Goldman Sachs is leveraging Moody’s ESG Solutions data on sovereign physical climate risk, powered by Four Twenty Seven, to inform its fixed income strategy. Read the press release from Moody’s:
LONDON – (BUSINESS WIRE) – Moody’s ESG Solutions Group announced today that Goldman Sachs Asset Management (Goldman Sachs) has selected Sovereign Climate Risk Scores powered by Moody’s affiliate Four Twenty Seven 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.
As the impact of climate factors such as higher temperatures, drought, rising sea levels, and more extreme weather events are expected to increase over time, 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.”
The Sovereign Climate Risk Scores launched in December and are the only known dataset matching physical climate risk exposure to population location, GDP (Purchasing Power Parity) and agricultural areas within countries, with detailed metrics including both percent exposed and total amount exposed to each climate hazard. Understanding multiple dimensions of sovereigns’ exposure to floods, heat stress, hurricanes & typhoons, sea level rise, water stress and wildfires informs targeted risk management strategies.
“Understanding exposure to physical climate hazards is critical for investors and credit institutions in order to price climate risk, and also to help direct finance flows towards adaptation and resilience where they’re most needed,” says Emilie Mazzacurati, Global Head of Moody’s Climate Solutions in Moody’s ESG Solutions Group. “We’re extremely pleased that Goldman Sachs has chosen to use our new dataset to enhance its ESG evaluation of sovereign risk.”
Read our report, Measuring What Matters: A New Approach to Assessing Sovereign Climate Risk to learn more about Four Twenty Seven’s physical climate risk data for sovereigns.
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:
“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.
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:
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.”
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:
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.
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.
December 3, 2020 – Four Twenty Seven Report. More frequent and severe extreme events driven by climate change pose a significant threat to nations around the world and understanding who and what is exposed to climate hazards is essential to pricing this risk and preparing for its impacts. This new report and underlying analytics assess 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.
Globally, increasingly severe climate conditions impose growing pressure on populations and economies. The implications on economic growth, welfare, production, labor, and productivity are large, with potential material impacts on sovereign credit risk. However, assessing sovereign climate risk presents significant challenges. While most approaches to quantifying future climate risk exposure for sovereigns measure the average exposure over the entire territory of a country, this doesn’t capture whether the populated or economically productive areas are exposed to extremes. Likewise, averages of exposures to several climate hazards can mask extreme exposure to a particular hazard in a certain area of a country.
We’ve mapped the co-occurrence of hazards and exposures, explicitly factoring in the spatial heterogeneity of both climate hazards and people and economic activities across a country. This new report, Measuring What Matters – A New Approach to Assessing Sovereign Climate Risk, provides an analysis of the data. We find that all nations face meaningful risks despite their variation in size and resources. Explore sovereign climate risk in the interactive map below, based on both total and percent of a nation’s population, GDP (PPP) and agricultural areas exposed to climate hazards in 2040.
*Erratum: In Table 1 of a previous version of this report the “Agriculture Area at High Risk” column was said to be in units of 1 billion hectares. However, it is in units of 100 million hectares.
How are banks, investors and financial regulators addressing climate risk? Founder & CEO, Emilie Mazzacurati, joins Molly Wood in the Marketplace Tech podcast series, “How We Survive,” to discuss climate risk assessment and risk mitigation. The conversation covers regulatory developments, increased transparency on climate risks, resilience investment and the impact of COVID-19 on climate change conversations.