. Of these, 17 percent of properties are exposed to inland flood risk, 6 percent to sea level rise and coastal floods, and 12 percent to hurricanes or typhoons
  • U.S. markets most exposed to sea level rise include New York, San Francisco, Miami, Fort Lauderdale, and Boston. The high-value REITs most exposed to sea level rise in the U.S. are Vornado Realty Trust and Equity Residential.*
  • Globally, REITs concentrated in Hong Kong and Singapore display the highest exposure to rising seas. Sun Hung Kai Properties, worth $56 billion, has over a quarter of its properties exposed to coastal flooding.
  • 37 Japanese REITs have their entire portfolio exposed to the highest risk for typhoon globally, representing $264.5 billion at risk in properties in Tokyo and other Japanese cities.

Read the report Climate Risk, Real Estate, and the Bottom Line.

Download the Press Release.

*Erratum: A previous version of this blog post mentioned in error that CapitaLand is one of the U.S. REITs most exposed to sea level rise. CapitaLand is a Singapore-based REIT with some exposure to sea level rise but it is not among the most exposed.

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

Newsletter: California’s Fourth Climate Change Assessment

Four Twenty Seven's monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don't miss the new California Heat Assessment Tool, funding opportunities for risk mitigation and a preview of resilience events at upcoming conferences!

In Focus: Health-based Heat Projections

Four Twenty Seven tool developed under California’s Fourth Climate Change Assessment identifies regions most vulnerable to extreme heat

The California Heat Assessment Tool helps identify neighborhoods with populations vulnerable to heat and overlays projections for heat events likely to cause health impacts. This new research establishes local, health-based thresholds for extreme heat that help public officials, health professionals and residents understand what changing conditions mean for them. The tool can be searched by city, county or zip code and provides data at the census tract level.

Four Twenty Seven developed the tool with funding from the California Natural Resources Agency, in partnership with Argos Analytics, the Public Health Institute and Habitat Seve, and  technical support from the California Department of Public Health.

Access the Tool
California Releases Fourth Climate Change Assessment 

“In California, facts and science still matter,” said Governor Edmund G. Brown Jr. “These findings are profoundly serious and will continue to guide us as we confront the apocalyptic threat of irreversible climate change.”

Released yesterday, California's Fourth Climate Change Assessment includes 44 projects advancing actionable science to serve the growing needs of state and local-level decision-makers from a variety of sectors. Explore all technical reports and outputs at www.ClimateAssessment.ca.gov

"State energy officials said the assessment underscores the urgent need not only for swift global reductions in greenhouse gas emissions but also local actions to protect California from warming that’s already threatening people, natural resources and infrastructure." The Los Angeles Times reports.

“We’re seeing that in the fire situation, we’re seeing that in sea level rise, we’re seeing that in heat spells, in declining snowpack,” said California Energy Commission Chairman Robert Weisenmiller. “The climate is changing now so we need to be adapting our communities.”

Four Twenty Seven at GCAS and PRI

Join our GCAS side event on Sept. 11 in San Francisco

Safeguarding local infrastructure, businesses and the economies they support requires an understanding of the interconnected nature of the climate vulnerabilities of communities, businesses and financial institutions.

This affiliate side event, hosted by Four Twenty Seven, will feature investor, business and government thought leaders to discuss cutting edge projects and collaboration to build community and economic resilience. From 8:30-11:30am on Sept. 11 at Arup. 

This is a free invite-only event with limited capacity. Please express interest to be added to the list and we will review and confirm your registration shortly.
Express Interest

Join Four Twenty Seven at other side events on climate resilience

 
Looking for other applicable events? We've compiled a list of resilience-related side events that are pertinent for investors, corporations and communities. Browse our Google Doc, updated on an ongoing basis, to spot the most interesting side events on climate risk and climate science. Email nambrosio@427mt.com if you'd like your event to be included in our curated list.
More Events
Four Twenty Seven at CAF This Week

Join as at the California Adaptation Forum today and tomorrow! Visit our booth and meet with the team at the following panels:

  • Today from 1:05-1:25pm: Senior Data Analyst, Josh Turner, will demo the California Heat Assessment Tool at the Tools Salon.
  • Today from 2:55-4:10pm: Director of Advisory Services, Yoon Kim, will moderate a panel on "Heat Resilient Transit and Cool Streets." 
  • Today from 4:25-5:50pm: Yoon will moderate a panel, "Who Pays? The Implications of Liability, Insurance, And Credit Ratings on Adaptation Finance."
  • Wednesday from 9:30-10:45am: Manager, Advisory Services, Kendall Starkman will moderate a panel, "From Idea to Action: Mobilizing Adaptation Implementation Through Partnerships."
  • Wednesday at 1:30pm: Kendall will speak at the event, "ASAP Members Lead the Transfer of Adaptation Takeaways to GCAS tomorrow at 1:30pm. Editor, Natalie Ambrosio, will speak at the annual in-person ASAP meeting during the second half of this session.
Funding Opportunities to Build Resilience

Several funding opportunities for hazard mitigation projects in California

  • PDM and FMA Funding Opportunities:There is $235,200,000 nationwide for the PDM Program and $160,000,000 nationwide for the FMA Program, which provide funding for the development of local hazard mitigation plans (LHMPs) and implementation of hazard mitigation projects.The Notice of Interest for both grants is due by September 4, 2018. For more information visit Cal OES or email PDFM@caloes.ca.gov. 
  • Hazard Mitigation Grant Program (HMGP) – DR-4382 funding opportunity: HMGP funding is available statewide for any eligible mitigation activity.  Eligible activities also include Climate Resilient Mitigation Actions (CRMAs), such as actions supporting aquifer storage and recovery, flood diversion and storage, floodplain and stream restoration, and green infrastructure methods.  More info forthcoming on Cal OES. Or contact HMGP@caloes.ca.gov for more information. 
Upcoming Events

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

  • September 11 - Building 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 contributing to climate-resilient cities and infrastructure. Express interest.
  • 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. More details above.
  • September 12-14 – Global Climate Action Summit, San Francisco, CA: CEO Emilie Mazzacurati to speak at a session on resilience in this convening of global leaders meant to propel action around the Paris Agreement. More details above.
  • September 24-26 – 2018 Great Lakes Adaptation Forum, Ann Arbor, MI: Director of Advisory Services, Yoon Kim, will join this gathering of practitioners and scholars dedicated to building regional resilience.
  • September 24-30Climate Week NYC, New York, NY: Senior Analyst, Lindsay Ross, will join discussions around physical climate risk and resilience at this annual event. 
  • October 4 – Japan Electronic Trading Conference 2018, Tokyo, Japan: CEO Emilie Mazzacurati will speak about how physical climate risk affects investing strategies at this gathering of the FIX Trading Community. 
  • October 8-11 – ULI Fall Meeting, Boston, MA: Founder & CEO, Emilie Mazzacurati to join a panel on assessing climate risk in the real estate industry.
  • October 8-12 – Paris InfraWeek, Paris, France: Director, Europe, Nathalie Borgeaud, will join this discussion of recent developments in infrastructure finance.
  • October 15 - Deutsche Bank ESG Summit, Boston, MA. COO Colin Shaw will join a panel on climate risk in equities. Invitation-only.
  • October 16-18 – Verge 18, Oakland, CA: Yoon Kim will join this convening focused on developing a resilient, green economy.
  • October 23-26 – SOCAP18, San Francisco, CA: Members of the Four Twenty Seven team will participate in the annual Social Capital Markets conference.
  • 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 26-28 – UNEP FI Global Roundtable & Climate Finance Day, Paris, France: Emilie Mazzacurati and Nathalie Borgeaud will participate in these two evens dedicated to mobilizing the financial sector to create a sustainable financial system.
  • December 3-14 – COP24, Katowice, Poland: Nathalie Borgeaud and Yoon Kim will attend the 24th Conference of the Parties to the United Nations Framework Convention on Climate Change and participate in side events.
  • December 5-6 – RI Americas, New York, NY: Emilie Mazzacurati to join a panel on climate risk in real estate markets. Visit the Four Twenty Seven booth.
  • December 10-14 – AGU Fall Meeting, Washington, DC: Director of Analytics, Nik Steinberg, Senior Data Analyst, Josh Turner and Lindsay Ross will join this annual convening of the Earth and space sciences community. 
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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 financial institutions, corporations, and government institutions.

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