Category: Consumer Products

Newsletter: How will climate affect Europe’s real estate & U.S. retail?

Posted on by Natalie Ambrosio

Four Twenty Seven's monthly newsletter highlights recent developments on climate risk and resilience. This month we feature analysis on climate risk in European real estate, Moody's research on credit quality and heat stress and the first climate resilience bond.
In Focus: Real Estate Climate Risk in Europe

Four Twenty Seven Analysis - Real Estate Climate Risks: How Will Europe be Impacted?
From this summer's record-breaking heat waves to storm-surge induced flooding, Europe is increasingly experiencing the impacts of climate change. Extreme events and chronic stresses have substantial impacts on real estate, by damaging individual buildings, decreasing their value and potentially leading to unusable assets. These asset-level impacts also have wider market implications.

Our latest analysis assesses the exposure of retail sites and offices across Europe to floods, sea level rise and heat stress. We find that 19% of assessed retail spaces and 16% of offices in Europe are exposed to floods and/or sea level rise, with floods presenting the highest risk for both types of asset. The analysis identifies the cities with the largest percent of facilities exposed to floods and sea level rise, and discusses the implications this exposure has for business continuity and real estate markets across the continent. 
Read the Analysis
Credit Quality in U.S. Governments Exposed to Heat Stress

Moody's Investors Service Analysis - Growing Exposure to Heat Stress Mitigated by Economic and Fiscal Strengths
Moody's new analysis overlays Four Twenty Seven's data on exposure to heat stress in U.S. governments with information on outstanding debt and credit quality, finding that 21% of outstanding debt they rate is exposed to high or very high heat stress. This exposure is concentrated in the central U.S. and Florida. The Southeast has the most debt exposed to heat stress, but this debt tends to be from larger, well-resources governments with diverse economies, which improves governments' resilience to extreme events. Bloomberg covers the report, emphasizing the potential implications of heat stress for Midwest bond issuers. Register for free to read the analysis:
Read the Report
New Principles Support Integration of Resilience into Bond Markets

CBI Releases Climate Resilience Principles 
Last Week the Climate Bond Initiative released Climate Resilience Principles, integrating forward-looking climate risk assessment and resilience considerations into bond markets. The guidance document is meant to inform investors', governments' and banks' reviews of how projects and assets contribute to a climate-resilient economy. The principles will be integrated into the Climate Bonds Certification of green bonds, signaling a valuable step toward the consistent use of resilience standards for debt projects. Four Twenty Seven is proud to have contributed to the Adaptation and Resilience Expert Group that developed the principles. 

EBRD Issues First Climate Resilience Bond
The European Bank for Reconstruction and Development (EBRD) issued the first bond to solely finance climate resilience projects. This is the first bond to fulfill the requirements of the new Climate Resilience Principles. Craig Davies, head of climate resilience investments at the EBRD, told Environmental Finance "The climate resiliency principles that the CBI has developed are a really important landmark because they very clearly set out eligibility criteria, and some very simple but clear and robust methodologies for defining a climate-resilient investment." The EBRD's four year bond raised $700 million to finance "climate-resilient infrastructure, business and commercial operations, or agricultural and ecological systems."

The EBRD also released a consultation draft of a Framework for Climate Resilience Metrics in Financing Operations this week. The report, published jointly with other multilateral development banks and the International Development Finance Club, outlines a vocabulary to facilitate consistent discussion and measurement of resilience investment.
Global Commission on Adaptation Launches Year of Action
The Global Commission on Adaptation presented its flagship report, Adapt Now: A Global Call for Leadership on Climate Resilience this week at the United Nations Climate Summit. This report emphasizes the return on investment of climate adaptation, noting that "investing $1.8 trillion globally in five areas from 2020 to 2030 could generate $7.1 trillion in total net benefits." It focuses on early warning systems, climate-resilient infrastructure, improving dryland agriculture, mangrove protection and increasing the resilience of water resources. This kicks off the Commission's Year of Action, during which it will advance recommendations, accelerate adaptation, promote more sustainable economic development and collate findings to present at the Climate Adaptation Summit in October 2020.
The Commission's report was informed by a paper called Driving Finance Today for the Climate Resilient Society Tomorrow by the UNEP Finance Initiative and Climate Finance Advisors. It outlines financial barriers to the acceleration of adaptation investment and recommends six actions to unlock adaptation finance. These actions include accelerating climate-relevant policies, implementing climate risk management, developing adaptation metrics, building financial sector capacity, highlighting investment opportunities and leveraging public institutions to accelerate adaptation investment. 
Retailers Prepare for Physical Climate Risk
Women's apparel store, A'gaci, filed for bankruptcy in January 2018 after most of its stores were hit by hurricanes in Texas, Florida and Puerto Rico. Hurricanes can affect retail operations by causing building damage, merchandise loss and supply chain disruptions, and Hurricane Irma caused an estimated $2.8 billion loss for the sector. Retail Dive explores the implications of climate change for the retail sector at large, using Four Twenty Seven's data on retail site exposure. With over 17,000 retail facilities exposed to floods in the U.S., some businesses are beginning to prepare, reorganizing their distribution patterns and supply chains. Some retail stores, such as Home Depot, can also see increases in demand after extreme events, and will particularly stand to benefit if their facilities are resilient to climate hazards and can accommodate the associated surge in business. 

New research by a Federal Reserve Board Economist, finds that weather variability impacts retail sales. On average, sales tend to increase with temperature and decrease with rain and snowfall. Overall there is not a clear shift in shopping habits from outdoor stores to indoor venues during extreme weather, but these patterns do show regional variation, suggesting that the impacts of extreme weather events vary by region. The impact of extreme events on sales will have an impact on retail employees and local economies depending on these companies. Businesses can leverage this research, alongside data on climate risk exposure, to plan for these shifts in consumer behavior. 
Inside the Office at Four Twenty Seven

Meet Operations Coordinator, Naoko Neishi 

Four Twenty Seve welcomes Naoko, who supports senior management and works with the Operations Manager to achieve operational excellence. Naoko has over 16 years of experience as a sales assistant and office manager in the United States and Japan, working in the financial and engineering industries.
Upcoming Events

Find Four Twenty Seven at Climate Week NYC:

Join the Four Twenty Seven team at these events:
Twitter
Twitter
LinkedIn
LinkedIn
YouTube
YouTube
Facebook
Facebook
Website
Website
Email
Email
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
Ste 304
Berkeley, CA 94709








Time and Tides – Flooding in Japan

Posted on by Natalie Ambrosio

July 15, 2018 – 427 ANALYSIS: Record-setting rains in Japan led to floods and landslides that disrupted business operations of automobile manufacturers, electronic companies and others. Understanding the ownership and operations of facilities located in the damaged areas provides insight into what companies and industries may exhibit downturns in performance over the near term and be vulnerable to similar storms in the future.

Japan was the inundated by over 70 inches of rain in early July, an event that resulted in significant loss of life and business disruptions. The clouds have since receded, leaving economic damage with long-term implications yet to be understood. However, estimates expect industry losses to be in the billions USD. Destruction was centered in Okayama and Hiroshima, driven by flooding and landslides.

Typhoons Prapiroon and Maria contributed to this rainfall and climate scientists expect a warmer climate to increase the severity of these storms. Japan has fewer preparations in place for floods than it does for other extreme events, and understanding the various manifestations of risk caused by extreme rainfall is essential to mitigating damage in the future.

Much of Okayama sits immediately below mountains, which makes it particularly exposed to devastating landslides following significant rainfall events. Bursting pipes and power outages led over 250,000 homes in the Okayama and Hiroshima Prefectures to go without water for several days after the floods. Landslides destroyed homes and exacerbated infrastructure damage caused by flooding.

Many business operations were severely impacted by these events as well, and some facilities remain closed.  Companies such as Panasonic experienced physical damage due to flooded facilities, and others were impacted by damaged infrastructure and communities, impacting their supply chains and workforce.

Okayama and Hiroshima are centers of economic activity for a number of key sectors in Japan, hosting production facilities for auto manufacturing, consumer electronics, retail trade and others. The figure below highlights the concentration of facilities of companies in the auto manufacturing industry by the sector of their operations. Companies that rely heavily on manufacturing operations are particularly vulnerable to flooding due in part to their utilization of expensive equipment that can easily incur water damage.

The heavy rainfalls showed no favorites in their disruption of manufacturing facilities across industries. For example, Mitsubishi and Mazda halted operations at some factories during the storms, due in part to supply chain disruptions. Many companies were also forced to pause operations because employees couldn’t get to work. While Mazda’s headquarters in Hiroshima Prefecture and a production facility in Yamaguchi Prefecture weren’t damaged themselves, they remained closed after the storms until employees could return to work safely. Likewise IHI Corp. closed its No. 2 Kure factory in Hiroshima  because of water shortages and employees’ commute challenges.

The extent of   long-term economic impacts that these companies will bear in the aftermath of last week’s storms is not yet known, but merits ongoing examination as the region recovers. Understanding the location of a corporation’s facilities and their exposure to extreme weather events is a key starting point for gauging exposure, and therefore can be instrumental in understanding company’s future performance.

Four Twenty Seven’s extensive facility level database can help investors proactively identify their portfolio companies’ exposures both to chronic climate effects and to individual extreme weather events such as the extreme rainfall that beset Okayama and Hiroshima. This deeper understanding can drive better risk-return tradeoffs, and importantly, shareholder engagement strategies that foster investments in resilience.

Responding to Economic Climate Risk in Australia

Posted on by Natalie Ambrosio

June 25, 2018 – 427 REPORT. Regulatory pressure and financial damage are necessitating an increase in physical climate risk disclosure in Australia. In exercising their own due diligence and assessing the exposure to physical climate risks in their portfolios, investors arm themselves with valuable information on corporate risk exposure which they can leverage to engage with companies around resilience. This report explores the connection between climate hazards and financial risks and shares examples of corporate adaptation and investor engagement to build resilience.

The global tide of interest in the Task Force on Climate-related Financial Disclosures (TCFD) has hit the shores of Australian financial markets, steered by regulators concerned about the systemic risk climate change poses to the economy. In 2017 Australian Prudential Regulation Authority’s Geoff Summerhayes was the first Australian regulator to formally endorse the TCFD. “Some climate risks are distinctly ‘financial’ in nature. Many of these risks are foreseeable, material and actionable now,” he said. This sentiment was echoed by John Price of the Australian Securities and Investments Commission in 2018 and reflects growing regulatory concern over climate risk disclosure internationally, as shown by Article 173 of France’s Law on Energy Transition and Green Growth and the 2018 European Commission Action Plan.

This Four Twenty Seven Report, Responding to Economic Climate Risk in Australia, explores the drivers of financial risk in Australia and discusses approaches to addressing this risk. The nation’s dominant industries are particularly threatened by the prevalent climate hazards. For investors, understanding a company’s risk to climate change is an essential first step to mitigating portfolio risk, but must be followed by corporate engagement to build resilience. Institutional investors are increasingly leveraging shareholder resolutions and direct engagement to prompt companies to disclose their climate risks and adapt.

Key Findings

  • Australia’s “Angry Summer” of extreme weather in 2013 cost the economy $8 billion and was followed by another summer of extremes in 2016-2017.
  • Construction, mining and manufacturing constitute almost 20 percent of Australia’s economy and are highly vulnerable to heat stress and water stress, which threaten large swaths of the nation.
  • Boral Limited and Rio Tinto are both Materials companies exposed to water and heat stress in their operations, but they have different risk scores stemming from differing vulnerabilities in their markets and supply chains.
  • Engagement on climate is relatively new for Australian shareholders, but is gaining momentum, with institutional asset managers voting on several climate risk disclosure resolutions in 2018.
  • Investors can address physical climate risk by reviewing their asset allocations, disclosing their own risks, investing in new opportunities and engaging with corporations.

Download the report.

Webinar: Emerging Metrics for Physical Climate Risks Disclosures

Posted on by Natalie Ambrosio

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

Posted on by Natalie Ambrosio

 

 

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 26: GRESB 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.

Twitter
Twitter

LinkedIn
LinkedIn

YouTube
YouTube

Facebook
Facebook

Website
Website

Email
Email

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:
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

 

 

 

This email was sent to

 

 

EBRD to Host Physical Climate Risk Conference on 31 May

Posted on by Natalie Ambrosio

The European Bank for Reconstruction and Development (EBRD) and the Global Centre of Excellence on Climate Adaptation (GCECA) have announced details of their conference, “Advancing TCFD guidance on physical climate risk & opportunities.”  A culmination of their initiative focused on building climate resilience in the financial sector, the conference will share findings on physical risk and resilience metrics from three expert working groups. Read the press release below, originally published on EBRD’s website:

—————————————-

Findings of industry working groups will be published ahead of the event “Advancing TCFD guidance on physical climate risk and opportunities”

  • Conference on 31 May to discuss physical climate risk and opportunity disclosure in climate-related financial disclosure reporting. Industry-led working groups to publish findings.
  • Event will advance thinking on how to develop physical climate risk metrics in line with Task Force on Climate-related Financial Disclosures (TCFD) guidance.
  • Conference co-organised by European Bank for Reconstruction and Development (EBRD) and the Global Centre of Excellence on Climate Adaptation (GCECA).

The EBRD and GCECA are hosting an event “Advancing TCFD guidance on physical climate risk and opportunities”, which will be held on 31 May 2018 at the EBRD’s headquarters in London.

Findings about physical climate risk and opportunity disclosure by industry-led working groups, which have been meeting at the EBRD’s headquarters since 2017, will be released at the conference.

This event will build on the recommendations of the TCFD, headed by Mark Carney and Michael Bloomberg. These recommendations highlight a growing concern over the effects of climate change on the economy and financial markets, and the need for investors to be able to assess climate-related risks.

At the conference, senior representatives from the financial, business and regulatory communities will discuss the development of metrics for disclosing physical climate risk and opportunities, and the integration of these disclosures into decision-making.

The confirmed high-level speakers at the conference will include:

  • Suma Chakrabarti, President, the EBRD
  • Roald Lapperre, Netherlands Deputy Minister for Infrastructure & Water
  • Frank Elderson, Executive Director, DNB (Netherlands Central Bank).

The panelists will represent a rich variety of market leaders such as Aon, Citi, Maersk, Moody’s and Standard Chartered, as well as the Bank of England, the French Treasury and the European Commission.

Findings from the expert working groups will also be published. The working groups include representatives from Allianz, APG, Aon, Bank of England, Barclays, BlackRock, Bloomberg, BNP Paribas, Citi, DNB, DWS, Lightsmith Group, Lloyds, Meridiam Infrastructure, Moody’s, OECD, S&P Global, Shell, Siemens, Standard Chartered, USS and Zurich Asset Management. An expert team led by Acclimatise and Four Twenty Seven is providing the Secretariat function to the working groups.

TCFD recommendations, released for the G20 summit in June 2017, call for the inclusion of metrics on physical climate risk and opportunities into financial disclosures by corporations and financial institutions. This is echoed in the recommendations of the European Union’s High Level Expert Group on sustainable finance, released in January 2018, and the Action Plan from the European Commission released in March 2018.

Last month the EBRD become a TCFD supporter, the first multilateral development bank to do so. The EBRD’s 2017 Sustainability Report, to be released later this month, will provide an initial outline of how TCFD recommendations relate to the Bank’s operations. The conference on 31 May will be an important milestone in the Bank’s support for the TCFD process.

Since 2006 the EBRD has invested over €22 billion in projects under its Green Economy Transition approach. Energy efficiency and environmental sustainability have been a priority for the Bank since its creation in 1991.

—————————————-

Contact CEO Emilie Mazzacurati for more information and read about Four Twenty Seven’s solutions to help financial institutions, businesses and governments improve their climate resilience.

Newsletter: Fintech Meets Climate Data

Posted on by Natalie Ambrosio

 

 

Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss a discussion with our new Chief Development Officer, our report on using climate data and cool new innovations in climate science!

In Focus: Fintech Meets Climate Data

Meet Chief Development Officer, Frank Freitas

We chatted with our new Chief Development Officer, Frank Freitas, about his motivations to join Four Twenty Seven after almost 30 years in finance and fintech, and his vision for new products and markets in climate analytics. Having spent his career developing award-winning solutions for global institutional investors, Frank is a seasoned veteran of product management and strategic planning.

He founded and sold Pluribus Labs, a research and analytics firm focused on the translation of unstructured data into investable signals. Before that, he served as Chief Operating Officer and Head of Product Strategy at Instinet, a leading technology-levered agency broker. He started his career in Product Management, designing and leading the delivery of quantitative risk solutions at Barra (now MSCI). “The acceleration of climate’s influence on corporate performance is upon us, and investors are rapidly awakening to the risks that climate change brings to financial markets,” Frank says. “Four Twenty Seven’s sophisticated climate data analytics are at the forefront of identifying most exposed corporations and assets globally, and we will continue to build on our expertise to provide best-in-class analytics of climate risk for our clients globally.”

 

Inside Market Data covers Frank’s transition to Four Twenty Seven and highlights the company’s goals for this year, including a focus on incorporating new types of data to add nuance to our risk analyses.

Read the Interview

Using Climate Data for Investment Decisions

Using Climate Data: A Four Twenty Seven Report


In this new Four Twenty Seven report, we demystify climate data with a clear breakdown of what it is, where it comes from and the nuances to consider when choosing which data products to use. Understanding the risks posed by climate change for facilities or infrastructure assets starts with conducting a risk assessment, which requires an understanding of the physical impacts of climate change. However, for unfamiliar users, climate data is hard to integrate into enterprise risk management, financial risk modelling processes and risk analysis.This climate data primer serves as an introduction for financial, corporate and government stakeholders striving to understand their exposure to physical climate change.

Read the Report

Innovations in Climate Science

Solar-Powered “Saildrones”

Two solar-powered sail boats are returning to California this month after debuting their ocean monitoring capacity on a trip through the Pacific. These drones are part of a collaboration between NOAA and Alameda-based startup, Saildrone, and they may be able to replace the costly bouy system that scientists currently use to obtain ocean circulation data. The boats collect temperature, wind and solar radiation data, while also measuring ocean circulation currents and gas exchange. These data are more precise than data collected by satellites or buoys and have the potential to provide powerful insights into studies of climate’s impact on ocean circulation.

Autonomous Ice Robots

A squad of “Seaglider” robots have been programmed with navigational algorithms for their year-long journey under Pine Island Glacier in Western Antarctica. Some may sink or get lost in ice caves, but the rest will collect data on salinity, temperature and oxygen content to inform scientific understanding of the rate of ice loss with climate change and implications for sea-level rise, floating to the surface to transmit their data.

Science Funding in the Federal Budget

The omnibus bill passed by Congress and signed by the President last month, did not include the funding cuts to critical climate research that many feared. NOAA received $5.9 billion, which is $234 million above its FY 2017 amount. NOAA has many resources for adaptation professionals and others striving to better understand how the natural world affects their lives and businesses, ranging from its satellite system and weather data to its integrated science programs and US Climate Resilience toolkit. This alphabetized list highlights over 20 such resources.

CRA Webinar: What You Need to Know About TCFD and 2018 Reporting Cycles

Thu, May 10, 2018 1:00 PM – 2:00 PM EDT 
Climate change has become a growing concern for corporations, investors, and financial regulators alike. Corporations need to understand how the impacts of a changing climate may affect company operations or their broader value chain and assess how such impacts should be included in corporate disclosures and sustainability reports.

Emilie Mazzacurati will present an overview of how corporations can identify material risks, provide an update on rising regulatory requirements and changes to voluntary reporting frameworks to align with TCFD recommendations, and highlight opportunities to build resilience and adapt to new market conditions.

This programming is provided exclusively for Corporate Responsibility Association members and invited guests. To RSVP email Jen Boynton at jboynton@3blmedia.com.

Inside the Office at Four Twenty Seven

Four Twenty Seven Website Features New Insights Page

 
Our blog page has been revamped with featured articles at the top and an interactive filter feature that allows users to sort by author, client, media type and theme or to search for keywords.

Our most read publications this month include:

Upcoming Events

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

  • April 30 – May 1: 2018 Local Solutions Eastern Climate Preparedness Conference, Manchester, NH: Advisory Services Manager, Katy Maher, will discuss strategies to build local resilience with this convening of government stakeholders.
  • May 1: TCFD US Scenario Analysis Conference, New York, NY: Founder and CEO Emilie Mazzacurati and Chief Development Officer, Frank Freitas, will join this discussion about using scenario analysis in climate-related risk disclosure and resources to help corporations do so.
  • May 10: What You Need to Know About Climate Related Financial Disclosures (TCFD), CRA Webinar: Emilie Mazzacurati is the presenter on this webinar about corporate climate risk disclosure. CRA members only.
  • May 17: GRESB’s Sustainable Real Assets Conference, Washington, DC: Emilie Mazzacurati will keynote GRESB’s annual conference on infrastructure resilience and Chief Development Officer, Frank Freitas will join the convening.
  • May 23: Four Twenty Seven Webinar, 11am-12pm PST: Save the date for a webinar on city level physical climate risks and opportunities to access climate adaptation and resilience financing. Registration details forthcoming.
  • 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 Frank Freitas and Senior Risk Analyst, Léonie Chatain, to discuss ratings and engagement on physical climate risk in equities.
  • June 12-14: VERGE Hawaii, Honolulu, HI: Advisory Services Manager, Kendall Starkman, will join 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.

Twitter
Twitter

LinkedIn
LinkedIn

YouTube
YouTube

Facebook
Facebook

Website
Website

Email
Email

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

 

 

 

This email was sent to

 

 

Using Climate Data – 427 Technical Brief

Posted on by Natalie Ambrosio

April 25, 2018 – 427 TECHNICAL BRIEF. Financial institutions, corporations, and governments  increasingly strive to identify and respond to risks driven by physical climate impacts. Understanding the risks posed by climate change for facilities or infrastructure assets starts with conducting a risk assessment, which requires an understanding of the physical impacts of climate change. However, climate data in its raw form is difficult to integrate into enterprise risk management, financial risk modelling processes, and capital planning. This primer provides a brief introduction to climate models and data from a business or government perspective.

The first of several reports explaining the data and climate hazards analyzed in Four Twenty Seven’s equity risk scores and portfolio analytics, Using Climate Data unpacks the process through which raw climate data is transformed into usable metrics, such as future temperature projections, to help financial, corporate and government users productively incorporate climate-based analytics into their workflows. Beginning by explaining what a global climate model is, the report explains climate data’s format, computational choices to hedge uncertainty and resources for aggregated climate projections tailored to specific audiences.

Key  Takeaways

  • Climate models are simulations of the Earth’s future conditions. Climate projections are based on a compilation of many models and are publicly available.
  • Regional climate models and statistical downscaling improve the resolution of data produced by global climate models and are thus valuable options when projections are only needed for one location or several in the same region.
  • Climate models can be used to project future trends in temperature and precipitation, but can not project discrete storms or local flooding from sea level rise, which require additional data and analysis.
  • Different time horizons of climate projections have different strengths and limitations so it is important to select the data product best suited to a specific project’s goal.
  • There are several drivers of uncertainty in climate models and strategies to hedge this uncertainty can help users correctly interpret and use climate projections.

Download the Report.

Can Investors Anticipate the Impacts of Climate Change on Equities?

Posted on by Natalie Ambrosio

427 ANALYSIS – The physical impacts of climate change drive millions of dollars of losses for corporations every year, as experienced by Honda and Toyota during the 2011 floods in Thailand. Investors equipped with data on corporate production facilities and climate projections can manage their risk exposure more effectively and reduce downside risk.

Risk is one of the most widely understood and discussed components of the investment management process today. Informed tradeoffs of risk and return are fundamental to modern investment practices across asset classes and investment styles.  And yet, an important dimension of risk – physical risk from companies’ exposure to climate volatility – has yet to find its way into the mainstream investment process.

Monsoons Damage Automobile Manufacturers

Climate change’s influence on economies, sectors and companies is an increasingly important factor in identifying and balancing the tradeoffs between risk and return.  For example, the heavy monsoon season that led to severe flooding across Thailand in late June 2011 through December, inundated 30,000 square kilometers1 and caused widespread economic damage. Automobile manufacturers such as Toyota and Honda were particularly affected by suspended operations and supply chain disruptions, which led to reduced production internationally and affected global sales and profitability long after the rains stopped.

Figure 1. Honda and Toyota facilities’ exposure to extreme rainfall. Orange dots represent facilities with higher risk.

As shown in Figure 1, both companies possess a diversified set of production facilities in the area affected by the flooding, including stamping facilities and sub-component manufacturers, which do not only service downstream processes in Thailand but in other production centers as well. These same facilities all score high for extreme rainfall in our global corporate facility database, signaling high vulnerability to flood risk for Honda and Toyota – a risk that will only worsen in the future.

Figure 2. Japanese Automobile & Components Manufacturers’ exposure to sea level rise by facility. Red indicates high sea level risk, while green represents lower risk.

Sea Level Rise in Japan

Investors must also anticipate forward-looking risks – what will climate change bring, and which companies are most affected? Understanding and preparing for volatility in returns requires an in-depth awareness of a company’s facilities and the climate risks which those facilities face.  Given their global footprint, many businesses are exposed to diverse hazards such as extreme heat, water stress, cyclones and sea level rise, in addition to extreme precipitation. Thus, the factors we include to model a company’s physical risk to climate change include the sector characteristics, operational needs and the regional conditions where facilities are located. While flood damage and manufacturing delays in Thailand damaged Honda and Toyota, Figure 2. shows these companies are also exposed to sea level rise at hundreds of facilities in their home market of Japan.

Assessing Companies’ Exposure to Climate Risk

Our data interweaves climate analytics with financial markets data to provide a robust view of companies’ risks and identify those that are less likely to experience financial losses due to increasingly frequent extreme weather events. Facility-level assessment of these risks is an intensely data-driven exercise that requires the combination of terabytes of data from climate models with information on complex company structures. We translate this analysis into a clear result to inform financial strategy. Armed with this understanding, investors and corporations alike can achieve a new and more valuable balance of risk and return.

Figure 3. Global exposure to water stress of all facilities in Four Twenty Seven’s database.

————————

Four Twenty Seven’s ever-growing database now includes close to one million corporate sites and covers over 1800 publicly-traded companies. We offer equity risk scoring and real asset screening services to help investors and corporations leverage this data.

 

  1. Emma L. Gale and Mark A. Saunders, “The 2011 Thailand Flood: Climate Causes and Return Periods,” Weather 68, no. 9 (2013): 233–37.

Newsletter: Advancing TCFD Guidance on Physical Climate Risk & Opportunities

Posted on by Natalie Ambrosio

 

 

Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss our update on upcoming EU regulations, our analysis on lessons learned from Art. 173 in France, and our conference calendar for the spring!

In Focus: Advancing TCFD Guidance on Physical Climate RIsk and Opportunities

An initiative from the European Bank for Reconstruction and Development and the Global Center for Excellence in Climate Adaptation

The European Bank for Reconstruction and Development (EBRD) and the Global Centre of Excellence on Climate Adaptation (GCECA) are hosting an event: “Advancing TCFD guidance on physical climate risk and opportunities,” which will be held on 31 May at the EBRD’s headquarters in London. This event will be a forum for senior representatives from the financial and business community to discuss and identify the way forward for the development of metrics for disclosing physical climate risk and opportunities, as well as pointers for integrating physical climate risk considerations in scenario-based decision making by businesses and financial institutions.

In preparation for this event, the EBRD has been hosting working groups focused on advancing and fleshing out the recommendations from the Task Force on Climate-related Financial Disclosure’s (TCFD) final recommendations released for the G20 summit last June. The TCFD recommended the inclusion of metrics on physical climate risk and opportunities in financial disclosures and called for further research and concrete guidance on what the appropriate metrics would be.

The conference will feature the findings from expert working groups that include representatives from Allianz, APG, AON, Bank of England, Barclays, BlackRock, Bloomberg, BNP Paribas, Citi, DNB, Deutsche Asset Management, Lightsmith Group, Lloyds, Meridiam Infrastructure, Moody’s, OECD, S&P Global, Shell, Siemens, Standard Chartered, USS and Zurich AM

Four Twenty Seven provides the technical secretariat for this initiative in partnership with Acclimatise. Learn more about the conference: “Advancing TCFD Guidance on Physical Climate Risk & Opportunities.” 

EU Moves Towards Regulation for Climate Risk Disclosure

EC Releases its Action Plan: Financing Sustainable Growth

Earlier this month the EU laid out a clear plan to move towards mandatory climate risk disclosure as part of a new set of regulations to finance sustainable growth and support the transition to a low-carbon economy. The European Commission’s Action Plan lays out a two year timeline for implementation, with a goal to create a taxonomy for climate adaptation finance by the end of 2019. These regulations from the EU will drive change into financial markets globally and set standards on reporting, disclosures and infrastructure resilience that will likely set the bar for the rest of the world.

The EC based the Action Plan on the High-Level Expert Group on Sustainable Finance’s (HLEG) final recommendations for actions to drive the transition to a sustainable financial system. The HLEG was created by the EC in December 2016 to determine how the regulatory landscape should transform to support efforts towards the goals of the Paris agreement and  promote the financing of a sustainable, resource-efficient economy. As the group’s report was eagerly awaited as a blueprint for market transformation in Europe, the EC’s Action Plan is expected to propel that transformation forward while prompting international conversation.

Read the Analysis

Lessons Learned from Article 173 Reporting

How are French investors reporting physical risk?
A Four Twenty Seven analysis

The first year of reporting under Art. 173 in France saw limited uptake of disclosures of physical risk and opportunities. We reviewed disclosures from 50 asset owners in France and found that only a quarter of respondents included substantial analysis and metrics on their exposure to physical impacts of climate change. We find insurance companies AXA and Generali provided the most detailed analysis for property portfolios, while FRR and ERAFP were the only pension funds to provide an initial assessment of physical risk exposure in their equity and fixed income portfolios.

Read the Analysis

More good reads on climate risk disclosures:

Extreme Weather Hurts Corporations

Weather Affects Company Performance

Whether it’s extreme heat diminishing worker productivity, winter storms damaging roads and power lines or one of countless other impacts, extreme weather causes harm to businesses’ facilities, their workers and supply chains, and leads to financial impacts. The World Resources Institute’s recent report, “Water Shortages Cost Indian Energy Companies Billions,” highlights findings that India’s thermal power is so reliant on water for cooling that the largest thermal utilities had to close at least once between 2013-2016 and lost about $1.4 billion in revenue. In the article “5 Things Companies Can Do to Grow in a Water-Stressed World,” Water Deeply describes ways that companies are mitigating their risk by proactively addressing water resource limitations.

Climate-related Risk for Telecommunications

Companies in different sectors will be affected differently by three types of climate risk. Novethic’s article “L’impact des risques climatiques sur les entreprises, le cas d’Orange,” provides direct examples of how physical climate risk, transition risk and reputation/legal risk directly threaten companies. In a discussion of Orange, a telecommunications provider, the article highlights the complex factors that companies must consider in addition to their impact on CO2 emissions. Such considerations include a company’s potential to promote innovations for resilience in society through programs ranging from apps that organize carpooling to smart metering.

Inside the Office at Four Twenty Seven

Meet Guest Researcher, Nora Pankratz

Four Twenty Seven is excited to welcome Nora Pankratz as a guest researcher. Nora is a Ph.D. candidate in Finance at the European Center for Corporate Engagement at Maastricht University in the Netherlands. Her research focuses on the impact of extreme temperatures on the financial performance of public firms. For the next several months Nora will be based in Berkeley, working with data collected by Four Twenty Seven to develop a research project on the translation of climate risks into financial risks.

Upcoming Events

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

  • March 19-21: ClimateCon, Asheville, NC: Katy Maher, is at this convening of science and businesses professionals focused on building climate resilience.
  • March 26-27: Financial Risks International Forum, Paris, France: Léonie Chatain, will attend this annual conference on emerging risks in the financial and insurance sectors.
  • April 2:  ICARP TAC Quarterly Meeting, San Francisco, CA: Natalie Ambrosio will participate in the Adaptation Vision Framework workshop hosted by the Governor’s Office of Planning and Research.
  • April 3-6: Sustainatopia, San Francisco, CA: COO Colin Shaw, will speak on a panel on ESG investing and a panel on climate risk at this annual convening of sustainability and financial experts.
  • April 9: Financing Climate Change Adaptation, New York, NY: Founder and CEO Emilie Mazzacurati will participate in a private investor workshop on financing adaptation in US cities, organized by C40, NY City and GARI.
  • April 10-11:  Responsible Investors Asia, Tokyo, Japan: Meet with the Four Twenty Seven team to discuss physical climate risk in equities and infrastructure portfolios.
  • May 17: Sustainable Real Assets Conference, Washington, DC: Founder and CEO Emilie Mazzacurati will keynote GRESB’s annual conference on infrastructure resilience.
  • 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.
  • June 5-6: Responsible Investors Europe, London, UK: Meet with the Four Twenty Seven team to discuss ratings and engagement on physical climate risk in equities.
  • 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.
  • 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.

Twitter
Twitter

LinkedIn
LinkedIn

YouTube
YouTube

Facebook
Facebook

Website
Website

Email
Email

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 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

 

 

 

This email was sent to