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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