Newsletter: Bank of England Publishes First Stress Test for Climate Risks

Four Twenty Seven's monthly newsletter highlights recent developments on climate risk and resilience. This month we feature developments in scenario analysis for physical risks, highlight the European Union's guidance on climate risk disclosure and share the latest on financial climate risk and the need for resilience.

In Focus: Scenario Analysis for Physical Risk

Bank of England Publishes First Climate Risk Stress Test

Yesterday the Bank of England released specifications for integrating climate risk scenarios into its insurance industry's biennial stress tests. This "exploratory" exercise is an enormous step towards catalyzing a growing understanding of possible impacts of transition and physical climate risks on financial assets.

The guidance lays out potential impacts by providing sector-specific percentages of potential loss under three scenarios by sector and by region. These quantitative financial impact assumptions are not a projection but a starting point for the insurance industry to explore potential impacts of climate change on their portfolios.

The Bank of England leveraged Four Twenty Seven's analytics on climate risk exposure in equity and real estate markets to inform its assumptions about which sectors will experience the largest impacts. We explain how data on risk exposure in equities can be leveraged for this type of analysis in our new blog series on scenario analysis.

The Bank of England also recently released a practitioner's guide for assessing the financial impacts of physical climate change, to help the insurance sector address climate risks.

Blog Series: Scenario Analysis for Physical Climate Risk

Our new blog series provides our reflections on how corporations and financial institutions can integrate physical climate risk into scenario analysis. Scenario analysis for physical risk is fundamentally different from transition risk. Corporations and investors increasingly recognize the need to integrate physical risk into scenario analysis but are looking for guidance and best practices on how to proceed.

Our first blog focuses on the foundations, demonstrating how characteristics of climate science affect how climate data can be used to inform scenario analysis. We argue that because physical risks over the next 10-20 years are largely independent from policy decisions and emission pathways, investors would be better served by scenario analysis that focuses on the inherent uncertainty of projected impacts, independent from assumptions on GHG emission scenarios. 

The next blog focuses on Equity Markets, with concrete examples of how available data can inform financial stakeholders ready to start putting scenario analysis into action. We look at data on climate risk exposure by sector to explore how climate risk analytics can inform early developments of stress test assumptions, as done by the Bank of England.  
Read the Blogs
EU Technical Expert Group
Releases Guidance
Yesterday the European Commission released its final guidance on integrating climate change into corporate disclosuresThis guidance applies to 6,000 companies, banks and insurers in Europe and maps to the TCFD recommendations. The guidance includes key recommendations from Advancing TCFD Guidance for Physical Risks and Opportunities, published by the European Bank for Reconstruction and Development (EBRD) and GCECA last year, for which Four Twenty Seven was a lead author. 
The EU also released the Technical Expert Group (TEG) report on a taxonomy for activities that contribute to climate adaptation and mitigation. The taxonomy aims to help investors and policymakers understand which economic activities contribute to the transition to a low-carbon economy, through both mitigation and resilience. It outlines qualitative screening criteria to identify adaptation of economic activities and adaptation by economic activities, providing activity-specific examples for a range of sectors. The proposed taxonomy is still under legislative review.
Second TCFD Status Report
While more firms are releasing TCFD disclosures, investors call for an increase in informative disclosure of the financial impact of climate risks. The Task Force on Climate-related Financial Disclosures (TCFD) released its second progress report earlier this month, emphasizing that the quality of risk disclosures must continue to improve as firms build their understanding and capacity to address climate risks. 91% of surveyed firms said they plan to at least partially implement the TCFD recommendations, but only 67% plan to complete implementation within the next three years. This progress must be accompanied by continued knowledge sharing and research on financial risk pathways for climate impacts, meaningful exposure data and best practices for reporting.

Even as TCFD reporting increases, quantitative assessment of physical risk exposure lags behind. Explore physical climate risk reporting by French firms in our analysis of physical risk in Article 173 reports and stay tuned for Four Twenty Seven's forthcoming analysis on physical risk disclosure in TCFD reports.
Investors Factor Climate Risk into Decisions
The past month has seen a flurry of news around the business risks of climate change and the financial sector response. CDP's annual climate change report estimates that 215 companies could incur around $1 trillion in climate-related costs if they don't prepare for these impacts. Companies expect these costs to begin accumulating in around five years. While some are not yet acting, others are, such as Japanese Hitachi Ltd preparing for increased rainfall in Southeast Asia and Brazilian Bank, Banco Santander, considering how increased water stress may damage borrowers' ability to repay loans. 

Alison Martin of Zurich Insurance Group told a meeting of CFOs that physical risks such as drought, extreme heat and flooding will be "incredibly meaningful." She emphasizes that the first step in integrating climate change into planning is for a company to understand its risk exposure. Meanwhile investors say they are increasingly factoring physical climate risk into their decision-making to minimize their risk and increase returns. Four Twenty Seven's on-demand scoring of real assets and analysis of asset-level risk in equity portfolios enables both corporations and investors to understand their exposure and strategically address physical climate risks.
Devastating Impacts Call for Preparation

Catastrophic Midwest Flooding Has Rippling Impacts

At the end of May only 58% and 29% of the U.S. corn and soy crops had been planted respectively. After persistent flooding beginning in Mid-March, inundated fields delayed planting. This means that some farmers will miss the planting window, which closes in June due to the heat and dryness of later summer months.
Those crops that do get planted will have to overcome soggy soil conditions and will remain at the peril of the summer's weather. It's already clear that this will be a below average crop yield, which translates into  more expensive corn in cattle feed and higher prices in grocery stores.

The Climate Connection

While the Mississippi River continues to swell, extreme precipitation has recently hit Houston and the Southeast with damaging floods. The past 12 months have been the wettest on record for the U.S. The national average of 37.7 inches since last June is 7.7 inches above average. 
A weak El Niño likely contributed to increased rainfall, but climate change also plays a role as warmer air holds more water. This month also saw record high temperatures in the western U.S., caused by a bulging jet stream making warm air flow south to north. While this does happen naturally, it may be happening more often due to warming ocean waters. This jet stream activity also contributes to other extreme events like the Midwest flooding.

The Need to Rethink Preparedness

From floods and heat waves to fires and hurricanes, federal recovery efforts for extreme events have cost almost half a trillion dollars since 2005. As disasters become more common and costs increase, there is an urgent need to invest in resilience proactively rather than spending billions on recovery. Last fall's Disaster Recovery Reform Act made an
important step by allowing FEMA to use a small portion of its disaster relief funding for risk mitigation ahead of disasters. However, this is the start of what must be a systemic shift in addressing extreme events. “If we don’t want to spend hundreds of billions of dollars on recovering for disaster, we need to spend tens of billions [on resilience],” Four Twenty Seven Strategic Advisor, Josh Sawislak, told Bloomberg.

"There is a silver lining to our climate challenges — economic growth. Americans are very good at innovating and building and we can leverage our need to be more resilient by growing the economy with good resilient and sustainable jobs," Sawislak wrote.
Upcoming Events

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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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Newsletter: France’s Central Bank Publishes First TCFD Report

Four Twenty Seven's monthly newsletter highlights recent developments on climate risk and resilience. This month we highlight the French Central Bank's climate risk assessment, discuss climate risk in real estate and share progress updates on the EU action plan. 

In Focus: Banque de France Publishes First Art. 173 Report
Banque de France, France's central bank, released a comprehensive analysis of climate risk in its portfolio on March 12. The assessment aligns with both Article 173 and the Task Force on Climate-related Financial Disclosures' recommendations. It includes an analysis of physical climate risk exposure in Banque de France's equity, debt and sovereign bond portfolios, provided by Four Twenty Seven.

This report is part of a broader effort by a number of central banks to lead by example and demonstrate how financial institutions need to assess their portfolios' exposure to climate risk. Banque de France is a founding member and provides the Secretariat for the central bank and supervisor Network for Greening the Financial System (NGFS), which focuses on strengthening the global response required to meet the goals of the Paris agreement and manage climate-related risks. 
Read the Report
Real Estate Investors Tackle Climate Risk

Climate Risk and Real Estate Investment Decision-Making

This report explores the evolving understanding of climate risk in real estate, sharing current best practices for measuring and managing risk. The Urban Land Institute and Heitman, a real estate investment management firm, surveyed over 25 investors and investment managers globally on their efforts to integrate climate risk into their investment decisions. Their strategies include mapping physical risk for current portfolios, integrating climate risk into due diligence efforts, exploring ways to mitigate risk and engaging with policy makers on resilience-building efforts.

The report also 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 in REITs. The Washington Post recently cited the report, emphasizing the regional initiatives focused on building resilience to climate impacts and their implications for investors, while a Forbes article, discusses the findings in terms of the economic impacts.

Further Reading

Continued Progress on the EU Action Plan

Respond to the European Commission's Consultation on Disclosure 

The European Commission has released a consultation soliciting expert feedback on their draft supplement integrating climate change into the Non-Financial Reporting Directive (NFRD), based on the Technical Expert Group (TEG) on Sustainable Finance's final recommendations. This is an important step towards increasing the transparency and resilience of the financial system by creating legislation that includes physical climate risk disclosure by companies and investors. The deadline for feedback is March 20

Respond to the TEG Preliminary Green Bond Standard Recommendations

In another of its workstreams the TEG is helping the EC create an EU green bond standard. Earlier this month the TEG released its interim report, explaining the purpose of the proposed green bond standard and its suggested content. The TEG is inviting feedback which will be considered in the development of its final recommendations scheduled to be presented to the EC this June. The deadline for feedback is April 3. 
Four Twenty Seven in the News

Business and the Effects of Global Warming - The Economist

Data limitations, potential first-mover disadvantage, and complicated risk pathways all influence how companies disclose their climate risks and invest in resilience. The Economist covers challenges companies face when addressing climate risk, their wide-ranging reactions and developing solutions, citing Four Twenty Seven.


Facing Up to Climate Change - The Bond Buyer Podcast

Do bond ratings reflect governments’ and businesses’ exposure to physical climate change?  Founder & CEO, Emilie Mazzacurati, joins the Bond Buyer’s Chip Barnett to discuss physical climate risk for investors, businesses and governments. Emilie describes the financial sector’s growing awareness of material climate risk in their bond and equity portfolios and shares efforts being taken to understand and address these risks. 

Climate Change Business Journal Awards

The Climate Change Business Journal (CCBJ) released its 10th annual CCBJ Business Achievement Awards, recognizing outstanding business performance in the climate change industry. CCBJ acknowledged Four Twenty Seven’s release of the first global dataset on climate risk in real estate, developed with GeoPhy, and acknowledged the California Heat Assessment Tool. The tool was collaboratively developed as part of California's Fourth Climate Change Assessment, to help local health practitioners plan for the impacts of changing heat waves on local populations.
Upcoming Events

Join the Four Twenty Seven team at these upcoming events:

  • March 20-22 – Climate Leadership Conference, Baltimore, MD: Director of Advisory Services, Yoon Kim, will speak about the evolving landscape of climate risk disclosure.
  • March 20 – CCBJ 2018 Business Achievement Awards Ceremony, San Diego, CA: Senior Data Analyst, Josh Turner, will join this gathering to receive awards on Four Twenty Seven's behalf. 
  • March 21-22 – San Giorgio Group, Venice, Italy: Founder & CEO, Emilie Mazzacurati, will chair a panel on adaptation and resilience and will speak during a breakfast panel on adaptation finance during this gathering of climate finance experts.
  • March 22 – ICARP Technical Advisory Council Meeting, Sacramento, CA: Yoon Kim will join this quarterly meeting to present on private sector perspectives on assessing physical climate risks. 
  • April 2-3 – Climate City Expo: Business, Asheville, NC: Senior Analyst, Lindsay Ross, will join this gathering focused on innovation in climate resilience.
  • April 10-12 – RI Asia Japan, Tokyo, Japan: Hear Emilie Mazzacurati present on scenario analysis for physical climate risk and meet with Chief Development Officer, Frank Freitas, at Four Twenty Seven's booth.
  • April 8 - 19 – Japan and Australia: Meet with Emilie Mazzacurati and Frank Freitas while they're in Japan and Australia. 
  • 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."
  • April 23-25 – National Adaptation Forum, Madison, WI: Yoon Kim will speak about integrating public health into climate adaptation and 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.
  • June 11 - 12 – RI Europe, London, UK: Hear Emilie Mazzacurati present on scenario analysis for physical climate risk 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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Newsletter: PG&E Bankruptcy Sparks Investor Concern

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

In Focus: Climate Risk in the S&P 500

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

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

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

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

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

EU Technical Expert Group Report on Climate-related Disclosures

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

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

Dutch Central Bank Assesses Water Risk in the Financial Sector

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

Building on the Base: TCFD Disclosure in Asia

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

On Again: France Enters Third Year of Mandatory Disclosures

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

Join the Four Twenty Seven team at these upcoming events:

  • March 20-22 – Climate Leadership Conference, Baltimore, MD: Emilie Mazzacurati will speak about the evolving landscape of climate risk disclosure.
  • April 10-12 – RI Asia Japan, Tokyo, Japan: Hear Chief Development Officer, Frank Freitas, present on climate analytics for investors and meet with Emilie Mazzacurati at Four Twenty Seven's booth.
  • April 13-16  – APA National Planning Conference, San Francisco, CA: Director of Advisory Services, Yoon Kim, and Director of Analytics, Nik Steinberg, will speak on a panel called, "Beyond Vulnerability: Innovative Adaptation Planning."
  • April 23-25 – National Adaptation Forum, Madison, WI: Editor, Natalie Ambrosio, will present on local adaptive capacity from a private sector perspective and Yoon Kim will also join the convening.
  • April 29 - May 1  – Ceres Conference 2019, San Francisco, CA: The Four Twenty Seven team will join investors and corporations at this annual gathering.
  • June 11 - 12 – RI Europe, London, UK: Hear Emilie Mazzacurati present on climate risk in financial markets and meet with Director, Europe, Nathalie Borgeaud, at Four Twenty Seven's booth.
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Copyright © 2019 Four Twenty Seven, All rights reserved.
Four Twenty Seven sends a newsletter focused on bringing climate intelligence into economic and financial decision-making for investors, corporations and governments. Fill in the form below to join our mailing list. As data controller, we collect your email address with your consent in order to send you our newsletter. Four Twenty Seven will never share your mailing information with anyone and you may unsubscribe at any moment. Please read our Terms and Conditions.
 

Our mailing address is:
Four Twenty Seven
2000 Hearst Ave
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Newsletter: A Dire Warning

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

In Focus: Science Calls for Urgent Action

Recent Scientific Reports Send Dire Warning on Rapid Climate Change

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

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

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

Further Reading

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

Award Reflects Growing Interest of Financial Markets in Climate Data

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

The award from Risk Magazine is a clear signal that financial markets are starting to take climate risk seriously. Investors who wish to develop a fully-informed view of their portfolios need forward-looking data on the impacts of climate change on corporations and public issuers and they're increasingly eager for this data. A judge noted that Four Twenty Seven's “Deep datasets and sophisticated analytics, [are] setting a high bar in what will become of increasing concern to investors.” 

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

Navigating Climate Scenario Analysis

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

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

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

Experts on Climate Change

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

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


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

Join the Four Twenty Seven team at these upcoming events:

  • January 6-10 – 99th AMS Annual Meeting, Phoenix, AZ: Senior Data Analyst, Josh Turner, will present a poster on the California Heat Assessment Tool and Senior Data Analyst, Colin Gannon, will also join this convening of meteorologists and climate scientists.
  • January 7-10 NCSE 2019 Annual Conference, Washington, DC: Director of Advisory Services, Yoon Kim, and Strategic Advisor, Josh Sawislak, will facilitate sessions on private sector roles in building community resilience and on climate-ready infrastructure, respectively.
  • February 12 – Investing for Impact, New York, NY: Hear Founder & CEO, Emilie Mazzacurati, present on adaptation as an impact investment opportunity at this annual convening hosted by The Economist.
  • March 20-22 – Climate Leadership Conference, Baltimore, MD: Emilie Mazzacurati will speak about the evolving landscape of climate risk disclosure.
  • April 10-12 – RI Asia Japan, Tokyo, Japan: Chief Development Officer, Frank Freitas, will present on climate analytics for investors.  
  • April 13-16  – APA National Planning Conference, San Francisco, CA: Yoon Kim and Director of Analytics, Nik Steinberg, will speak on a panel called, "Beyond Vulnerability: Innovative Adaptation Planning."
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Copyright © 2018 Four Twenty Seven, All rights reserved.
Four Twenty Seven sends a newsletter focused on bringing climate intelligence into economic and financial decision-making for investors, corporations and governments. Fill in the form below to join our mailing list. As data controller, we collect your email address with your consent in order to send you our newsletter. Four Twenty Seven will never share your mailing information with anyone and you may unsubscribe at any moment. Please read our Terms and Conditions.
 

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

Four Twenty Seven Received ISAR Honours

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

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

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

———————-

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

PRI Webinar: Measuring and Managing Physical Climate Risk

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

Speakers

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

Webinar: Emerging Metrics for Physical Climate Risks Disclosures

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

Speakers

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

Newsletter: How to disclose physical climate risks & opportunities

 

 

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

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

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


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

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

Read the Report

Advancing TCFD Guidance on Physical Climate Risk and Opportunities

A practical guide to climate risk and opportunities disclosures.


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

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

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

Read the Report

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

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

Agenda:

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

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

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

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

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

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

Register Here

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

Register Here

UN PRI Webinar: Measuring and Managing Physical Climate Risk

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

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

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

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

Register Here

Upcoming Events

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

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

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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.Our mailing address is:
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Engaging with Corporates to Build Adaptive Capacity

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

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

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

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

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

Key Takeaways

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

Download the report.

Download the press release.

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

 

 

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

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

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


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

Read the Report

Advancing TCFD Guidance on Physical Climate Risk and Opportunities

EBRD and GCECA Conference on May 31

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

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

TCFD Knowledge Hub

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

Helping Banks Build Climate Resilience

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

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

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

Wed, May 23, 2018 11:00AM – 12PM PT 

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

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

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

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

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

Register Here

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

Register Here

The Third California Adaptation Forum

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

Upcoming Events

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

  • May 23: Four Twenty Seven Webinar Building City-level Climate Resilience, 11am-12pm PT: This webinar will discuss city level physical climate risks and opportunities to access climate adaptation and resilience financing. Register here.
  • May 23: Capital Region Climate Readiness Collaborative Quarterly Meeting, Sacramento, CA: Advisory Services Manager, Kendall Starkman, will join this quarterly meeting focused on the drivers of poor air quality in the Capital Region.
  • May 31: Advancing TCFD Guidance on Physical Climate Risk and Opportunities, London, UK: Four Twenty Seven is a strategic partner for this event hosted by EBRD and GCECA to discuss emerging guidance on metrics for physical climate risk disclosures and scenario analysis and Emilie Mazzacurati will moderate a panel presenting findings on physical risk metrics.
  • June 5-6: Responsible Investors Europe, London, UK: Hear Emilie Mazzacurati speak on a panel on corporate engagement and also meet with Chief Development Officer, Frank Freitas, and Senior Risk Analyst, Léonie Chatain, to discuss ratings and engagement on physical climate risk in equities.
  • June 7-9: 7th Sustainable Finance Forum, Waddesdon, UK: COO Colin Shaw will speak on a panel called “Supply chain transparency and network analysis” at this forum hosted by the Sustainable Finance Programme at the University of Oxford.
  • June 12: Four Twenty Seven Webinar: Metrics for Physical Climate Risks Disclosure, 8am PT and 6pm PT: This webinar will cover TCFD reporting, emerging metrics and best practice for physical climate risks and opportunities disclosures.
  • June 12-14: VERGE Hawaii, Honolulu, HI: Kendall Starkman, will speak about Four Twenty Seven’s heat assessment work at this convening of corporate, government and NGO stakeholders committed to building resilient cities and economies.
  • June 18-21: Adaptation Futures 2018, Cape Town, South Africa: Director of Advisory Services, Yoon Kim, will facilitate a session exploring integrating climate risks into infrastructure investment decisions.
  • June 26: GRESB’s Sustainable Real Assets Conference, Sydney, Australia: Meet with  Frank Freitas at GRESB’s annual conference on resilient infrastructure investments.
  • August 28-29: 3rd California Adaptation Forum, Sacramento, CA: Save the date for this opportunity to join over 600 climate leaders in workshops, sessions and networking around adaptation action in California.
  • September 12-14: PRI in Person, San Francisco, CA: Join the Four Twenty Seven team at this annual convening of responsible investment industry leaders.
  • September 12-14: Global Climate Action Summit, San Francisco, CA: Join the Four Twenty Seven team at this convening of global climate adaptation experts meant to propel action around the Paris Agreement.

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Copyright © 2017 Four Twenty Seven, All rights reserved.
Four Twenty Seven sends a newsletter focused on bringing climate intelligence into economic and financial decision-making for Fortune 500 companies, investors, and government institutions.Our mailing address is:
Four Twenty Seven
2000 Hearst Ave
Ste 304
Berkeley, CA 94709Add us to your address bookWant to change how you receive these emails?
You can update your preferences or unsubscribe from this list

 

 

 

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