Category: Real Assets Screening

Newsletter: The US prioritizes climate change

Posted on by Natalie Ambrosio

Four Twenty Seven, an affiliate of Moody's, sends a monthly newsletter highlighting recent developments in climate risk and resilience. This month we discuss the Biden Administration's climate policy, share new climate change records and include recent books on climate risk in the financial sector. 
In Focus: Climate Risk a Priority in the US

First Week Signals Biden Administration's Commitment to Climate Action 
The Biden Administration has named climate changes as one of four top priorities, alongside the COVID-19 pandemic, racial justice and the economic crisis. Beyond rejoining the Paris Agreement, several of Biden's executive orders in his first week in office relate directly to climate, while others have significant implications for the environment. For example, in an executive order on public health and the environmental, federal agencies are mandated to comply with Obama-era regulations prioritizing climate change adaptation and resilience rolled back by Trump. Further, one of his first executive orders stated that regulatory reviews should promote concerns such as public health, environmental stewardship, racial justice and the interests of future generations rather than focusing on a cost-benefit analysis, which typically fails to fully recognize non-economic  benefits. There have been several key climate appointments and climate has emerged as a critical issue across many agencies, so this will remain a space to watch in the coming months.

The US Financial Regulators Begin to Move on Climate
On Monday the Senate approved Janet Yellen for treasury secretary, after she committed last Tuesday that the Treasury would examine the financial risks of climate change and appoint a senior official to lead climate initiatives. Meanwhile, this week the Federal Reserve announced a climate committee with a mission to "assess the implications of climate change for the financial system — including firms, infrastructure and markets in general." The central bank has slowly been increasing its participation in the dialogue on climate risk and this step signals that it may be starting to truly prioritize the issue.

The Federal Housing Finance Agency (FHFA), which regulates Fannie Mae, Freddie Mac and the Federal Home Loan Banks, issued a Request for Input on climate risk for its regulated entities. The consultation asks about identifying climate risks and about options to integrate climate risk management into the FHFA's regulatory framework. Respond by April 19.
Climate Records Broken Repeatedly
There was a record 50 billion-dollar extreme weather events endured globally in 2020, with a total of $268 billion in total economic losses according to Aon. While the most costly disaster last year was the summer monsoon flooding in China, causing $35 billion in damage, the majority of the damage from extreme weather was in the US.

It's thus fitting that this past year also ties with 2016 for the hottest year on record, even during a La Niña event, which is a phase in the global climate cycle that typically leads to cooler years. The seven years we just experienced are the seven warmest years on record.

Meanwhile, scientists continue to increase our understanding of glacier dynamics and the implications for global sea level rise. A paper published on Monday found that global sea ice, glaciers and ice sheets are melting 57% faster than they were three decades ago.
Physical Climate Risk for Sovereigns

Four Twenty Seven Analysis: Over 25% of the world's population in 2040 could be exposed to severe heat stress and 57% of the economy could be exposed to flooding 
More frequent and severe extreme events driven by climate change pose a significant threat to populations and economies around the world and understanding who and what is exposed to climate hazards is essential to pricing this risk and preparing for its impacts. Four Twenty Seven's report, Measuring What Matters: A New Approach to Assessing Sovereign Climate Risk, builds on new analytics assessing sovereign exposure to floods, heat stress, hurricanes and typhoons, sea level rise, wildfires, and water stress based on the only known global dataset matching physical climate risk exposure to locations of population, GDP (Purchasing Power Parity) and agricultural areas within countries. 
Read the Analysis
The Latest Books on Climate Risk & Sustainable Finance 

Values at Work: Sustainable Investing and ESG Reporting,
This recent book highlights the latest research on sustainability topics of growing interest to investors, including climate change, pollution, diversity, governance, economic inequality and others. Four Twenty Seven wrote a chapter titled “Asset-Level Physical Climate Risk Disclosure.” The chapter discusses the need for consistent, comparable metrics for physical risk disclosure, using the pharmaceutical sector as a case study to examine climate risk disclosure versus climate risk exposure. 

Carbon Risk and Green Finance
This new book provides a comprehensive primer on both physical and transition climate risks as financial risks. It covers the emergence of reporting frameworks and mandatory disclosure laws in recent years. The latter portion examines the datasets and approaches that can be leveraged to assess and report climate risk, including emerging topics such as climae stress testing and scenario analysis, citing Four Twenty Seven.
Climate Change, Real Estate and
the Bottom Line

Webinar Recording
How will climate hazards like sea level rise and flooding affect real estate and how is the industry preparing? In this webinar in the Goodwin and MIT Center for Real Estate series, The Path to Tomorrow, Global Head of Climate Solutions at Moody's and Founder & CEO of Four Twenty Seven, Emilie Mazzacurati, joins insurance and finance professionals to discuss climate risk for real estate developers, investors and owners.
What the Recording
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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.
 

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Moody’s Launches DataHub, Collating Billions of Data Points for Decision-Makers to Explore and Analyze

Posted on by Natalie Ambrosio

Moody’s launches a new data platform, DataHub, providing data on corporates, real estate and macroeconomic variables, including climate, ESG and credit risk across asset classes. Read the press release from Moody’s:

NEW YORK–(BUSINESS WIRE)–Moody’s Corporation (NYSE:MCO) today announced the launch of Moody’s DataHub, a new cloud-based analytical platform that integrates data from across Moody’s, including its affiliates. Moody’s DataHub enables financial and risk decision-makers to explore, analyze and consume a wide range of relevant information seamlessly and efficiently.

“With Moody’s DataHub, we are bringing our vast assets together to support today’s data science and analytic needs,” said Stephen Tulenko, President of Moody’s Analytics. “Moody’s is helping customers seamlessly analyze financial and nonfinancial information, combining structured and unstructured data to support better decisions.”

Moody’s DataHub provides access to billions of data points to inform more holistic risk management and investment decisions. Coverage includes:

  • Over 4.5 million active and historical ratings from Moody’s Investors Service
  • Default and recovery data dating back to 1920 covering more than 800,000 securities and 59,000 issuers
  • Probabilities of default for more than 60,000 publicly traded firms from Moody’s CreditEdge
  • Nearly 400 million private and public entities from Bureau van Dijk’s Orbis database
  • More than 5,000 ESG assessments from V.E, part of Moody’s ESG Solutions Group
  • Climate risk scores for over 5,000 companies and 200 sovereigns from Four Twenty Seven, part of Moody’s ESG Solutions Group
  • Over 40 million loans underlying US RMBS, CMBS, and CDO transactions
  • 30-year forecasts of more than 2,100 major macroeconomic variables from Moody’s Analytics U.S. Macro Forecast Database

Moody’s DataHub delivers cross-referenced datasets in a centralized area with sophisticated analytical capabilities. The platform facilitates a holistic view of risks and opportunities related to credit, real estate investments, and climate, and provides essential inputs for Know Your Customer (KYC) onboarding and compliance screening, master data management, and entity resolution.

Easily accessible data previews, along with a readily available data dictionary and documentation, allow users to explore and efficiently interact with Moody’s datasets. Using Moody’s DataHub’s advanced tools, customers can discover and transform data while collaborating in secure environments, blending Moody’s data with their own to create engineered products and services.

“Moody’s DataHub gives customers transparency and control, and the platform was designed to facilitate rigorous data analysis while being straightforward to use,” said Mr. Tulenko. “We will continue to add datasets to the platform and will enhance its analytical capabilities in line with our commitment to deliver market-leading solutions for decision-makers.”

For more information on Moody’s DataHub and a full list of the datasets currently available through the platform, please visit the website.

Webinar Recording: Climate Change, Real Estate and the Bottom Line

Posted on by Natalie Ambrosio

This webinar on Climate Change, Real Estate and the Bottom Line  features a discussion on the interactions between climate change and real estate investment, development and operations. It’s part of the webinar series The Path to Tomorrow, hosted by Goodwin and the MIT Center for Real Estate.

Speakers

  • Emilie Mazzacurati, Global Head of Moody’s Climate Solutions and Founder and CEO of Four Twenty Seven
  • Carl Hedde, Head of Insurance Practice, One Concern and Principal, CGH Consulting, LLC
  • Rose Marie E. Glazer, Senior Vice President, Corporate Strategy and Deputy General Counsel, AIG
  • Steve Weikal, Head of Industry Relations, MIT Center for Real Estate
  • Minta Kay, Partner and Chair, Real Estate Industry Group; Co-Chair, PropTech Group, Goodwin

Newsletter: US Climate Risk Disclosure, Climate at Moody’s ESG and more

Posted on by 427-admin

Four Twenty Seven's monthly newsletter highlights recent developments in climate risk and resilience. This month we feature an analysis on US climate risk disclosure, highlight developments at Moody's ESG Solutions and share recordings of recent climate risk events.
In Focus: Are U.S. Corporates Ready for Climate Risk Disclosures?

Analysis: The State of Climate Risk Disclosure in the US

The results from the U.S. presidential elections signal an impending radical shift in U.S. climate policy. President-elect Biden’s transition team identified climate change as one of four top priorities, promptly followed with the appointment of John Kerry as special envoy for climate. As part of his transition plan, Biden announced ten executive actions related to climate change that he intends to take on his first day in office. One of these measures is the requirement for public companies to disclose climate risks and greenhouse gas emissions in their operations and supply chains. This disclosure requirement aligns with a global trend, following similar announcements in the UK and in New Zealand.

In light of this increasing focus on climate risk regulation, our latest analysis uses the TCFD Climate Strategy Assessment dataset from Moody's affiliate V.E to explore how US firms stand against policy recommendations outlined in recent reports by the US Commodity and Futures Trading Commission (CFTC) and the Business Roundtable (BRT), including implementing a carbon price, conducting scenario analysis and creating products that contribute to the transition to a low-carbon economy.

We find that the largest US corporations tend to be slightly behind in terms of disclosing key indicators compared to their international peers. However, among all assessed regions, not even a quarter of the firms disclose the indicators reviewed in this assessment. This demonstrates the significant room for progress and shows that increasing firms’ capacity to assess and disclose climate risks in an informative manner remains a global challenge, aligning with findings in the TCFD's 2020 Status report released last month.
Read the Analysis
Climate Risk at Moody's ESG Solutions

Emilie Mazzacurati Appointed Global Head of Moody's Climate Solutions
Moody's announced last week that Four Twenty Seven Founder and CEO, Emilie Mazzacurati will oversee the climate solutions suite within Moody’s ESG Solutions Group, a new business unit formed earlier this year to serve the growing global demand for ESG and climate analytics. As part of its climate solutions suite, Moody’s ESG Solutions provides risk measurement and evaluation tools to understand, quantify and manage physical and transition risks, informing due diligence and risk disclosure in line with the recommendations from the Taskforce on Climate-related Financial Disclosures (TCFD).
Emilie also remains CEO of Four Twenty Seven, which is now fully owned by Moody's. 

Moody's Analytics Wins Climate Risk Award at Chartis RiskTech100®
Moody’s Analytics won the Climate Risk category in the 2021 Chartis RiskTech100®  highlighting its commitment to integrating climate analytics into its world-class risk models.
Moody’s Analytics' offering helps customers first identify whether they have exposure to climate risk in their portfolios and then quantify the credit risk implication of climate risk factors. These solutions incorporate climate risk analytics from Moody's ESG Solutions powered by Four Twenty Seven and V.E.

Moody’s: Climate Risk and Resilience at US Airports
Climate change will expose the airport sector to increased physical climate risks within the next two decades. In its report, US airports face growing climate risks, but business model and resiliency investments mitigate impact, Moody’s Investors Service leverages Four Twenty Seven’s physical climate risk data to explore potential damages from increased exposure of US airports to floods, heat stress, hurricanes, sea level rise and wildfires. The report finds significant exposure to floods and sea level rise, which can damage crucial structures, leading to significant costs or rendering the assets unusable. Hazards such as heat stress and wildfires present risks with implications for take-off and landing. Airports often undertake long-term capital intensive projects and integrating resilience measures into planning these investments will be critical. Register for free to read the report.
Climate Change and Financial Stability

Financial Stability Board Releases Report on Climate Risk
Yesterday the Financial Stability Board (FSB) released its report, The Implications of Climate Change for Financial Stability, outlining the ways in which physical and transition risks may affect the financial system. It highlights how physical risks can decrease asset prices, increasing uncertainty and how a disorderly transition could also destabilize the financial system, while an orderly transition is expected to have a less significant impact on asset prices. Likewise, the report emphasizes that climate risk could amplify credit, liquidity and counterparty risks and interact with other macroeconomic risks, with significant implications for financial stability.
Earlier this month the Federal Reserve announced its application to join the Network for Greening the Financial System, expecting to gain membership by the group's annual meeting next April. The Governor of the US Federal Reserve is also the Chair of the FSB and such recent events may foreshadow more attention to climate risks at the Fed.
Public Consultations on Climate Risk

EIOPA Consultation on Climate Change Scenarios
The European Insurance and Occupational Pensions Authority (EIOPA) opened a public consultation on its draft opinion on the supervision of the use of climate change risk scenarios in ORSA. This consultation is a follow-up to EIOPA's recommendations that insurers integrate climate risks into their governance and risk management beyond a one-year time horizon, aiming to provide additional guidance on the supervision of these processes. Respond by January 5, 2021.

Hong Kong SFC Consultation on Climate Risk Management for Funds
The Hong Kong Securities and Futures Commission (SFC) opened a public consultation on its proposed guidance for fund managers to integrate climate risk into their investment decision-making and to release climate risk disclosures. The guidance applies to all fund managers, while those with at least HK$4 billion under management would have to comply with additional requirements, such as disclosing more quantitative metrics. The recommendations reference the TCFD Recommendations to encourage consistency in risk disclosure. Respond by January 15, 2021.

TCFD Consultation on Forward-looking Metrics
The Task Force on Climate-related Financial Disclosures (TCFD) released a public consultation on decision-useful forward-looking disclosure metrics for financial institutions. Recognizing the growing need for standards guiding forward-looking, comparable climate risk disclosures, it solicits input on the utility and challenges of disclosing certain forward-looking metrics, including metrics on implied temperature rise and value at risk. Respond by January 27, 2021. 
 
Climate Analytics for Financial Risk Assessment: Panel Recordings

Moody's Analytics Synergy Americas Conference

Founder & CEO, Emilie Mazzacurati, and Moody’s Analytics Managing Director, Global Head of Quantitative Research, Jing Zhang, discuss the impacts of climate risk on credit risk in the panel, “How Floods, Wildfires, and Heat Stress Can Play a Role in Financial Reporting and CECL.” Register for free to access the recording.
 

Risk Australia Virtual 2020: Taming the Green Swan

Emilie Mazzacurati presents a keynote presentation titled “Taming the Green Swan: Incorporating Climate Risk into Risk Management.” She covers changes in the regulatory environment and how investors can use science to inform risk management and investment decisions. Emilie discusses progress made on climate risk disclosure to date, explains the latest thinking on conducting scenario analysis for climate risks and provides case studies of the economic impacts of climate risk in Asia and Australia. 
Webinar: How Real Estate Can Adapt and Prepare for Climate Risks

Join us on Thursday Dec. 10 at  9am PST / 12pm ET / 5pm GMT
We’re already seeing the impacts of climate change on our real assets—so how do we better prepare for future climate events? Four Twenty Seven will join CBRE, Measurabl and Nova Group GBC to discuss the full process of integrating physical climate risk management into real estate investment. The webinar will include an explanation of the climate data driving the analytics, how to understand physical climate risks alongside broader ESG data and how to leverage this information to mitigate risk by building resilience.

Speakers:
  • Zachary Brown, Director of Energy and Sustainability at CBRE
  • Yoon Kim, Managing Director, Global Client Services at Four Twenty Seven
  • Cameron Ravanbach, Account Manager at Measurabl
  • Rob Jackson, Vice President, Equity Markets Group at Nova Group, GBC
Register Here
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Copyright © 2020 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:
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Berkeley, CA 94709

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Moody’s Analytics Wins Climate Risk Award at Chartis RiskTech100®

Posted on by Natalie Ambrosio

Moody’s Analytics received the Chartis RiskTech100® Climate Risk Award, highlighting its commitment to integrating climate risk analytics into its world-class credit models. As part of Moody’s ESG Solutions, Four Twenty Seven works closely with Moody’s Analytics, bringing data on granular, forward-looking physical climate risk exposure. Read the press release from Moody’s Analytics:

SAN FRANCISCO, November 23, 2020 – Moody’s Analytics has won the Climate Risk category in the 2021 Chartis RiskTech100®, the first year this category has appeared. It’s one of 10 awards for Moody’s Analytics to go along with the #2 overall ranking.

The Moody’s Analytics offering helps customers first identify whether they have exposure to climate risk in their portfolios and then quantify the impact of exposure to various climate risk factors.

“Expanding our climate risk capabilities is a top priority and one we have invested significantly in achieving,” said Dr. Jing Zhang, Managing Director and Global Head of Quantitative Research at Moody’s Analytics. “Severe climate events throughout 2020 underscore the importance and urgency for market participants to understand how climate change is already affecting—and will continue to affect—the risk and return of their portfolios.”

Measuring the physical risks associated with climate change is one piece of the climate risk management puzzle. Award-winning climate risk analytics from Moody’s ESG Solutions, powered by Moody’s affiliate Four Twenty Seven, a leading provider of physical climate risk data and V.E, a Moody’s affiliate with expertise in transition risk, ESG, and corporate disclosures, are being incorporated across Moody’s Analytics solutions. Moody’s climate solutions suite brings climate data into risk management tools, translating climate risk exposure into financial impact and credit risk across asset classes.

Our team recently conducted an AI-powered study of climate-related disclosures from roughly 12,000 companies, across industries and regions. Among the findings, which were presented to the Task Force on Climate-Related Financial Disclosures (TCFD) and are highlighted in the most recent status report on TCFD implementation: Only 17% of the companies examined had reported any climate-related information, and with significant variation in focus, content, and quality.

Capabilities from Moody’s ESG Solutions are also increasingly being leveraged by Moody’s Investors Service (the credit rating agency and sister company of Moody’s Analytics).

Moody’s ESG Solutions Group Appoints Global Head of Climate Solutions

Posted on by 427-admin

Moody’s appoints Four Twenty Seven Founder & CEO, Emilie Mazzacurati, as Global Head of Moody’s Climate Solutions, with Moody’s ESG Solutions Group. Read the press release from Moody’s:

LONDON- (BUSINESS WIRE) – Moody’s announced today that it has appointed Emilie Mazzacurati as Global Head of Moody’s Climate Solutions. In this newly-established role, Ms. Mazzacurati will oversee the climate solutions suite within Moody’s ESG Solutions Group, a new business unit formed earlier this year to serve the growing global demand for ESG and climate analytics. Ms. Mazzacurati will report to Andrea Blackman, Global Head of Moody’s ESG Solutions. 

“As global awareness and recognition of the financial risks posed by climate change increase, Moody’s is committed to meeting market needs for forward-looking, science-driven climate analytics that help advance a resilient financial system, responsible capitalism, and the greening of the economy,” said Ms. Blackman. “Emilie’s extensive climate expertise will be vital to our continued development of climate solutions and to ensuring that Moody’s is a leading voice in this important area.” 

As part of its climate solutions suite, Moody’s ESG Solutions provides risk measurement and evaluation tools to understand, quantify and manage climate risks for physical and transition risk, informing due diligence and risk disclosure in line with the recommendations from the Taskforce on Climate-related Financial Disclosures (TCFD).  

Climate risk analytics from Moody’s ESG Solutions are also integrated into Moody’s Analytics risk management tools, translating climate risk exposure into financial impact and credit risk metrics for banks, insurers, and investors. Similarly, the group’s climate data and insights are increasingly being leveraged in Moody’s Investors Service credit analysis. By offering data and analytics across asset classes, including listed and unlisted companies, real estate, infrastructure, sovereigns and municipalities, Moody’s ESG Solutions supports the integration of climate-related risks into financial decision-making and risk management. 

Moody’s ESG Solutions climate offerings build on the award-winning physical climate risk analytics from Four Twenty Seven, a leading provider of climate risk data and market intelligence, founded by Ms. Mazzacurati in 2012. Moody’s acquired a majority stake in Four Twenty Seven in 2019 and recently took full ownership. Moody’s climate solutions suite also leverages data from V.E, a Moody’s affiliate with expertise in transition risk, ESG, and corporate disclosures. 

ABOUT MOODY’S ESG SOLUTIONS 

Moody’s ESG Solutions Group is a business unit of Moody’s Corporation serving the growing global demand for ESG and climate insights. The group leverages Moody’s data and expertise across ESG, climate risk, and sustainable finance, and aligns with Moody’s Investors Service (MIS) and Moody’s Analytics (MA) to deliver a comprehensive, integrated suite of ESG and climate risk solutions including ESG scores, analytics, Sustainability Ratings and Sustainable Finance Reviewer/certifier services. 

For more information visit Moody’s ESG & Climate Risk hub at www.moodys.com/esg 

Panel Recording: Taming the Green Swan

Posted on by Emilie Mazzacurati

In this keynote presentation during Risk Australia Virtual 2020, Founder & CEO, Emilie Mazzacurati, discusses “Taming the Green Swan: Incorporating Climate Risk into Risk Management.” She covers changes in the regulatory environment and how investors can use science to inform risk management and investment decisions. Emilie discusses progress made on climate risk disclosure to date, explains the latest thinking on conducting scenario analysis for climate risks and provides case studies of the economic impacts of climate risk in Asia and Australia.

Moody’s: Climate Risk and Resilience at US Airports

Posted on by Jeremiah Kim

Climate change will expose the airport sector to increased physical climate risks within the next two decades. In its report, US airports face growing climate risks, but business model and resiliency investments mitigate impact, Moody’s Investors Service leverages Four Twenty Seven’s physical climate risk data to explore potential damages from increased exposure of US airports to floods, heat stress, hurricanes, sea level rise and wildfires.

The report found that in 2004-2019, an average 37% of delayed flights annually resulted from climate-related extreme weather events. Airports along coastlines or rivers face particular risks as floods can damage crucial structures such as runways and terminals leading to significant costs or rendering the assets unusable. Likewise hurricanes can cause widespread damage including economic impacts on broader regions. Heat stress and wildfire smoke can both present challenges for planes taking off or landing, leading to delayed or canceled flights or adjusted cargo loads.

Airports often undertake long-term capital intensive projects and integrating resilience measures into planning these investments will be critical. Liquidity will also help absorb the effect of disruptive climate-related events.

Moody’s subscribers can read the full report here.

———————-

To learn more about Four Twenty Seven’s climate risk data, check out our solutions for investors, banks and corporations or read our report on.

Panel Recording: RCLCO Webinar on Climate Risk and Real Estate Investing

Posted on by 427-admin

This RCLCO Real Estate Advisor webinar focuses on integrating climate risk analytics into decision-making for real estate investors and opportunities to leverage this information to build resilience.

Speakers

  • Stephen Bishop, Senior Associate of RCLCO Real Estate Advisors, discusses the impacts of physical and transition climate risks on real estate.
  • Emilie Mazzacurati, Founder & CEO of Four Twenty Seven, presents on opportunities to leverage climate data to inform an understanding of climate risk in real estate portfolios.
  • Cyndi Thomas, Managing Director of RCLCO Real Estate Advisors, shares RCLCO’s  framework for integrating climate risk mitigation practices.
  • Moderator: Joshua A. Boren, Director, Business Development at RCLCO Real Estate Advisors

Newsletter: Wildfires, Storms and Their Impacts on Credit Risk

Posted on by 427-admin

Four Twenty Seven's monthly newsletter highlights recent developments in climate risk and resilience. This month we discuss the costs of climate hazards, share updates on Moody's ESG and highlight recent developments in climate risk regulation.
In Focus: The Current Reality of the
Climate Crisis

Devastating Human & Economic Costs of Wildfires
As cities on the West Coast take turns with the worst air quality in the world, and cope with evacuations and loss of life and property from record-breaking wildfires, there is increasing evidence about the longer-term implications of these devastating events. After several years of catastrophic fires in California, exacerbated by hot and dry conditions driven by climate change, homes in exposed areas are likely to decline in value, which in turn can increase mortgage default rate, with severe market implications.

Likewise, as the COVID-19 pandemic limits firefighting resources and makes evacuations particularly challenging, new research continues to emerge about the devastating health impacts of wildfire smoke. For example, "Researchers from the University of Tasmania identified 417 extra deaths that occurred during 19 weeks of smoky air, and reported 3,100 more hospital admissions for respiratory and cardiac ailments and 1,300 extra emergency room visits for asthma" during Australia's bushfires last year.

This is not just a current concern in the U.S., but rather wildfire potential is increasing  globally, and regions such as Brazil and Portugal are also enduring fires. Four Twenty Seven's recent analysis on global wildfire potential assesses how conditions will become more conducive to wildfires in regions around the world.
Read Wildfire Analysis

Dire Records Foreshadow Worsening Extremes
As wildfires ravage the west, Hurricane Sally began to hit southeastern Mississippi and the western Florida Panhandle on Tuesday. The slow-moving storm is expected to continue to drop rain and lead to heavy wind as it moves to shore on Wednesday. This is the 18th named storm of the Atlantic hurricane season and the earliest S-named storm on record. Several more hurricanes have already formed in the Atlantic and these back-to-back storms present significant challenges; diminishing the window for search and rescue, increasing the duration of flooding and power outages and exacerbating COVID-19 challenges. Sea level rise driven by climate change worsens storm surge risk during hurricanes and warmer oceans can fuel stronger storms.

This comes as this year's first seven months were the second hottest on record and in the Northern Hemisphere July was the hottest on record, beating the previous record set just last year. This is increasingly evident in the Arctic, where satellite imagery shows that the region's largest remaining ice shelf lost a 110 square km portion and where Bering Sea ice was at a record low during 2018 and 2019. This affects ecosystems and Indigenous communities and contributes to feedback loops of warming in the region when reflective ice is replaced by dark water. Meanwhile, in Antarctica two glaciers that are already contributing to around 5% of global sea level rise were recently found to be less stable than previously understood.

Global Ports Exposed to Floods, Sea Level Rise
Sea ports handle 80% of global goods, so disruptions have significant wide-reaching consequences. This recent Economist article leverages Four Twenty Seven's data to explore risk exposure of about 340 of the world's largest ports. The analysis found that 55% of global trade goes through ports that are highly exposed to at least one hazard, such as floods, sea level rise, storms and wildfires and that 8% of trade passes through ports highly exposed to at least three hazards. This points to a need for risk assessment and resilience investment at ports, which requires capacity-building for port managers and an increase in adaptation finance.
Four Twenty Seven at Moody's:
Integration in Research and Ratings

Moody's Launches Comprehensive ESG Solutions Group
This week Moody’s Corporation announced the formation of an Environmental, Social, and Governance (ESG) Solutions Group to serve the growing global demand for ESG insights. The group leverages Moody’s data and expertise across ESG, climate risk, and sustainable finance, and aligns with Moody's Investors Service and Moody's Analytics to deliver a comprehensive, integrated suite of ESG customer solutions.

The ESG Solutions Group includes Four Twenty Seven and Vigeo Eiris, a global pioneer in ESG assessments, data and tools, and sustainable finance. Together, Moody's and its affiliates develop tools and analytics that identify, quantify and report on the impact of ESG and climate-related risks and opportunities. ESG and climate risk considerations are already integrated into credit ratings and research offered by Moody’s Investors Service (see below), and will be integrated into a range of Moody’s Analytics risk management solutions, research, data and analytics platforms, including stress testing solutions and climate-adjusted credit risk analytics for corporates, sovereigns and real estate.

Moody's Investors Service Announces Inclusion of Four Twenty Seven's Climate Risk Data in US CMBS and CRE CLOs

Reflecting the growing materiality of climate events for real estate, Moody's Investors Service now considers climate risk data and analytics from Four Twenty Seven in its research and ratings process for US commercial mortgage-backed securities (CMBS) and commercial real estate collateralized loan obligations (CRE CLOs). Presale reports include physical climate risk tables for the properties backing the loans in CMBS and CRE CLO transactions, including their forward-looking risk to floods, heat stress, hurricanes & typhoons, sea level rise, water stress and wildfires. 

Moody’s: U.S. Nuclear Operators Exposed to Physical Climate Risks
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 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.
Developments in Climate Risk
Regulation & Assessment

U.S. CFTC Releases Report on Climate Risk
Last week the U.S. Commodity Futures Trading Commission released a report highlighting the economic risks of climate change and emphasizing the need for the financial system to address these risks. The first such report to be issued by a U.S. government entity, it covers both physical and transition climate risks and calls for a nationwide price on carbon. However, this comes two weeks after the U.S. Securities and Exchange Commission released updated disclosure requirements that don't include climate change.

UK Releases Consultation on Mandating TCFD Disclosure
The UK's Department for Work and Pensions released a public consultation on a proposal to mandate climate risk disclosure. The policy would require pension funds of at least £5 billion to assess and disclosure their climate risks and opportunities under several scenarios by October 2021 and would also apply to funds of at least £1 billion in 2022. Respond by October 7th.
Meanwhile, yesterday, New Zealand announced that it would mandate TCFD disclosure on a comply or explain basis by 2023.

Charting a New Climate: UNEP FI TCFD Banking Pilot Phase II Report
Last week the UNEP Finance Initiative released a report outlining phase II of its pilot project working with global banks to understand their approaches to assessing physical climate risks and opportunities and the tools and data that could best support these processes. It discusses climate risk vulnerability by sector, includes an exploration between the connection between loan performance and climate risk exposure and reviews several data providers, including Four Twenty Seven and our ongoing collaborations with Moody's Analytics.
Moody's ESG Summit: Climate Scenarios

Join Us During Climate Week NYC for a Half Day on Climate Risk
Hear from industry leaders on the latest market developments in climate change and discover new approaches to leveraging climate data and financial indicators to understand how physical and transition risks translate into credit risks. The session will include keynote presentations by Nick Anderson of IASM, Jane Ambachtsheer of BNP Paribas Asset Management and Sean Kidney of the Climate Bonds Initiative. The latter session will feature experts from Moody's, Four Twenty Seven and Vigeo Eiris, discussing new approaches to modeling climate risk and its financial impacts.

This event is hosted by Moody's in partnership with the Climate Bonds Initiative during Climate Week New York City. The session is on September 24th beginning at 9:15am EST.
Register for Free

Moody's Analytics' Launches ESG Risk Assessment Courses
Moody's Analytics' upcoming courses on ESG risk assessment include introductions to climate, environmental and social risks and their connection to credit analysis and portfolio management. These virtual, instructor-led courses will include case studies and discussions on how to assess and manage ESG risks. Topics include ESG KPIs, the Sustainable Development Goals, CO2 scope, climate risk analysis, proxy voting, climate risk disclosure and upcoming regulation.

Choose from three upcoming sessions, with options for time zones in the U.S., Europe and the Asia-Pacific regions and review the full course outline.
Inside the Office at Four Twenty Seven

Director, Sales - Jackie Willis
Four Twenty Seven welcomes Jackie Willis as Director, Sales in New York. Jackie leads Four Twenty Seven’s business development and growth strategy in the eastern United States. Jackie has spent the majority of her career in analytical and portfolio management roles in corporate and municipal finance, in the securities and banking industries at institutions such as Prudential Capital Management, TIAA-CREF, TD and Wachovia (now Wells Fargo). Most recently, she served as a Solution Specialist covering the commercial and industrial (C&I) and commercial real estate (CRE) credit risk models for Moody’s Analytics.

Join the team! 

Find open positions on our Careers page and visit Vigeo Eiris' and Moody's Careers pages for more opportunities in climate change and ESG.
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