Newsletter: US Climate Risk Disclosure, Climate at Moody’s ESG and more

Four Twenty Seven's monthly newsletter highlights recent developments in climate risk and resilience. This month we feature an analysis on US climate risk disclosure, highlight developments at Moody's ESG Solutions and share recordings of recent climate risk events.

In Focus: Are U.S. Corporates Ready for Climate Risk Disclosures?

Analysis: The State of Climate Risk Disclosure in the US

The results from the U.S. presidential elections signal an impending radical shift in U.S. climate policy. President-elect Biden’s transition team identified climate change as one of four top priorities, promptly followed with the appointment of John Kerry as special envoy for climate. As part of his transition plan, Biden announced ten executive actions related to climate change that he intends to take on his first day in office. One of these measures is the requirement for public companies to disclose climate risks and greenhouse gas emissions in their operations and supply chains. This disclosure requirement aligns with a global trend, following similar announcements in the UK and in New Zealand.

In light of this increasing focus on climate risk regulation, our latest analysis uses the TCFD Climate Strategy Assessment dataset from Moody's affiliate V.E to explore how US firms stand against policy recommendations outlined in recent reports by the US Commodity and Futures Trading Commission (CFTC) and the Business Roundtable (BRT), including implementing a carbon price, conducting scenario analysis and creating products that contribute to the transition to a low-carbon economy.

We find that the largest US corporations tend to be slightly behind in terms of disclosing key indicators compared to their international peers. However, among all assessed regions, not even a quarter of the firms disclose the indicators reviewed in this assessment. This demonstrates the significant room for progress and shows that increasing firms’ capacity to assess and disclose climate risks in an informative manner remains a global challenge, aligning with findings in the TCFD's 2020 Status report released last month.
Read the Analysis
Climate Risk at Moody's ESG Solutions

Emilie Mazzacurati Appointed Global Head of Moody's Climate Solutions

Moody's announced last week that Four Twenty Seven Founder and CEO, Emilie Mazzacurati will oversee the climate solutions suite within Moody’s ESG Solutions Group, a new business unit formed earlier this year to serve the growing global demand for ESG and climate analytics. As part of its climate solutions suite, Moody’s ESG Solutions provides risk measurement and evaluation tools to understand, quantify and manage physical and transition risks, informing due diligence and risk disclosure in line with the recommendations from the Taskforce on Climate-related Financial Disclosures (TCFD).
Emilie also remains CEO of Four Twenty Seven, which is now fully owned by Moody's. 

Moody's Analytics Wins Climate Risk Award at Chartis RiskTech100®

Moody’s Analytics won the Climate Risk category in the 2021 Chartis RiskTech100®  highlighting its commitment to integrating climate analytics into its world-class risk models.
Moody’s Analytics' offering helps customers first identify whether they have exposure to climate risk in their portfolios and then quantify the credit risk implication of climate risk factors. These solutions incorporate climate risk analytics from Moody's ESG Solutions powered by Four Twenty Seven and V.E.

Moody’s: Climate Risk and Resilience at US Airports

Climate change will expose the airport sector to increased physical climate risks within the next two decades. In its report, US airports face growing climate risks, but business model and resiliency investments mitigate impact, Moody’s Investors Service leverages Four Twenty Seven’s physical climate risk data to explore potential damages from increased exposure of US airports to floods, heat stress, hurricanes, sea level rise and wildfires. The report finds significant exposure to floods and sea level rise, which can damage crucial structures, leading to significant costs or rendering the assets unusable. Hazards such as heat stress and wildfires present risks with implications for take-off and landing. Airports often undertake long-term capital intensive projects and integrating resilience measures into planning these investments will be critical. Register for free to read the report.
Climate Change and Financial Stability

Financial Stability Board Releases Report on Climate Risk

Yesterday the Financial Stability Board (FSB) released its report, The Implications of Climate Change for Financial Stability, outlining the ways in which physical and transition risks may affect the financial system. It highlights how physical risks can decrease asset prices, increasing uncertainty and how a disorderly transition could also destabilize the financial system, while an orderly transition is expected to have a less significant impact on asset prices. Likewise, the report emphasizes that climate risk could amplify credit, liquidity and counterparty risks and interact with other macroeconomic risks, with significant implications for financial stability.
Earlier this month the Federal Reserve announced its application to join the Network for Greening the Financial System, expecting to gain membership by the group's annual meeting next April. The Governor of the US Federal Reserve is also the Chair of the FSB and such recent events may foreshadow more attention to climate risks at the Fed.
Public Consultations on Climate Risk

EIOPA Consultation on Climate Change Scenarios

The European Insurance and Occupational Pensions Authority (EIOPA) opened a public consultation on its draft opinion on the supervision of the use of climate change risk scenarios in ORSA. This consultation is a follow-up to EIOPA's recommendations that insurers integrate climate risks into their governance and risk management beyond a one-year time horizon, aiming to provide additional guidance on the supervision of these processes. Respond by January 5, 2021.

Hong Kong SFC Consultation on Climate Risk Management for Funds

The Hong Kong Securities and Futures Commission (SFC) opened a public consultation on its proposed guidance for fund managers to integrate climate risk into their investment decision-making and to release climate risk disclosures. The guidance applies to all fund managers, while those with at least HK$4 billion under management would have to comply with additional requirements, such as disclosing more quantitative metrics. The recommendations reference the TCFD Recommendations to encourage consistency in risk disclosure. Respond by January 15, 2021.

TCFD Consultation on Forward-looking Metrics

The Task Force on Climate-related Financial Disclosures (TCFD) released a public consultation on decision-useful forward-looking disclosure metrics for financial institutions. Recognizing the growing need for standards guiding forward-looking, comparable climate risk disclosures, it solicits input on the utility and challenges of disclosing certain forward-looking metrics, including metrics on implied temperature rise and value at risk. Respond by January 27, 2021. 
 
Climate Analytics for Financial Risk Assessment: Panel Recordings

Moody's Analytics Synergy Americas Conference

Founder & CEO, Emilie Mazzacurati, and Moody’s Analytics Managing Director, Global Head of Quantitative Research, Jing Zhang, discuss the impacts of climate risk on credit risk in the panel, “How Floods, Wildfires, and Heat Stress Can Play a Role in Financial Reporting and CECL.” Register for free to access the recording.
 

Risk Australia Virtual 2020: Taming the Green Swan

Emilie Mazzacurati presents a keynote presentation titled “Taming the Green Swan: Incorporating Climate Risk into Risk Management.” She covers changes in the regulatory environment and how investors can use science to inform risk management and investment decisions. Emilie discusses progress made on climate risk disclosure to date, explains the latest thinking on conducting scenario analysis for climate risks and provides case studies of the economic impacts of climate risk in Asia and Australia. 
Webinar: How Real Estate Can Adapt and Prepare for Climate Risks

Join us on Thursday Dec. 10 at  9am PST / 12pm ET / 5pm GMT

We’re already seeing the impacts of climate change on our real assets—so how do we better prepare for future climate events? Four Twenty Seven will join CBRE, Measurabl and Nova Group GBC to discuss the full process of integrating physical climate risk management into real estate investment. The webinar will include an explanation of the climate data driving the analytics, how to understand physical climate risks alongside broader ESG data and how to leverage this information to mitigate risk by building resilience.

Speakers:
  • Zachary Brown, Director of Energy and Sustainability at CBRE
  • Yoon Kim, Managing Director, Global Client Services at Four Twenty Seven
  • Cameron Ravanbach, Account Manager at Measurabl
  • Rob Jackson, Vice President, Equity Markets Group at Nova Group, GBC
Register Here
Upcoming Events

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Copyright © 2020 Four Twenty Seven, All rights reserved.
Four Twenty Seven sends a newsletter focused on bringing climate intelligence into economic and financial decision-making for investors, corporations and governments. Fill in the form below to join our mailing list. As data controller, we collect your email address with your consent in order to send you our newsletter. Four Twenty Seven will never share your mailing information with anyone and you may unsubscribe at any moment. Please read our Terms and Conditions.
 

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Moody’s Analytics Wins Climate Risk Award at Chartis RiskTech100®

Moody’s Analytics received the Chartis RiskTech100® Climate Risk Award, highlighting its commitment to integrating climate risk analytics into its world-class credit models. As part of Moody’s ESG Solutions, Four Twenty Seven works closely with Moody’s Analytics, bringing data on granular, forward-looking physical climate risk exposure. Read the press release from Moody’s Analytics:

SAN FRANCISCO, November 23, 2020 – Moody’s Analytics has won the Climate Risk category in the 2021 Chartis RiskTech100®, the first year this category has appeared. It’s one of 10 awards for Moody’s Analytics to go along with the #2 overall ranking.

The Moody’s Analytics offering helps customers first identify whether they have exposure to climate risk in their portfolios and then quantify the impact of exposure to various climate risk factors.

“Expanding our climate risk capabilities is a top priority and one we have invested significantly in achieving,” said Dr. Jing Zhang, Managing Director and Global Head of Quantitative Research at Moody’s Analytics. “Severe climate events throughout 2020 underscore the importance and urgency for market participants to understand how climate change is already affecting—and will continue to affect—the risk and return of their portfolios.”

Measuring the physical risks associated with climate change is one piece of the climate risk management puzzle. Award-winning climate risk analytics from Moody’s ESG Solutions, powered by Moody’s affiliate Four Twenty Seven, a leading provider of physical climate risk data and V.E, a Moody’s affiliate with expertise in transition risk, ESG, and corporate disclosures, are being incorporated across Moody’s Analytics solutions. Moody’s climate solutions suite brings climate data into risk management tools, translating climate risk exposure into financial impact and credit risk across asset classes.

Our team recently conducted an AI-powered study of climate-related disclosures from roughly 12,000 companies, across industries and regions. Among the findings, which were presented to the Task Force on Climate-Related Financial Disclosures (TCFD) and are highlighted in the most recent status report on TCFD implementation: Only 17% of the companies examined had reported any climate-related information, and with significant variation in focus, content, and quality.

Capabilities from Moody’s ESG Solutions are also increasingly being leveraged by Moody’s Investors Service (the credit rating agency and sister company of Moody’s Analytics).

Moody’s ESG Solutions Group Appoints Global Head of Climate Solutions

Moody’s appoints Four Twenty Seven Founder & CEO, Emilie Mazzacurati, as Global Head of Moody’s Climate Solutions, with Moody’s ESG Solutions Group. Read the press release from Moody’s:

LONDON- (BUSINESS WIRE) – Moody’s announced today that it has appointed Emilie Mazzacurati as Global Head of Moody’s Climate Solutions. In this newly-established role, Ms. Mazzacurati will oversee the climate solutions suite within Moody’s ESG Solutions Group, a new business unit formed earlier this year to serve the growing global demand for ESG and climate analytics. Ms. Mazzacurati will report to Andrea Blackman, Global Head of Moody’s ESG Solutions. 

As global awareness and recognition of the financial risks posed by climate change increase, Moody’s is committed to meeting market needs for forward-looking, science-driven climate analytics that help advance a resilient financial system, responsible capitalism, and the greening of the economy,” said Ms. Blackman. “Emilie’s extensive climate expertise will be vital to our continued development of climate solutions and to ensuring that Moody’s is a leading voice in this important area.” 

As part of its climate solutions suite, Moody’s ESG Solutions provides risk measurement and evaluation tools to understand, quantify and manage climate risks for physical and transition risk, informing due diligence and risk disclosure in line with the recommendations from the Taskforce on Climate-related Financial Disclosures (TCFD).  

Climate risk analytics from Moody’s ESG Solutions are also integrated into Moody’s Analytics risk management tools, translating climate risk exposure into financial impact and credit risk metrics for banks, insurers, and investorsSimilarly, the group’s climate data and insights are increasingly being leveraged in Moody’s Investors Service credit analysisBy offering data and analytics across asset classes, including listed and unlisted companies, real estate, infrastructure, sovereigns and municipalities, Moody’s ESG Solutions supports the integration of climate-related risks into financial decision-making and risk management. 

Moody’s ESG Solutions climate offerings build on the award-winning physical climate risk analytics from Four Twenty Seven, leading provider of climate risk data and market intelligencefounded by Ms. Mazzacurati in 2012. Moody’s acquired a majority stake in Four Twenty Seven in 2019 and recently took full ownership. Moody’s climate solutions suite also leverages data from V.E, a Moody’s affiliate with expertise in transition risk, ESG, and corporate disclosures. 

ABOUT MOODY’S ESG SOLUTIONS 

Moody’s ESG Solutions Group is a business unit of Moody’s Corporation serving the growing global demand for ESG and climate insights. The group leverages Moody’s data and expertise across ESG, climate risk, and sustainable finance, and aligns with Moody’s Investors Service (MIS) and Moody’s Analytics (MA) to deliver a comprehensive, integrated suite of ESG and climate risk solutions including ESG scores, analytics, Sustainability Ratings and Sustainable Finance Reviewer/certifier services. 

For more information visit Moody’s ESG & Climate Risk hub at www.moodys.com/esg 

Newsletter: Climate Risk Increases Sovereign Risk

Four Twenty Seven's monthly newsletter highlights recent developments in climate risk and resilience. This month we share new research on climate risk and sovereign risk, discuss the climate implications of the U.S. election and highlight new data on EU Taxonomy alignment and TCFD disclosures.

In Focus: Climate Change and Sovereign Risk

Report: Cost of Sovereign Capital is Affected by Climate Risk

New joint research provides a comprehensive analysis of the ways in which climate risks affect sovereign risk. Published by the Centre for Sustainable Finance at SOAS University of London, the Asian Development Bank Institute, the World Wide Fund for Nature Singapore and Four Twenty Seven, the report, “Climate Change and Sovereign Risk,” outlines six transmission channels through which climate change affects sovereign risk and, in turn, the cost of borrowing. Using econometric analysis on a sample of 40 developed and emerging economies shows that higher climate risk vulnerability leads to significant rises in the cost of sovereign borrowing. 

The report also provides a closer look at Southeast Asia, a region with significant exposure to physical climate risks such as storms, floods, sea level rise, heat waves and water stress, as well as transition risks. The implications of climate change for macrofinancial stability and sovereign risk are likely to be material for most, if not all, countries in Southeast Asia.

Lastly, the report highlights the need for governments to climate-proof their economies and public finances. It outlines five policy recommendations, emphasizing the importance for financial authorities to integrate climate risk into their risk management processes and for governments to prioritize comprehensive climate vulnerability assessments and work with the financial sector to promote investment in climate adaptation.
Read the Report
Watch the Launch Event
US Presidential Election: Climate Implications

November's Election is Pivotal for Climate Change

Donald Trump and Joe Biden present significantly different approaches to climate change and environmental justice. Moody's Investors Service's report "Next administration will confront five policy challenges with wide-ranging credit impact," explores policy challenges the next administration will face, including environmental issues. The analysis writes that "Biden's economic plans include measures to address climate change. Trump's proposals do not prioritize addressing climate change or lowering carbon dependence."

Trump plans to continue his efforts to reduce regulation on fossil fuel emissions and pollution, supporting growth of the fossil fuel industry and completing the US withdrawal from the Paris Agreement. Meanwhile in addition to rejoining the Paris Agreement and planning for net-zero emissions by 2050, Biden would implement pollution regulation with a particular focus on environmental justice. Biden has also expressed his support for mandating that public companies disclose their climate risks and emissions. This National Geographic piece outlines Biden and Trump's respective records on climate change and environmental issues, as well as their future plans.
Handbook on Climate Risk Assessment

NGFS: Case Studies of Environmental Risk Analysis Methodologies

The Network for Greening the Financial System (NGFS) released a collection of case studies outlining methodologies for climate and environmental risk analysis for banks, asset managers and insurers. The compilation of approaches, written by academic researchers, financial practitioners and data providers highlights the latest developments in addressing data gaps, identifying how climate risk translates to financial risk, and leveraging climate data to build a resilient financial system.
Four Twenty Seven and Moody's Analytics contributed Chapter 2: "An Approach to Measuring Physical Climate Risk in Bank Loan Portfolios," and Moody's Investors Service wrote Chapter 27: "Moody's Approach to Incorporating ESG Risks into Credit Analysis."
New Data on Companies' Taxonomy Alignment & TCFD Disclosure

Vigeo Eiris Launches Taxonomy Alignment Screening & Request for Comment

Last week Moody's affiliate Vigeo Eiris (V.E) released the beta version of its Taxonomy Alignment Screening tool and a Request for Comment (RFC) to inform the final product, which will launch early next year. Comparable, comprehensive data on companies' alignment with the taxonomy will provide critical information for investors striving to align their portfolios with the taxonomy. 

The EU Taxonomy Regulation outlines criteria for activities contributing to six environmental objectives: climate mitigation; climate adaptation; protection of water and marine resources; transition to a circular economy; pollution prevention and control; and protection and restoration of biodiversity. It was formally adopted earlier this year, with criteria for climate change mitigation and adaptation; criteria for the other objectives are forthcoming.

To date, V.E has screened 1,587 European issuers based on their alignment with the taxonomy's three-part criteria: substantial contribution to one of the six environmental objectives, Do No Significant Harm and compliance with minimum social safeguards. Results show that many companies perform at least one of the 72 Taxonomy activities but few meet the technical criteria for the activities. This beta dataset is freely available upon request and the Request for Comment is open until November 1st, 2020.

How do Climate Risk Disclosures Align with TCFD Recommendations?

Consistent climate risk disclosure is essential to improving market transparency and building a more resilient financial system. As devastating extreme events, regulatory developments and investor pressure have led to an increase in climate risk disclosure, the Task Force on Climate-related Financial Disclosures’ (TCFD) recommendations have become a global reference. V.E's new TCFD Climate Strategy Assessment dataset provides a granular view of how 2,855 companies report in line with TCFD recommendations.

This new V.E and Four Twenty Seven report, Measuring TCFD Disclosures, explores the key findings from this assessment, highlighting companies’ disclosures in governance, strategy and risk management and providing a case study on how companies' risk disclosures compare to their exposure. We find that while 30% of companies have identified at least one climate-related risk that may affect their business, only 3% have disclosed enhanced due diligence for projects and transactions. 

Read the Report
Climate Risk in Real Estate

Report: Emerging Practices for Market Assessment

In their latest report, the Urban Land Institute (ULI) and Heitman explore how real estate investors are integrating an understanding of market-level climate risk into their decision-making. The report highlights the progress made in assessing climate risk at the asset-level, citing Four Twenty Seven's climate risk analysis. It also discusses the increasing importance of understanding both market-level risk as well as regional resilience measures and how much risk these efforts may mitigate.
Meanwhile, new research on coastal real estate markets finds that a decrease in sales often foreshadows a decrease in prices, which is already taking place in Miami-Dade County, Florida and throughout the state. Many experts think that an increased awareness of the risks of sea level rise is contributing to this trend.

New Resilience Category in ULI Awards for Excellence

The ULI Awards for Excellence honor development projects that demonstrate the highest standards throughout their process, including but not limited to the architecture and design phases. This year one of the five categories is Resilient Development, with application questions including the topics of physical and community resilience. Submissions are open and the early application deadline for ULI Americas is December 18, 2020.
Webinar: Climate Change for Banks

Join Us at 8am PST / 11am ET / 2pm BST next Tuesday Oct. 27th

Join the Moody's Sustainable Finance webinar series for next week's webinar, Responsible Approaches to Climate Change for Banks. Hear from climate risk experts and bank practitioners on ways in which climate change affects banks and how they can respond. The webinar will explore the effects of climate change on banks’ activities and the role banks can play in supporting resilience. We will discuss the ways in which climate change poses material financial risks to banks, as well as opportunities. Practitioners will share case studies of how they leverage climate data for decision-making.

Speakers:
  • Yoon Kim, Managing Director, Global Client Services, Four Twenty Seven (Moderator)
  • Sara Faglia, Senior ESG Analyst - Financial Sector, Vigeo Eiris
  • Michael Denton, Director - Enterprise Risk Solutions, Moody's Analytics
  • Craig Davies, Head of Climate Resilience Investments, European Bank for Reconstruction and Development
  • Imène Ben Rejeb-Mzah, Group CSR Head of Methodologies and Data, BNP Paribas
Register for Free
Inside the Office at Four Twenty Seven

Senior Climate Data Analyst, Research - Siraphob (Gain) Boonvanich

Four Twenty Seven welcomes Gain as a Senior Climate Data Analyst, Research. Gain optimizes cloud infrastructure and climate data processing to support the development of Four Twenty Seven's climate risk analytics. Previously, Gain worked at Weathernews Inc. where he helped transform cloud infrastructure and developed various weather research applications, including radar and satellite image processing, machine learning models and demand prediction. 

Join the team! 

Find open positions on our Careers page and visit Vigeo Eiris' and Moody's Careers pages for more opportunities in climate change and ESG.
Upcoming Events

Join the team online at these upcoming events and check our Events page for updates, including links to events not yet available:

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Copyright © 2020 Four Twenty Seven, All rights reserved.
Four Twenty Seven sends a newsletter focused on bringing climate intelligence into economic and financial decision-making for investors, corporations and governments. Fill in the form below to join our mailing list. As data controller, we collect your email address with your consent in order to send you our newsletter. Four Twenty Seven will never share your mailing information with anyone and you may unsubscribe at any moment. Please read our Terms and Conditions.
 

Our mailing address is:
Four Twenty Seven
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Berkeley, CA 94709

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Newsletter: Wildfires, Storms and Their Impacts on Credit Risk

Four Twenty Seven's monthly newsletter highlights recent developments in climate risk and resilience. This month we discuss the costs of climate hazards, share updates on Moody's ESG and highlight recent developments in climate risk regulation.

In Focus: The Current Reality of the
Climate Crisis

Devastating Human & Economic Costs of Wildfires

As cities on the West Coast take turns with the worst air quality in the world, and cope with evacuations and loss of life and property from record-breaking wildfires, there is increasing evidence about the longer-term implications of these devastating events. After several years of catastrophic fires in California, exacerbated by hot and dry conditions driven by climate change, homes in exposed areas are likely to decline in value, which in turn can increase mortgage default rate, with severe market implications.

Likewise, as the COVID-19 pandemic limits firefighting resources and makes evacuations particularly challenging, new research continues to emerge about the devastating health impacts of wildfire smoke. For example, "Researchers from the University of Tasmania identified 417 extra deaths that occurred during 19 weeks of smoky air, and reported 3,100 more hospital admissions for respiratory and cardiac ailments and 1,300 extra emergency room visits for asthma" during Australia's bushfires last year.

This is not just a current concern in the U.S., but rather wildfire potential is increasing  globally, and regions such as Brazil and Portugal are also enduring fires. Four Twenty Seven's recent analysis on global wildfire potential assesses how conditions will become more conducive to wildfires in regions around the world.
Read Wildfire Analysis

Dire Records Foreshadow Worsening Extremes

As wildfires ravage the west, Hurricane Sally began to hit southeastern Mississippi and the western Florida Panhandle on Tuesday. The slow-moving storm is expected to continue to drop rain and lead to heavy wind as it moves to shore on Wednesday. This is the 18th named storm of the Atlantic hurricane season and the earliest S-named storm on record. Several more hurricanes have already formed in the Atlantic and these back-to-back storms present significant challenges; diminishing the window for search and rescue, increasing the duration of flooding and power outages and exacerbating COVID-19 challenges. Sea level rise driven by climate change worsens storm surge risk during hurricanes and warmer oceans can fuel stronger storms.

This comes as this year's first seven months were the second hottest on record and in the Northern Hemisphere July was the hottest on record, beating the previous record set just last year. This is increasingly evident in the Arctic, where satellite imagery shows that the region's largest remaining ice shelf lost a 110 square km portion and where Bering Sea ice was at a record low during 2018 and 2019. This affects ecosystems and Indigenous communities and contributes to feedback loops of warming in the region when reflective ice is replaced by dark water. Meanwhile, in Antarctica two glaciers that are already contributing to around 5% of global sea level rise were recently found to be less stable than previously understood.

Global Ports Exposed to Floods, Sea Level Rise

Sea ports handle 80% of global goods, so disruptions have significant wide-reaching consequences. This recent Economist article leverages Four Twenty Seven's data to explore risk exposure of about 340 of the world's largest ports. The analysis found that 55% of global trade goes through ports that are highly exposed to at least one hazard, such as floods, sea level rise, storms and wildfires and that 8% of trade passes through ports highly exposed to at least three hazards. This points to a need for risk assessment and resilience investment at ports, which requires capacity-building for port managers and an increase in adaptation finance.
Four Twenty Seven at Moody's:
Integration in Research and Ratings

Moody's Launches Comprehensive ESG Solutions Group

This week Moody’s Corporation announced the formation of an Environmental, Social, and Governance (ESG) Solutions Group to serve the growing global demand for ESG insights. The group leverages Moody’s data and expertise across ESG, climate risk, and sustainable finance, and aligns with Moody's Investors Service and Moody's Analytics to deliver a comprehensive, integrated suite of ESG customer solutions.

The ESG Solutions Group includes Four Twenty Seven and Vigeo Eiris, a global pioneer in ESG assessments, data and tools, and sustainable finance. Together, Moody's and its affiliates develop tools and analytics that identify, quantify and report on the impact of ESG and climate-related risks and opportunities. ESG and climate risk considerations are already integrated into credit ratings and research offered by Moody’s Investors Service (see below), and will be integrated into a range of Moody’s Analytics risk management solutions, research, data and analytics platforms, including stress testing solutions and climate-adjusted credit risk analytics for corporates, sovereigns and real estate.

Moody's Investors Service Announces Inclusion of Four Twenty Seven's Climate Risk Data in US CMBS and CRE CLOs

Reflecting the growing materiality of climate events for real estate, Moody's Investors Service now considers climate risk data and analytics from Four Twenty Seven in its research and ratings process for US commercial mortgage-backed securities (CMBS) and commercial real estate collateralized loan obligations (CRE CLOs). Presale reports include physical climate risk tables for the properties backing the loans in CMBS and CRE CLO transactions, including their forward-looking risk to floods, heat stress, hurricanes & typhoons, sea level rise, water stress and wildfires. 

Moody’s: U.S. Nuclear Operators Exposed to Physical Climate Risks

Physical climate hazards affect the operations and costs of nuclear plants due to their water needs and reliance on critical equipment. In its report, Nuclear Operators Face Growing Climate Risk but Resiliency Investments Mitigate Impact, Moody’s Investors Service leverages Four Twenty Seven’s physical climate risk data to explore the exposure of nuclear power plants to climate hazards, including heat stress, water stress, flooding and hurricanes. The analysis found that nuclear plant operators face physical and economic risks due to extreme events driven by climate change, and operators and owners will have to consider these risks and explore increased resilience options, as they approach license expiration and renewal processes between 2030 and 2050.
Developments in Climate Risk
Regulation & Assessment

U.S. CFTC Releases Report on Climate Risk

Last week the U.S. Commodity Futures Trading Commission released a report highlighting the economic risks of climate change and emphasizing the need for the financial system to address these risks. The first such report to be issued by a U.S. government entity, it covers both physical and transition climate risks and calls for a nationwide price on carbon. However, this comes two weeks after the U.S. Securities and Exchange Commission released updated disclosure requirements that don't include climate change.

UK Releases Consultation on Mandating TCFD Disclosure

The UK's Department for Work and Pensions released a public consultation on a proposal to mandate climate risk disclosure. The policy would require pension funds of at least £5 billion to assess and disclosure their climate risks and opportunities under several scenarios by October 2021 and would also apply to funds of at least £1 billion in 2022. Respond by October 7th.
Meanwhile, yesterday, New Zealand announced that it would mandate TCFD disclosure on a comply or explain basis by 2023.

Charting a New Climate: UNEP FI TCFD Banking Pilot Phase II Report

Last week the UNEP Finance Initiative released a report outlining phase II of its pilot project working with global banks to understand their approaches to assessing physical climate risks and opportunities and the tools and data that could best support these processes. It discusses climate risk vulnerability by sector, includes an exploration between the connection between loan performance and climate risk exposure and reviews several data providers, including Four Twenty Seven and our ongoing collaborations with Moody's Analytics.
Moody's ESG Summit: Climate Scenarios

Join Us During Climate Week NYC for a Half Day on Climate Risk

Hear from industry leaders on the latest market developments in climate change and discover new approaches to leveraging climate data and financial indicators to understand how physical and transition risks translate into credit risks. The session will include keynote presentations by Nick Anderson of IASM, Jane Ambachtsheer of BNP Paribas Asset Management and Sean Kidney of the Climate Bonds Initiative. The latter session will feature experts from Moody's, Four Twenty Seven and Vigeo Eiris, discussing new approaches to modeling climate risk and its financial impacts.

This event is hosted by Moody's in partnership with the Climate Bonds Initiative during Climate Week New York City. The session is on September 24th beginning at 9:15am EST.
Register for Free

Moody's Analytics' Launches ESG Risk Assessment Courses

Moody's Analytics' upcoming courses on ESG risk assessment include introductions to climate, environmental and social risks and their connection to credit analysis and portfolio management. These virtual, instructor-led courses will include case studies and discussions on how to assess and manage ESG risks. Topics include ESG KPIs, the Sustainable Development Goals, CO2 scope, climate risk analysis, proxy voting, climate risk disclosure and upcoming regulation.

Choose from three upcoming sessions, with options for time zones in the U.S., Europe and the Asia-Pacific regions and review the full course outline.
Inside the Office at Four Twenty Seven

Director, Sales - Jackie Willis

Four Twenty Seven welcomes Jackie Willis as Director, Sales in New York. Jackie leads Four Twenty Seven’s business development and growth strategy in the eastern United States. Jackie has spent the majority of her career in analytical and portfolio management roles in corporate and municipal finance, in the securities and banking industries at institutions such as Prudential Capital Management, TIAA-CREF, TD and Wachovia (now Wells Fargo). Most recently, she served as a Solution Specialist covering the commercial and industrial (C&I) and commercial real estate (CRE) credit risk models for Moody’s Analytics.

Join the team! 

Find open positions on our Careers page and visit Vigeo Eiris' and Moody's Careers pages for more opportunities in climate change and ESG.
Upcoming Events

Join the team online at these upcoming events and check our Events page for updates, including links to events not yet available:

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Copyright © 2020 Four Twenty Seven, All rights reserved.
Four Twenty Seven sends a newsletter focused on bringing climate intelligence into economic and financial decision-making for investors, corporations and governments. Fill in the form below to join our mailing list. As data controller, we collect your email address with your consent in order to send you our newsletter. Four Twenty Seven will never share your mailing information with anyone and you may unsubscribe at any moment. Please read our Terms and Conditions.
 

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Panel Recording: Preparing for the Future of ESG

This panel on Preparing for the Future of ESG  features a discussion on interactions between ESG, the global pandemic and corporate strategy and is part of the Vinson & Elkins (V&E) ESG Symposium: Capital, Climate and Culture in the New World.

Speakers

  • Beth Lowery, Managing Director of TPG discusses ESG governance in the corporate sector.
  • Emilie Mazzacurati, Founder and CEO of Four Twenty Seven, offers insight into the increasing understanding of ESG and climate risks as materially relevant, underscored by regulatory developments, objective data and investor pressure.
  • Sarah Fortt, Counsel – Mergers & Acquisitions and Capital markets of V&E, speaks on metrics for measuring ESG through company behavior and disclosure.
  • Skye d’Almeida, Senior Vice President, Investor Coverage of Green Investment Group at Macquarie, discusses the financial success of ESG products due to long-term predictable revenue.
  • Susan Gray, Global Head of Sustainable Finance Business and Innovation of S&P Global Ratings, discusses company engagement with stakeholders and the increased granularity of investor focuses.
  • Moderator: Maggie Peloso, Partner –  Environmental & Natural Resources of V&E.

 

Moody’s Launches Comprehensive ESG Solutions Group; Appoints Global Head

Moody’s launches an ESG Solutions Group, offering data and analytics across ESG, climate risk and sustainable finance. Read the press release from Moody’s:

LONDON–(BUSINESS WIRE)– Moody’s Corporation (NYSE: MCO) announced today the formation of an Environmental, Social, and Governance (ESG) Solutions Group to serve the growing global demand for ESG insights. The group leverages Moody’s data and expertise across ESG, climate risk, and sustainable finance, and aligns with Moody’s Investors Service (MIS) and Moody’s Analytics (MA) to deliver a comprehensive, integrated suite of ESG customer solutions.

The ESG Solutions Group develops tools and analytics that identify, quantify, and report on the impact of ESG-related risks and opportunities. Moody’s ESG capabilities expanded following its investments in Vigeo Eiris (VE), a global pioneer in ESG assessments, data and tools, and sustainable finance, and Four Twenty Seven, a leader in climate risk analysis, in 2019. ESG and climate risk considerations are already integrated into credit ratings and research offered by Moody’s Investors Service, and will be integrated into a range of Moody’s Analytics risk management solutions, research, data and analytics platforms.

“Moody’s ESG Solutions Group brings together capabilities from across the company to help market participants advance strategic resilience, responsible capitalism, and the greening of the economy by identifying risks and opportunities and providing meaningful performance measurements and insights,” said Rob Fauber, Moody’s Chief Operating Officer.

The ESG Solutions Group is led by Andrea Blackman, who has over 30 years of experience in harnessing financial and technology innovation in leadership roles with banks, asset managers, and financial technology vendors. She previously managed Moody’s CreditView, growing it into the leading global research, data, and analytics platform for credit market professionals.

Including its affiliates, Moody’s ESG-related offerings now include:

  • 5,000+ company ESG assessments
  • Controversy screening for 7,900 companies
  • 1 million climate risk scores
  • 250+ sustainable bond and loan reviews
  • 70+ ESG specialty indices
  • Credit ratings that integrate ESG risk considerations
  • Risk management solutions integrating ESG and climate risk factors

VE and Four Twenty Seven will continue to offer market-leading stand-alone ESG and climate risk solutions given strong demand for their innovative products. VE recently launched enhanced Second Party Opinions for sustainability bonds that integrate aspects of the EU Taxonomy and Green Bond standard. Four Twenty Seven recently announced the addition of wildfire risk to their on-demand Real Asset Scoring Application for a property or facility’s projected exposure to climate change effects.

For more information visit Moody’s ESG & Climate Risk hub at www.moodys.com/esg

Webinar: Climate Change and Wildfires

How will climate change increase wildfire potential? This Four Twenty Seven webinar shares our methodology for assessing global wildfire potential and highlights key findings from our analysis.

Speakers

  • Natalie Ambrosio Preudhomme, Director, Communications, provides an introduction to the implications of wildfires for finance, business and government stakeholders.
  • Colin Gannon, Director, Research, explains Four Twenty Seven’s methodology for assessing wildfire potential.
  • Lindsay Ross, Director, Global Client Services, shares key findings from the analysis, highlighting regional hotspots and discussing actionable ways to leverage this data to inform investment in resilience.

For more information on Four Twenty Seven’s wildfire dataset read our report, Climate Change and Wildfires: Projecting Future Wildfire Potential.

Newsletter: How will climate change worsen wildfire exposure?

Four Twenty Seven's monthly newsletter highlights recent developments in climate risk and resilience. This month we share new data on wildfire potential, highlight the connection between racial justice and climate change and feature new reports on climate risk.

In Focus: Projecting Future Wildfire Potential

Four Twenty Seven Analysis - Days of High Wildfire Potential will Increase by Up to Three Months in Most Exposed Regions
 

Areas ranging from California and Australia to the Amazon, Spain and the Arctic have experienced unprecedented loss of life and damage from wildfires in the past several years. Climate change is already making wildfires more severe and Four Twenty Seven's latest analysis finds that it will lead to more days with high wildfire potential in areas already prone to wildfires, and create hotter and drier conditions that will expose entirely new areas. 

This analysis leverages Four Twenty Seven's new dataset, which provides the only known globally comparable assessment of future wildfire potential in a changing climate at a scale of approximately 25 kilometers by 25 kilometers. The data is built upon the two key factors of soil moisture deficit and wildfire fuel type and incorporates data from global climate models to provide a view of changing conditions by 2030-2040, capturing both absolute and relative change in frequency and severity. This new data is now available on-demand for our clients via Four Twenty Seven’s Physical Climate Risk Application for real assets.

Register for our webinar on August 20th at 8am PST / 11am ET / 16:00 BST to learn more about the methodology and findings.
Read the Report
Climate Change and Racial Justice

Exploring Environmental Justice and the Need for Equitable Adaptation

The relationship between race and climate change is too often ignored. The recent protests for racial justice and police reform call attention to the fact that racism is still deeply embedded in our institutions and public policies. In the United States, people of color are disproportionately affected by polluting industries and climate change, while at the same time often lacking the resources to prepare and being excluded from decision-making on adaptation investment.

As part of our commitment to help raise awareness of the nexus between racial justice and climate change, Four Twenty Seven published a two-part blog series on the nexus of racial justice and climate change. The first blog focuses on exposure, providing a brief overview of environmental injustice issues in the U.S., and shedding light on the disproportionate impacts of climate change on Black communities and people of color. One solution is to ensure that climate adaptation intentionally considers this disproportionate exposure, factoring racial equity into decision-making. The second blog on adaptation outlines the need to integrate equity into adaptation and highlights emerging best practices.

Read our analyses:

Webinar Recording

Last week Four Twenty Seven and Moody's hosted a webinar exploring these topics. Four Twenty Seven's Yoon Kim discussed disproportionate exposure of people of color to climate hazards, Moody's Investors Services' Ram Sri-Saravanapavaan presented on the implications of inequality on sovereign credit, Tulane's Jesse Keenan discussed climate justice in urban development and UC Irvine's Michael Méndez presented on racial equity in climate policy. Register here to watch the recording

Central Banks on Climate Risk

The Bank of England's Climate Risk Disclosure

Last month the Bank of England published its first TCFD-aligned climate risk disclosure, assessing the exposure of its own portfolios to physical and transition risks. The Bank underscores the importance of addressing climate change as a financial risk and states the importance of assessing and disclosing risks even as the best available resources continue to evolve. The risk assessment leverages Four Twenty Seven and Moody's Analytics analysis on physical risk exposure. Meanwhile, the Bank of England's Climate Financial Risk Forum published a guide for financial stakeholders to assess, manage and disclose climate risk.

Guide to Climate Scenario Analysis for Central Banks and Supervisors

The Network for Greening the Financial System released a four step approach for central banks and supervisors to implement scenario analysis for climate risk, accompanied by a detailed set of climate scenarios. The steps include identifying the scope of the assessment; identifying scenarios; assessing the best way to connect climate risk exposure to economic and financial impacts; and explaining the results and methodology.

Indebted to Nature - Exploring Biodiversity Risks for the Dutch Financial Sector

Last month the De Nederlandsche Bank (DNB) and PBL Netherlands Environmental Assessment Agency released this report outlining the ways in which biodiversity loss poses economic and financial risk and the role the financial sector plays in biodiversity loss. The report also assesses the Dutch financial sector's exposure to biodiversity risk leveraging Four Twenty Seven's database. The separate report, Methods for analyses in Indebted to nature, explains the full approach. 
Public Consultations on Climate Risk

EIOPA Discussion Paper on Methodological Principles of Insurance Stress Testing

The European Insurance and Occupational Pensions Authority's (EIOPA) recent discussion paper outlines an approach to climate risk stress testing for transition and physical risks, citing Four Twenty Seven's methodology. EIOPA has asked for feedback by October 2.

European Central Bank Consultation on Climate Risk Disclosure Guidance

The European Central Bank (ECB) published guidance asking banks to disclose their climate-related risks and integrate these risks into their risk management processes. Compliance will be expected when the guidelines are finalized at the end of the year. The ECB has solicited feedback through a public consultation open until September 25.
Four Twenty Seven Wins
WatersTechnology Asia Award

Four Twenty Seven Recognized as Best Alternative Data Provider

The WatersTechnology Asia Award 2020 for Best Alternative Data Provider recognizes Four Twenty Seven’s innovation, accuracy and high standard in curating and deploying data for financial stakeholders.
This regional award showcases vendors and end users with high quality solutions with global relevance that are also especially pertinent to Asia markets.This came as financial regulators across the Asia-Pacific region have increasingly contributed to the global call for increased measurement and disclosure of climate risks in investment portfolios, encouraging financial actors to step up. With an office in Tokyo and a partnership with Sydney based DB Funds Advisory, Four Twenty Seven is excited to bring our award-winning climate risk data to more financial stakeholders in these markets. 

Four Twenty Seven Recognized in Exeleon Magazine's Top Companies

Business and Tech Magazine Exeleon, includes Four Twenty Seven in its listing of the top 100 companies to watch in 2020. "While the past several years have seen an increase in awareness of the material risks of climate change, Four Twenty Seven was on the leading edge of analyzing many complex scientific datasets and translating them for financial and business stakeholders." Exeleon writes. "Emilie and her team publish deeply data-driven and location-specific analysis, based on the best available climate data and the specific need of financial stakeholders."
Four Twenty Seven Partners with Nova Group

Nova's Climate Resilience Assessment Leverages Four Twenty Seven's Physical Risk Data

Four Twenty Seven is pleased to announce a partnership with Nova Group, GBC, a leading environmental and engineering due diligence advisory firm. Four Twenty Seven's asset-level physical climate
risk data now informs Nova’s new Climate Resilience Assessment, providing resilience recommendations based on the risks and characteristics of the specific asset of interest.
Inside the Office at Four Twenty Seven

Associate Director, Research - Stephanie Auer

Four Twenty Seven welcomes Stephanie as Associate Director, Research. Stephanie develops and incorporates metrics of novel climate indices into Four Twenty Seven’s products and services. Stephanie’s background is in data science and conservation ecology. She has worked for NatureServe and the California Academy of Sciences in ecological forecasting, data visualization and mapping, with a focus on analysis and communication for climate change adaptation planning.

Join the team! Four Twenty Seven is Hiring

There are several opportunities to join Four Twenty Seven's dynamic team. See the open position below and visit our Careers page and Moody's Careers page for more information.
  • IAM Modeler with expertise in Integrated Assessment Models (IAMs) and in translating IAM outputs for a wide range of stakeholders
Upcoming Events

Join the team online at these upcoming events and check our Events page for updates:

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Copyright © 2020 Four Twenty Seven, All rights reserved.
Four Twenty Seven sends a newsletter focused on bringing climate intelligence into economic and financial decision-making for investors, corporations and governments. Fill in the form below to join our mailing list. As data controller, we collect your email address with your consent in order to send you our newsletter. Four Twenty Seven will never share your mailing information with anyone and you may unsubscribe at any moment. Please read our Terms and Conditions.
 

Our mailing address is:
Four Twenty Seven
2000 Hearst Ave
Ste 304
Berkeley, CA 94709

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Panel Recording: Electric Vehicles, Green Public Travel

This Responsible Investor Digifest panel features a discussion on the time frame for adoption of evolving electric vehicle technology, the improvements of green mass transit, how this affects carbon transition risk and the investment impacts and credit rating implications of the transport revolution.

Speakers

  • James Leaton, Vice President and Senior Credit Officer of Moody’s discusses the future of mobility and its cross-sector credit implications.
  • William Todts, Executive Director of Transport and Environment, highlights prominent issues to consider post-COVID-19 in the transport space.
  • Joy Williams, Senior Advisor of Mantle 314, shares investor and analyst perspectives on navigating resilience.
  • Moderator: Daniel Brooksbank, Head of Strategic Content, Responsible Investor