Real Assets Screening Archives

Newsletter: Climate Commitments

Posted on April 28, 2021May 3, 2021 by Natalie Ambrosio

Four Twenty Seven, an affiliate of Moody's, sends a monthly newsletter highlighting recent developments in climate risk and resilience.

In Focus: Climate Commitments

Climate Summit Commitments

The leaders of 40 nations and key private sector participants who joined Biden's Climate Summit last week, made new emissions reductions targets or recommitted to existing promises. T he US, Canada, Brazil, Japan and other countries made ambitious new commitments. While change comes when commitments are followed by tangible action, these have the potential to accelerate the transition to a low-carbon economy, with implications for businesses and investors, including significant opportunities.

Financial Sector Action on Climate Change

Meanwhile, financial regulators around the world continue to issue guidance and expectations around climate risk. Last week the EU published the climate adaptation and mitigation portion of its Sustainable Finance Taxonomy and investors will be expected to disclose in line with the taxonomy starting next year. The EU also published a draft legislative proposal for a Corporate Sustainability Reporting Directive, which would replace the Non-Financial Reporting Directive and greatly expand the number of companies mandated to report on a range of environmental factors, including climate. New Zealand is considering passing a bill that would mandate climate risk disclosure for banks, insurers and investors by 2023. The Australian Prudential Regulation Authority issued a public consultation on its draft guidance for financial institutions to manage the risks of climate change.

Mark Carney, UN Special Envoy on Climate Action and Finance, announced the Glasgow Financial Alliance for Net Zero (GFANZ) last week, bringing together several industry-led net zero initiatives focused on supporting the transition to net zero emissions by 2050. Participating groups include the new Net Zero Banking Alliance, the Net Zero Asset Managers Initiative and the Net Zero Asset Owner Alliance. The Net Zero Insurance Alliance is expected to launch soon and will also join GFANZ. There are over 160 participating firms, which commit to science-based targets, addressing all emission scopes, issuing transparent disclosures and setting 2030 interim targets.

The American Jobs Plan

Biden's $2 trillion infrastructure proposal places climate change and environmental justice in the center. The plan's wide-ranging elements include funding to grow the electric vehicle market in the US and to improve the nation's aging water and electricity infrastructure. There are provisions for affordable housing and a distinct focus on jobs training to support a just transition to a low-carbon economy. The plan aims to remove fossil fuel subsidies and mandate that the companies help pay to cleanup toxic sites. As crumbling infrastructure and polluting facilities are often in low-income communities and communities of color, these items would contribute to fostering environmental justice. Likewise, the plan allocates funding specifically to communities of color and frontline communities, and includes provisions to increase wages for in-home care workers who are often women of color, and for broadband internet development which is particularly needed in Black and Latino communities.

Moody's Analytics assessed the macroeconomic implications of the plan, saying it "provides a meaningful boost to the nation's long-term economic growth."

Banks and Climate Stress Tests

Moody's Webinar - Climate Stress Tests: What You Need to Know

As numbers of regulators begin to roll out climate stress tests and climate risks continue to grow, understanding how to undertake informative climate stress tests is becoming increasingly essential. Join us for a live, interactive panel discussion on climate scenarios and stress testing on Thursday May 6, at 3pm BST / 10am ET / 7am PT.

Key Discussion Points:

How are central banks incorporating climate stress testing into financial supervisory requirements?
What are the different types of scenarios needed for assessing climate risk?
What are the key building blocks for climate stress testing? How do they fit together?

Speakers:

Carmelo Salleo, Head of Division, Stress Test Modelling Division, European Central Bank
Emilie Mazzacurati, Global Head of Moody's Climate Solutions, Moody's ESG Solutions
Burcu Guner, Senior Director-Risk & Finance SME, Moody's Analytics
Rahul Ghosh, Managing Director-Outreach & Research, Moody's ESG Solutions (moderator)

Moody's Investors Service: Climate Risk for Banks

Moody's Investors Service report, Climate change to force further business model transformation for banks, outlines ways in which carbon transition and physical climate risk will influence banks' risk assessment requirements and present new costs and credits risks for banks. The analysis covers the forthcoming stress testing requirements, discussing their credit implications.

BIS Resources on Climate Risk for Banks

The Bank for International Settlements released two reports on climate risk, focusing on transmission channels of climate risk to banks and methodologies to measure climate-related financial risks. The report on transmission channels finds that climate risks affects banks through the traditional financial risk categories including market risk, liquidity risk and

operational risk. It underscores the ways in which the impacts of climate risk depend on geography, sector and the economic and financial system and emphasizes the need for more research on how climate risk translates into different types of financial risk.

The report on measurement tools underscore the needs for granular, forward-looking data on climate-related financial risks, which includes new climate data tools in addition to improved information on counterparty locations. It discusses the early emphasis on risk assessment for near-term transition risk and the need to expand assessments and scenario analysis to include a range of physical climate hazards. The report highlights the increased research focus on translating climate risks into traditional financial risk metrics, noting that much progress to date has focused on credit risk, with market and liquidity risk at even earlier stages.

Real Assets Exposed to Physical Climate Risk

Moody's Investors Service Adds Climate Data to RMBS Presale Reports

Moody's Investors Service presale and new issues reports for residential mortgage backed securitizations rated out of the US or Europe, now include Four Twenty Seven's physical climate risk scores as an appendix. "While these climate risk scores are not specifically incorporated in our ratings analysis, we believe these additional disclosures will be of great value to market participants," says London-based Moody's Investors Service Senior Vice President Anthony Parry in the press release.

Moody's Investors Service: Climate Hazards Threaten US Seaports

This Moody's Investors Service analysis, Intensifying climate events risk disruptions to seaport operations across the US, leverages Four Twenty Seven's physical climate risk data to assess the exposure of ports to climate hazards including floods, heat stress, hurricanes, sea level rise, water stress and wildfires. It highlights that landlord ports typically have more fixed revenues than port operators, which can reduce the short-term impacts of extreme events. In addition to significant exposure to storms and flooding, West Coast ports often face risks from wildfires, with implications for supply chains and transportation infrastructure. Similarly, while less damaging for the ports themselves, heat stress and water stress can affect agriculture exports, in turn affecting a port's business. Register for free to read the analysis.

Increasing Global Wildfire Potential

Four Twenty Seven's Peer-Reviewed Research on Wildfire Potential Under Climate Change

2020 was a devastating wildfire year and this year is gearing up to just as hot and dry in many regions. This is a global trend exacerbated by climate change. Four Twenty Seven's article, A global assessment of wildfire potential under climate change utilizing Keetch-Byram drought index and land cover classifications, published in Environmental Research Communications, explores the effects of climate change on global wildfire potential. It shows that by 2040, regions like the American West, Australia and the Amazon will be drier and hotter for much longer than historical averages, experiencing more than 60 additional days of high wildfire potential per year.

This article provides the detailed methodology behind Four Twenty Seven's publication, Climate Change and Wildfires: Projecting Future Wildfire Potential, which discusses key findings including regional trends and hotspots.

Current Drought & Wildfire Potential in the Western US

Drought contributes to conditions that are conducive to wildfires and also presents significant health and economic risks. In California, farmers are questioning the viability of their businesses and many families are facing depleted and contaminated wells. The snowpack in the Sierra Nevada is at 28% of normal, dry conditions are expected to persist through June and the summer is expected to have higher than average temperatures. This all suggests that a dangerous fire season is on the horizon. As the state continues to face these costly climate-driven events, California launched a Climate-Related Risk Disclosure Advisory Group earlier this month, to support the development of a climate risk disclosure standard.

Other Western states are also enduring damaging droughts, with North and South Dakota entirely in drought conditions and parts of Texas, Iowa and Colorado all experiencing drought impacts. Last week the White House launched an Interagency Working Group to focus on addressing the drought conditions in the West and their dire implications for farmers, Tribes and other communities.

Upcoming Events

Join the team online at these upcoming events and check our Events page for updates:

May 6 – Moody's Webinar on Climate Stress Tests: What You Need to Know: Founder & CEO and Global Head of Moody's Climate Solutions, Emilie Mazzacurati, will present on the drivers behind emerging stress testing requirements. See more details above.
May 25 – Moody's Investors Service Emerging Markets Summit 2021: Associate Director, Research, John Naviaux, will present on sovereign physical climate risk.
Jun 2-4 – Green Swan 2021: Emilie Mazzacurati will present during the session on climate-related risks data and accounting. Invitation only.
Jun 22 – Ideas + Action 2021: Sustainability and Resilience: Emilie Mazzacurati will present on the economic implications of climate risk.
Jul 23 – Environmental Business Council of New England Annual Climate Summit: Director, Global Client Services, Lindsay Ross, will present on physical climate risks.
Sept 22 – 2 021 CARE Sustainability Conference: Director, Communications, Natalie Ambrosio Preudhomme will present on financial climate risk analytics during the panel "Implementation Issues."

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Newsletter: ECB Releases Stress Test Findings

Posted on March 25, 2021 by Natalie Ambrosio

Four Twenty Seven, an affiliate of Moody's, sends a monthly newsletter highlighting recent developments in climate risk and resilience.

In Focus: European Central Bank
Climate Stress Tests

The European Central Bank (ECB) Releases Preliminary Climate Stress Test Results, Leveraging Four Twenty Seven Data

Last week the ECB released preliminary results of its climate stress tests, covering about 4 million companies globally and 2,000 banks, which make up nearly all monetary finance institutions in the EU. The assessment looked ahead 30 years, covering physical and transition risk exposure of EU banks' counterparties. The physical risk assessment is based on Four Twenty Seven's data, and results show that without climate policy, physical risks increase significantly and in turn increase firms' probability of default. "The short-term costs of the transition pale in comparison to the costs of unfettered climate change in the medium to long term," writes ECB Vice President Luis de Guindos. The ECB will continue exploring the results over the course of this year, which will also inform the supervisory climate stress-tests of individual banks in 2022.

The Financial Times highlights the key findings of the ECB piece, sharing an animated physical risk graphic in this article.

Moody's Analytics on Banks' Climate Risk Assessment and Disclosure
As the ECB lays the groundwork for climate stress tests of individual banks, stress testing and disclosure requirements are picking up globally. In the recent analysis, "How US Banks Are Addressing Climate Risk and Sustainability," Moody's Analytics discusses progress made to date in banks approaches to climate risk, comparing banks' actions in the US and to progress in the rest of the world. The piece also highlights opportunities to take action ahead of mandated disclosure requirements, with potential first steps including benchmarking and conducting portfolio climate risk evaluations and ESG assessments.

Goldman Sachs Leverages Sovereign Physical Climate Risk Data

Four Twenty Seven's Physical Climate Risk Data Will Inform Goldman Sachs' Fixed Income Strategies

Moody’s ESG Solutions Group announced last week that Goldman Sachs Asset Management (Goldman Sachs) has selected Four Twenty Seven's Sovereign Climate Risk Scores for use in its ESG evaluation of sovereign risk. The dataset provides a detailed view of the future exposure of the global population, the economy, and agriculture to a range of physical climate hazards.

Goldman Sachs will use the dataset as an input to its own proprietary Sovereign ESG framework. This assessment of climate risk exposure will be combined with qualitative analysis by Goldman Sachs’ investment teams on countries’ capacities to adapt to physical risks.

“Sovereign bonds are an integral part of our fixed income portfolios, but intrinsic uncertainties make it challenging to quantify the long-term impact of climate change on countries,” said Prakriti Sofat, Executive Director at Goldman Sachs Asset Management. “Using this dataset will help us assess this evolving risk and reflect it in our investment decisions.”

Public Consultations on Climate Risk

SEC Questionnaire on Climate Risk Disclosure

Last week Acting Chair of the US Securities and Exchange Commission (SEC), Allison Herren Lee, announced that she's asking staff to evaluate the SEC's climate disclosure guidelines, considering industry feedback. The statement included a detailed questionnaire on climate risk disclosure, open for public comment for 90 days from March 15. Relatedly, last week the Commodity Future Trading Commission announced a new Climate Risk Unit.

FHFA Request for Information on Climate Risk

The US Federal Housing Finance Agency (FHFA) opened a request for information on climate and natural disaster risk in the housing finance system, including to the regulated entities: Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The FHFA will use the information to explore opportunities to strengthen supervision of the regulated entities' climate risk disclosure and management. Respond by April 19.

OSFI Discussion Paper on Preparing for Climate Risk

The Canada Office of the Superintendent of Financial Institutions (OSFI) released a discussion paper about how federally regulated financial institutions and federally regulated pension plans address the risks of climate change and how OSFI can support these entities' preparedness for these risks. The paper includes 16 consultation questions and is open for public response until April 12.

Four Twenty Seven Partners with Lockton

Lockton Brings Physical Climate Risk Data to its Clients

Four Twenty Seven is pleased to announce a partnership with Lockton, a global independent insurance broker. This partnership will allow Lockton to bring science-driven physical climate data to its broad client base, enabling forward-looking decision-making.

To hear more about climate risk for construction, real estate and insurance, join us tomorrow for Lockton's webinar on Climate Matters: Risk, Resilience and Response at 4pm GMT / 12pm EDT / 9am PDT.

Upcoming Events

Join the team online at these upcoming events and check our Events page for updates:

Mar. 22-25 – Ceres 2021: Four Twenty Seven Founder & CEO and Global Head of Moody's Climate Solutions, Emilie Mazzacurati, will speak on the panel "The New Materiality of Climate Science and What it Means for Investors and Companies."
Mar. 25 – Climate Matters: Risk, Resilience and Response: Director, Communications, Natalie Ambrosio Preudhomme, will present on physical climate risk for real estate during this webinar.
Mar. 21 - Apr. 1 – Greenlight Climate Festival: Find Your Calling in Sustainability: Director, Global Client Services, Lindsay Ross, will speak on the "Climate Finance" panel.
Apr. 8 – Moody's Career Insights: Emilie Mazzacurati will speak about the field of climate analytics at this networking event for professionals interested in developing fields such as ESG, climate change and commercial real estate.
Apr. 13-14 – GreenFin: Emilie Mazzacurati will present.
Apr. 14-16 – The Eurofi High Level Seminar: Emilie Mazzacurati will present on the panel "Climate Risk Implications for the EU Financial Sector."
Apr. 22 – Villanova Rooted in Sustainability Webinar - ESG & Climate: What Investors Want: Natalie Ambrosio Preudhomme will present on climate risk.
Apr. 26-30 – 2021 Virtual Wall Street Green Summit: Emilie Mazzacurati will speak on the panel "ESG Data Reporting and Software Solutions."
Sept 22 – 2 021 CARE Sustainability Conference: Natalie Ambrosio Preudhomme will present on financial climate risk analytics during the panel "Implementation Issues."

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Moody’s Launches Comprehensive Suite of Climate Solutions

Posted on March 10, 2021 by Natalie Ambrosio

Moody’s launches its new Climate Solutions Suite incorporating physical and transition climate risk data into Moody’s best-in-class risk management solutions and economic models. Read the press release from Moodys:

LONDON- (BUSINESS WIRE) – Moody’s ESG Solutions Group today announced the launch of Climate Solutions, a comprehensive product suite that provides market participants with enhanced risk measurement and evaluation tools to better understand, quantify and manage climate risks and opportunities. Climate Solutions incorporates physical and transition risk into Moody’s best-in-class risk management solutions and economic models to enable banks, insurers and investors to better assess climate risks and comply with the emerging regulatory requirements for stress testing and disclosures.

“Climate change has a profound impact on the world’s economies and societies,” said Mark Kaye, Chief Financial Officer and Executive Sponsor of Moody’s ESG Solutions Group. “Moody’s is committed to offering science-driven, objective analytics to advance strategic resilience and to help market participants navigate the transformation to a low-carbon, climate-resilient future.”

Powered by Moody’s affiliates Four Twenty Seven, a leader in climate risk data, and V.E, a leading global provider of ESG research, data and assessments, Moody’s Climate Solutions includes:

Forward-looking, physical and transition climate risk assessments for over 5,000 listed companies and more than 10 million real estate properties; dynamic, on-demand scoring for listed and unlisted companies, and SME support in risk identification, reporting and screening are also available;
Climate-adjusted Probability of Default (PD) for listed and unlisted companies that leverage Moody’s Analytics award-winning Expected Default Frequency (EDF^TM) model to provide consistent, transparent and customizable analysis of the credit impact for physical and transition risk;
Macroeconomic Climate Risk Scenarios, based on Moody’s Analytics Global Macroeconomic Model and the Network for Greening the Financial System’s representative designations, for assessing physical and transition changes, including an 80-year forecast horizon to support stress testing and risk management needs;
Climate Pathway Scenarios to help power insurers’ and pension funds’ asset and liability projections with climate-aligned scenarios to facilitate customers’ efforts to align with Own Risk and Solvency Assessment (ORSA) and Task Force on Climate-related Financial Disclosures (TCFD) reporting practices; and
Powerful, but easy to use TCFD reporting solutions and analytics for banks, pension funds and insurance companies.

“Combining advanced climate know-how with proven models for credit risk and economic forecasts has enabled us to create a sophisticated set of climate risk analytics to support the systematic integration of climate change into investment and risk management decisions,” said Emilie Mazzacurati, Global Head of Moody’s Climate Solutions. “Our solutions support growing market needs for robust modelling of climate risks and their financial impacts.”

To learn more, visit Moody’s Climate Solutions.

Four Twenty Seven Announces Partnership With Lockton

Posted on March 8, 2021March 9, 2021 by Natalie Ambrosio

March 8, 2021 – BERKELEY, CA – Four Twenty Seven’s data is now available through Lockton, a global independent insurance broker.

As part of a long-term commitment to protect clients as the effects of climate change take their toll, Lockton works with insurers to develop and deliver innovative insurance products, designed to meet the needs of the future. Lockton’s broker partnership with Four Twenty Seven enables clients to make decisions based on climate science. The service provides data and analytics required to build resilience and mitigate the risks of climate change.

The partnership will benefit many of Lockton’s clients:

Real estate investors can evaluate the long-term risk exposure of portfolio holdings and engage with asset operators to improve resilience and bolster risk management capabilities
Property and asset managers can enhance portfolio analysis and monitor risk as investment appetite can change over time. They will also be able to screen assets for their exposure to climate hazards pre-acquisition
Banks can identify the climate-related risks in commercial and residential mortgage portfolios, incorporating these risks into their loan acquisition appraisals

Steve Rust, Global Real Estate and Construction Partner at Lockton, commented: “Right now, it’s more important than ever for the real estate and construction sectors to better prepare themselves for the great risk that climate change holds globally. By harnessing the power of data, especially in relation to locations, Four Twenty Seven can help us additionally support clients with invaluable awareness of long-term climate risks, allowing them to make better informed decisions, and plan a strategy for the future. This is an exciting opportunity and we look forward to building a productive, forward-thinking partnership.”

Emilie Mazzacurati, Global Head of Moody’s Climate Solutions and Founder & CEO of Four Twenty Seven, commented: “Understanding an asset’s exposure to hazards such as floods, storms and wildfires is critical to risk management processes, including decisions around insurance and asset-level resilience investments. We’re delighted to partner with Lockton to help a broader range of stakeholders access forward-looking information on their climate risk exposure.”

Read Lockton’s announcement.

Newsletter: The US prioritizes climate change

Posted on January 28, 2021February 3, 2021 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

Upcoming Events

Join the team online at these upcoming events and check our Events page for updates:

Feb. 10 – Stanford Climate Business and Innovation Summit: Global Head of Moody's Climate Solutions and Founder & CEO of Four Twenty Seven, Emilie Mazzacurati, will present.
Mar. 10 – Environmental Social Justice Webcas t: Director, Communications, Natalie Ambrosio Preudhomme, will speak.
Mar. 22-25 – Ceres 2021: Emilie Mazzacurati will speak.
Apr. 1 – 2 021 CARE Sustainability Conference: Natalie Ambrosio Preudhomme will present.

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

Posted on January 28, 2021February 3, 2021 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 January 19, 2021January 25, 2021 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 November 24, 2020December 3, 2020 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, T he 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

Upcoming Events

Join the team online at these upcoming events and check our Events page for updates:

Dec 1 – China SIF Conference: Founder & CEO, Emilie Mazzacurati, will speak.
Dec. 2-3 – RI Digital: USA 2020: Emilie Mazzacurati, will present.
Dec 2 – ULI 2020 Virtual Resilience Summit: Managing Director, Global Client Services, Yoon Kim, and Director, Communications, Natalie Ambrosio Preudhomme, will join.
Dec. 10 – How Real Estate Can Adapt and Prepare for Climate Risks: Yoon Kim, will present.

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

Posted on November 23, 2020November 23, 2020 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 November 19, 2020November 19, 2020 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