Four Twenty Seven was acquired by Moody’s Corporation in 2019 and officially became a part of Moody’s ESG Solutions Group in 2020. The Four Twenty Seven brand name has been retired and replaced with Moody’s ESG Solutions.
The analysis highlights several areas with particular exposure to increasing sea level rise, which threatens property value growth and associate tax revenue, in turn increasing credit risk. Increased disruption due to coastal flooding disrupts the local economies that rely on coastal economic activities to generate revenue. Likewise, areas less exposed to flooding are prone to climate gentrification, as property values increase when these areas become more desirable and residents can be displaced. Though it can be expensive, effective, equitable adaptation measures can reduce vulnerability to sea level rise and support credit-quality. This requires tax revenue, financial capacity, and growth strategies that aim to protect vulnerable local economies and property values.
Coastal economies across the U.S. are exposed to the impacts of sea level rise. However coordinated adaptation efforts between federal, state and local governments can reduce risks. Areas such as Gulf Coast states lag in state-level adaptation policies, causing local governments to shoulder the financial burden of sea level rise, and straining their credit quality. Federal government leadership and increased funding is key in supporting adaptation measures that mitigate the impacts of sea level risks in coastal areas.
While real estate investment trusts (REITs) can manage the current physical risks of climate change, increased asset exposure to climate hazards will pose greater challenges. In its sector in-depth, REITs Can Manage Climate Risk, Investments Needed to Address Growing Challenges, Moody’s Investors Service leverages Four Twenty Seven’s climate risk data to assess climate risk for 15 rated US REITs.
REITs are most exposed water stress in regions such as California and the Southwest while heat stress puts strains on operating costs in California, the mid-Atlantic and several Northeast locations. For the REITs assessed in the report, hurricane and sea-level rise risk pose less severe threats than they do in some coastal markets. pose modest influence in comparison to heat and water stress for most property locations. Floods pose a modest risk to most assessed REITs.
The analysis found that factors such as the power to pass improvement costs to tenants and local government investment in resilience can mitigate these growing risks. While insurance has traditionally been another risk mitigation technique, these growing changes demand larger capital investments. Asset-level resilience measures can help protect properties from the the impacts of hazards and reduce increased operating costs.
Moody’s subscribers can read the full report here.
How will climate change increase wildfire potential? This Four Twenty Seven webinar shares our methodology for assessing global wildfire potential and highlights key findings from our analysis.
Natalie Ambrosio Preudhomme, Director, Communications, provides an introduction to the implications of wildfires for finance, business and government stakeholders.
Colin Gannon, Director, Research, explains Four Twenty Seven’s methodology for assessing wildfire potential.
Lindsay Ross, Director, Global Client Services, shares key findings from the analysis, highlighting regional hotspots and discussing actionable ways to leverage this data to inform investment in resilience.
Increasing physical climate hazards affect the operations and costs of nuclear plants due to their water needs and reliance on critical equipment. In its report, Nuclear Operators Face Growing Climate Risk but Resiliency Investments Mitigate Impact, Moody’s Investors Service leverages Four Twenty Seven’s physical climate risk data to explore the exposure of nuclear power plants to climate hazards, including heat stress, water stress, flooding and hurricanes.
The analysis found that nuclear power plants are vulnerable to increasing frequency of extreme weather conditions such as flooding and storm surge, due to their need for water cooling which means many plants are adjacent to large bodies of water. Technology and equipment required for safe plant operation are susceptible to damage and nuclear plants along the East Coast and the Gulf of Mexico are particularly exposed to floods from sea level rise.
Clustered in the Midwest and eastern part of the U.S., market-based plants face less risk of hurricanes or sea level rise than regulated/cost-based plants. However, they face increased heat stress and water stress which can reduce plants’ cooling capacity. The credit impact for market-based plants can be more significant than the regulated plants that are more easily able to make-up costs through rate recovery programs.
Nuclear plant operators face physical and economic risks due to extreme events driven by climate change, and operators and owners will have to consider these risks and explore increased resilience options, as they approach license expiration and renewal processes between 2030 and 2050.
Four Twenty Seven's monthly newsletter highlights recent developments in climate risk and resilience. This month we share new data on wildfire potential, highlight the connection between racial justice and climate change and feature new reports on climate risk.
In Focus: Projecting Future Wildfire Potential
Four Twenty Seven Analysis - Days of High Wildfire Potential will Increase by Up to Three Months in Most Exposed Regions
Areas ranging from California and Australia to the Amazon, Spain and the Arctic have experienced unprecedented loss of life and damage from wildfires in the past several years. Climate change is already making wildfires more severe and Four Twenty Seven's latest analysis finds that it will lead to more days with high wildfire potential in areas already prone to wildfires, and create hotter and drier conditions that will expose entirely new areas.
This analysis leverages Four Twenty Seven's new dataset, which provides the only known globally comparable assessment of future wildfire potential in a changing climate at a scale of approximately 25 kilometers by 25 kilometers. The data is built upon the two key factors of soil moisture deficit and wildfire fuel type and incorporates data from global climate models to provide a view of changing conditions by 2030-2040, capturing both absolute and relative change in frequency and severity. This new data is now available on-demand for our clients via Four Twenty Seven’s Physical Climate Risk Application for real assets.
Register for our webinar on August 20th at 8am PST / 11am ET / 16:00 BST to learn more about the methodology and findings.
Exploring Environmental Justice and the Need for Equitable Adaptation
The relationship between race and climate change is too often ignored. The recent protests for racial justice and police reform call attention to the fact that racism is still deeply embedded in our institutions and public policies. In the United States, people of color are disproportionately affected by polluting industries and climate change, while at the same time often lacking the resources to prepare and being excluded from decision-making on adaptation investment.
As part of our commitment to help raise awareness of the nexus between racial justice and climate change, Four Twenty Seven published a two-part blog series on the nexus of racial justice and climate change. The first blog focuses on exposure, providing a brief overview of environmental injustice issues in the U.S., and shedding light on the disproportionate impacts of climate change on Black communities and people of color. One solution is to ensure that climate adaptation intentionally considers this disproportionate exposure, factoring racial equity into decision-making. The second blog on adaptation outlines the need to integrate equity into adaptation and highlights emerging best practices.
Last week Four Twenty Seven and Moody's hosted a webinar exploring these topics. Four Twenty Seven's Yoon Kim discussed disproportionate exposure of people of color to climate hazards, Moody's Investors Services' Ram Sri-Saravanapavaan presented on the implications of inequality on sovereign credit, Tulane's Jesse Keenan discussed climate justice in urban development and UC Irvine's Michael Méndez presented on racial equity in climate policy. Register here to watch the recording.
This regional award showcases vendors and end users with high quality solutions with global relevance that are also especially pertinent to Asia markets.This came as financial regulators across the Asia-Pacific region have increasingly contributed to the global call for increased measurement and disclosure of climate risks in investment portfolios, encouraging financial actors to step up. With an office in Tokyo and a partnership with Sydney based DB Funds Advisory, Four Twenty Seven is excited to bring our award-winning climate risk data to more financial stakeholders in these markets.
Four Twenty Seven Recognized in Exeleon Magazine's Top Companies
Business and Tech Magazine Exeleon, includes Four Twenty Seven in its listing of the top 100 companies to watch in 2020. "While the past several years have seen an increase in awareness of the material risks of climate change, Four Twenty Seven was on the leading edge of analyzing many complex scientific datasets and translating them for financial and business stakeholders." Exeleon writes. "Emilie and her team publish deeply data-driven and location-specific analysis, based on the best available climate data and the specific need of financial stakeholders."
Four Twenty Seven Partners with Nova Group
Nova's Climate Resilience Assessment Leverages Four Twenty Seven's Physical Risk Data
risk data now informs Nova’s new Climate Resilience Assessment, providing resilience recommendations based on the risks and characteristics of the specific asset of interest.
Inside the Office at Four Twenty Seven
Associate Director, Research - Stephanie Auer
Four Twenty Seven welcomes Stephanie as Associate Director, Research. Stephanie develops and incorporates metrics of novel climate indices into Four Twenty Seven’s products and services. Stephanie’s background is in data science and conservation ecology. She has worked for NatureServe and the California Academy of Sciences in ecological forecasting, data visualization and mapping, with a focus on analysis and communication for climate change adaptation planning.
Join the team! Four Twenty Seven is Hiring
There are several opportunities to join Four Twenty Seven's dynamic team. See the open position below and visit our Careers page and Moody's Careers page for more information.
IAM Modeler with expertise in Integrated Assessment Models (IAMs) and in translating IAM outputs for a wide range of stakeholders
Join the team online at these upcoming events and check our Events page for updates: