Banks Taking a Closer Look at ESG Risks in Credit Underwriting
Jan 7, 2020
Banks are taking a closer look at environmental and social risks in deciding whether to lend money to certain corporate borrowers.
Sixty-seven percent of banks screen their loan portfolios for environmental, social and governance risks, according to a survey published Tuesday by Fitch Ratings. Read more>
The Changing Climate of Credit Risk Management
December 27, 2019
While credit portfolio managers generally recognize that physical climate risk needs to be accounted for, questions and misconceptions abound. The potential manifestations of climate change and their impacts on economic outcomes are only beginning to be understood, and it is likely that investments in resilience and risk reduction will lag understanding. Read more>
The ESG Data Files, Part Six: TCFD and the Challenge of Looking Forward
November 18, 2019
It has been two and a half years since the Financial Stability Board’s (FSB) Task Force on Climate-related Financial Disclosures (TCFD) released its recommendations designed to stimulate company disclosures about the impacts of climate change on their businesses.
The release of the report was a landmark moment in the evolution of environmental, social and governance (ESG) data because it added a new and more challenging dimension to reporting. Read more>
Illinois’s Risk to Bond Buyers Is Getting Hotter – Literally
September 24, 2019
Wall Street has a number of reasons to be concerned about the credit quality of Illinois, the lowest-rated U.S. state: mounting pension obligations, billions of dollars in unpaid bills and a shrinking population. Now investors can add climate change to that list.
Western Illinois and Missouri are two areas that are expected to experience the greatest rise in extreme temperatures by 2040, according to a report on Tuesday by Moody’s Investors Service. Rising temperatures threaten to curb agricultural production and labor productivity, increase the costs for infrastructure and heighten energy demand as residents struggle to cool their homes and businesses. Read more>
Private investment in the reconstruction of the Bahamas after Hurricane Dorian could set a precedent for storm recovery in the United States.
Resilience expert Alan Rubin, a principal with Blank Rome Government Relations in New York, discussed the matter in Washington recently with U.S. Rep. Eliot Engel, D-N.Y.; Engel’s chief of staff, Bill Weitz; Eric Jacobstein, senior policy advisor for the House Committee on Foreign Affairs; and representatives from the international development agency U.S. Agency for International Development, which sent a response team to the Bahamas. Read more>
The numbers add up to a bleak scenario: if the pace of global warming continues, sea levels in the Tampa Bay area could rise by as much as eight-and-a-half-feet by 2100, according to scientists’ worst-case projections.
Tampa Bay is at acute risk from climate change as its terrain is mostly at sea level, with nearly 700 miles of shoreline facing the bay or the Gulf of Mexico. A 2017 report from Climate Central, a research group, said St Petersburg and Tampa were among the 25 US cities most vulnerable to coastal flooding both then and also by 2050. Read more>
US realtors may soon be required by law to disclose a property’s flood risk and history to prospective buyers, a move which could put house prices on the slide – most notably in coastal regions vulnerable to sea level rise (SLR).
So far, property valuations in these regions have been buoyant despite the increasing intensity and frequency of extreme weather events. In Miami, for example, “king tides”, caused by specific alignments of the sun and moon, have made flooding a monthly occurrence in some areas even in periods of limited storm activity. Read more>
Retail executives are notorious for blaming their companies’ problems on the weather. But a cold spring that keeps people from buying new shorts and skirts at the mall is quite a different thing from an extreme weather event that disrupts a store, supply chain or entire business.
To take a severe case, consider women’s apparel retailer A’gaci. In the year before A’gaci filed for Chapter 11 the first time, the Caribbean and U.S. had been pummeled by a series of some of the most destructive hurricanes in recorded history. Read more>
L’agence de notation Moody’s renforce ses connaissances sur le risque climatique
August 12, 2019
Moody’s vient de racheter la startup américaine Four Twenty Seven. Spécialisée dans la collecte et l’analyse des données sur le risque climatique pesant sur les entités économiques, Four Twenty Seven apporte un savoir-faire supplémentaire à Moody’s pour affiner en partie ses notations de crédit, et pour développer son expertise dans l’évaluation extra-financière. Lire l’article>
Moody’s Corporation has purchased a controlling stake in a firm that measures the physical risks of climate change, the latest indication that global warming can threaten the creditworthiness of governments and companies around the world. Read more>
The acquisition of California-based Four Twenty Seven, Inc., by Moody’s Corporation could signify the beginning of a major shift in how markets price risks related to climate change. Up until now, these risks largely have been absent from investors’ models, but if Moody’s, a major rating agency, starts using Four Twenty Seven’s methods in assigning ratings, that might quickly change. Read more>
En 2000 ans, la terre n’a jamais eu aussi chaud. Et Moody’s veut en connaître l’impact sur l’économie. L’agence de notation a en effet acheté des parts majoritaires dans le cabinet d’analyse Four Twenty Seven , spécialiste du risque climatique, pour renforcer sa capacité à quantifier le risque climatique. Lire l’article>
Moody’s bought a controlling stake this week in Four Twenty Seven, a research firm that prices climate-change risk. It’s the latest indication that Wall Street is coming around to putting a price on climate change and its economic impact—albeit more slowly than many economists and investors have called for. Read more>
Hedge funds expect to invest more than half of their assets next year based on environmental, social, and governance factors, a large jump from 2018, according to a survey by BarclayHedge. Read more>
Credit rating agency Moody’s has snapped up a majority stake in climate risk data firm Four Twenty Seven, as the wave of consolidation in the environmental, social and governance (ESG) sector gathers pace. Read more>