Newsletter: Towards Adaptation Standards

Four Twenty Seven's monthly newsletter highlights recent developments in climate adaptation and resilience. This month, we release a new report to help corporations and investors understand local adaptive capacity, share initiatives to standardize adaptation and highlight resources on adaptation finance.

In Focus: Assessing Local Adaptive Capacity 

427 Report: Helping Corporations and Investors Understand
Local Adaptive Capacity 

Building resilient communities and financial systems requires an understanding of climate risk exposure, but also of how prepared communities are to manage that risk. From flooded or damaged public infrastructure hindering employee and customer commutes to competition for water resources threatening business operations and urban heat reducing public health, the impacts of climate change on a community will impact the businesses and real estate investors based in that community.

Our newest report describes Four Twenty Seven's framework for assessing adaptive capacity in a way that’s actionable for corporations seeking to understand the risk and resilience of their own facilities and for investors assessing risk in their portfolios or screening potential investments. We create location-specific analysis by focusing on three pillars: 1) awareness, 2) economic and financial characteristics, and 3) the quality of adaptation planning and implementation. This helps the private sector understand their assets' risks and provides an entry-point for collaboration on local resilience-building. 
Read the Report
Towards Adaptation Standards
While climate mitigation has traditionally been the focus of efforts to address climate change, the past few years have seen an increased recognition of adaptation as a critical element of confronting climate change. As efforts grow to understand, quantify and catalyze adaptation investment there is a growing need for standardization and metrics around resilience investments.

EU Technical Expert Group on Sustainable Finance  

The European Commission's Action Plan on financing sustainable growth lays out a two year timeline for implementation, with a goal to create a taxonomy for climate adaptation finance by the end of 2019. To accomplish this goal, the EU has launched a Technical Expert Group (TEG) on Sustainable Finance and is calling for expert feedback on what actions qualify as adaptation and mitigation.
This will contribute to the ongoing effort to identify investments that build resilience in specific industries. The TEG recently released its preliminary report outlining its current thinking and explaining where it is soliciting feedback. The report shows the current lack of consensus around adaptation metrics and the need to standardize resilience definitions.

Expert Group on Resilient Bond Standards

A parallel initiative by the Climate Bonds Initiative (CBI) is focused on strategically incorporating adaptation into green bond standards. While green bonds have tended to focus on mitigation to date CBI launched an Adaptation and Resilience Expert Group (AREG) in November, which will develop Adaptation and Resilience Principles for bonds.
These principles will be released for public consultation in June 2019 and will lay the foundation for the development of sector-specific adaptation and resilience criteria. Founder & CEO, Emilie Mazzacurati, and Strategic Advisor, Josh Sawislak, are members of AREG.
Science Suffers in Government Shutdown
Four Twenty Seven analysts Josh Turner and Colin Gannon attended the American Meteorological Society's annual meeting last week, where the absence of hundreds of federal scientists was sorely felt. Numerous sessions were cancelled or poorly attended, and information sharing was lost in both directions. 

Most Americans may not feel the shutdown's impacts on a daily basis, but there are long-lasting implications far beyond the lack of conference attendance. While only those employees responsible for "essential services" continue to work with limited pay, data collection for long-term climate studies will be hindered, research on wildfire impacts will be delayed and hurricane model improvements and emergency training aren't progressing as they should. Some federal data sites are not currently accessible and the dearth of economic monitoring means that key data used by investors and policy-makers, like agricultural production numbers, are no longer being reported. 

Despite these obstacles, the private sector is persevering in its efforts to understand and address climate impacts. IBM announced that it will release the world's first hourly-updating, highest-resolution global weather forecasting model later this year and McKinsey just added 121 weather-data variables to its agriculture analytics tool, refining crop yield predictions. This year also promises to see continued growth in publicly hosted data sets, satellite data, and machine learning techniques for climate projections.
Resources for Adaptation Finance

Plugging the Climate Adaptation Gap with High Resilience Benefit Investments

In this report S&P Global Ratings  highlights both the funding gap and the multifaceted benefits of resilience projects. It outlines both challenges and benefits of quantifying benefits of adaptation projects and the barriers to adaptation, providing a small case study on the economic benefits of adapting to sea level rise.  Lastly, the brief report emphasizes the need for private investment to support limited public funding.

Financing Climate Futures: Rethinking Infrastructure

This report outlines a vision for a realigned financial system, prepared for long-term climate risks and opportunities.  The OECD, World Bank and UN Environment explain the dire need to disclose climate-related financial information in infrastructure projects and to invest in low-emission, resilient infrastructure that is both prepared for a changing climate and able to catalyze economic growth. 

Money for Resilient Infrastructure

The ebook Money for Resilient Infrastructure: How to Finance America's Climate Changed Future, explains recent developments in the financial sector's understanding of climate-related risks and highlights the growing demand for resilient infrastructure. Joyce Coffee outlines infrastructure finance options, investment instruments and strategies for obtaining resilience financing. 
Emilie Mazzacurati Named Top 100 in Finance
The Top 100 Magazine includes Founder and CEO, Emilie Mazzacurati, in the 2018 Top 100 People in Finance. 

“I’m honored to be recognized by The Top 100 Magazine,” says Emilie.  “We’re pushing the boundaries of how the financial world thinks about climate change, and appreciate the recognition on how our work helps drive the conversation on climate risk.” The Top 100 Magazine writes that while climate data "may seem like a fairly novel niche within the financial sector, the demand for this data has grown exponentially over the past two years... [Four Twenty Seven's] analysis leverages best-in-class climate data at the most granular level, and scores assets based on their precise geographic location. This provides the financial industry with the most comprehensive overview of investment outcomes related to present and future climate changes."

Upcoming Events

Join the Four Twenty Seven team at these upcoming events:

  • January 23 – From Sciences Po to the Economic Risk of Climate Change, San Francisco, CA: Hear Founder & CEO, Emilie Mazzacurati, speak at this Sciences Po American Foundation event at 6:30pm. Use discount code 427 for a $10 ticket.
  • February 12 – Investing for Impact, New York, NY: Emilie Mazzacurati will present on adaptation as an impact investment opportunity at this annual convening hosted by The Economist.
  • March 20-22 – Climate Leadership Conference, Baltimore, MD: Emilie Mazzacurati will speak about the evolving landscape of climate risk disclosure.
  • April 10-12 – RI Asia Japan, Tokyo, Japan: Chief Development Officer, Frank Freitas, will present on climate analytics for investors and Emilie Mazzacurati will also join this convening.
  • April 13-16  – APA National Planning Conference, San Francisco, CA: Director of Advisory Services, Yoon Kim, and Director of Analytics, Nik Steinberg, will speak on a panel called, "Beyond Vulnerability: Innovative Adaptation Planning."
  • April 23-25 – National Adaptation Forum, Madison, WI: Editor, Natalie Ambrosio, will present on local adaptive capacity from a private sector perspective. 
  • April 29 - May 1  – Ceres Conference 2019, San Francisco, CA: The Four Twenty Seven team will join investors and corporations at this annual gathering.
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