As you may already be aware, Four Twenty Seven was acquired by Moody’s Corporation in
2019 and officially became a part of Moody’s ESG Solutions Group in 2020.
Over the coming weeks, we will begin to retire the Four Twenty Seven brand name and replace
it with Moody’s ESG Solutions. Our commitment to producing science-driven insights and
analytics on climate risk remain the same and you can continue following our latest research at
https://esg.moodys.io/climate-solutions.
Please reach out to us at mesg@moodys.com if you have any questions. Thank you very much for your interest and valued support.
Four Twenty Seven, an affiliate of Moody's, sends a monthly newsletter highlighting recent developments in climate risk and resilience.
In Focus: Deadly Winter Storm in Texas
Devastating Extremes Highlight the Need for Equitable Resilience
In the massive disaster still unfolding in Texas after temperatures have returned to average, dozens were killed and many more are still suffering with lack of clean drinking water, home repairs from burst frozen pipes, and exorbitant energy bills, among other challenges. While scientists are still exploring the connection between a warming Arctic and frigid conditions spreading south, the scientific community agrees that climate change will bring more extreme conditions. The widespread power outages in Texas underscore the dire need to implement a diverse set of adaptation measures to prepare for a range of extreme events, including heat waves and storms. Weatherization of power plants and energy infrastructure, alongside improvements to home insulation can help prepare for extreme temperatures on either end of the spectrum.
This disaster also underscores the disproportionate impacts of extreme events on low-income residents and people of color, who are less likely to have backup generators or disposable income and more likely to lose critical wages from missing shifts during the storm. Likewise, in Texas, residents that shared energy circuits with critical facilities such as hospitals often kept their power during the storm, but these facilities are not usually in Black and Hispanic communities. These challenges aren't unique to Texas. In Louisiana, residents still homeless or suffering from two hurricanes last fall were also hit by extreme cold, facing yet another challenge to their survival, and there are similar stories after disasters across the country.
Ongoing Efforts to Address the Financial Risks of Climate Change
Central banks and financial regulators around the world continue to announce developments in their plans to address climate risk. This month the E.U. made additional progress, while the US began to make up for lost time. The UK also released a consultation on its updated draft climate risk disclosure legislation for pensions based on last fall's consultation responses.
Earlier this month the San Francisco Federal Reserve published an Economic Letter explaining its approaches to climate-related risks relating to supervision and regulation as well as financial stability. It outlined recent global efforts to address this risk and explained the Fed's own approach, emphasizing the value of scenario analysis for individual financial institutions and of stress tests as a tool for assessing potential climate impacts on the financial system more broadly. Meanwhile, Treasury Security Yellen has established a new Treasury climate "hub," and is currently seeking to find its leader. The likely candidate, Sarah Bloom Raskin, has served both as a deputy Treasury secretary and on the Federal Reserve Board.
Every Region Has its Climate Risks
The New York Times on Global Populations' Exposure to Climate Hazards, Featuring Four Twenty Seven Data
Every region has its own set of climate risk exposures and how this risk creates adverse impacts depends upon the population and economic activity exposed, as well as any climate adaptation measures in place. Based on Four Twenty Seven's data about 90% of the global population will be exposed to at least one climate hazard by 2040, and the New York Times' interactive story brings these findings to life, with additional context about each region.
Climate Risk by Community Type in the US
In the US there is a growing field of research exploring the overlay between community characteristics and their exposure to climate hazards. From demographics and resources to economic composition, many factors influence communities' vulnerability to climate hazards and their ability to prepare. The American Communities Project explores how climate hazards in the US correspond to different community types, leveraging Four Twenty Seven's data. The analysis highlights the significant exposure to sea level rise in "Military Posts," and exposure to extreme rainfall in "Working Class County" and "Middle Suburbs," as well as several other key findings and the potential implications of these exposure trends.
Climate Change & Sustainability Resources for Investors
Climate Opportunities and Risks in an Altered Investment Landscape
In this year's Megatrends report, Weathering Climate Change, PGIM provides a deep dive into the many ways climate risk can affect institutional investors, including a briefer on the climate science, an investor survey and a discussion of ways to integrate climate change into investment decision-making. It highlights risks and opportunities across asset classes, including fixed income, equities, real estate and infrastructure, and explores portfolio implications, with analysis from Four Twenty Seven.
Sustainable Bond Insights 2021
This year's Sustainable Bond Insights compiled by Environmental Finance, provides a review of 2020's green and sustainable bond issuance and looks forward to the year ahead. Moody's ESG Solutions and Moody's Investors Service contributed a chapter highlighting three trends to watch this year: increased issuance by governments and agencies; the rise of sustainability-linked financing; and climate risk and resilience in the bond market.
We're Hiring! Join Moody's ESG Solutions
There are several opportunities to join Moody's ESG Solutions dynamic team. See the open positions below and visit Moody's Careers page for more information.
Mar. 10 – Environmental Social Justice Webcast: Director, Communications, Natalie Ambrosio Preudhomme, will discuss opportunities to leverage climate risk analytics to build corporate and community resilience.
Mar. 22-25– Ceres 2021: Emilie Mazzacurati will speak on the panel "The New Materiality of Climate Science and What it Means for Investors and Companies."
Apr. 14-16– The Eurofi High Level Seminar: Emilie Mazzacurati will present on the panel "Climate Risk Implications for the EU Financial Sector."
Sept 22 – 2021 CARE Sustainability Conference: Natalie Ambrosio Preudhomme will present on financial climate risk analytics during the panel "Implementation Issues."
Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss a review of U.S. climate adaptation and a close look at opportunities to build resilience through collaboration.
In Focus: The State of Climate Adaptation
Are we doing enough? How is the field of adaptation developing in the United States? Rising to the Challenge, Together: A Review and Critical Assessment of the State of the US Climate Adaptation Field explores the field’s development, potential and challenges. Commissioned by the Kresge Foundation, the report was co-authored by Susanne C. Moser of Susanne Moser Research and Consulting, Joyce Coffee of Climate Resilience Consulting, and Aleka Seville in her capacity as Four Twenty Seven’s Director of Community Adaptation in 2017.
Based on a literature review and dozens of interviews with thought leaders and adaptation practitioners, this report finds that the emerging field of climate adaptation must continue to develop with increased urgency. Communities across the country are experimenting with adaptation, with the support of a growing knowledge base and suite of tools, and boosted by new actors including utility managers, private sector interests and philanthropy.
However, the field is largely crisis-driven and fails to adequately address the social equity aspects of adaptation choices, that should ensure all people benefit regardless of socio-economic status or race. It also lacks a shared vision, consistent funding and agreed upon best practices among other shortcomings, the report found. The report recommends aggressive acceleration of adaptation planning, coordination across jurisdictions, and implementation among advocates, planners, and funders. Read more.
Working with businesses to build community resilience
As increasing numbers of climate disasters cause over $1 billion in damages, the economic impacts of these events are widespread and ongoing. California wine-growers will feel the financial effects for years as they work to rebuild their vineyards, while the communities that depend on this economy will also feel these consequences. Four Twenty Seven’s blog post “Working with Businesses to Build Community Resilience” outlines opportunities for local governments and businesses to support each other in adaptation efforts.
Businesses and communities depend on each other and have important roles to play in collaborative climate change preparation. While businesses rely on resilient infrastructure and city services, they can also support community recovery efforts and participate in planning. Likewise, local governments can create collaborative networks, share resources and engage businesses. Read more.
For more insight on corporate adaptation read the Caring for Climate report, The Business Case for Corporate Adaptation, which highlights the benefits for businesses to build their awareness of climate risk and opportunities for policymakers to encourage corporate adaptation.
Will Amazon HQ2 consider resilience?
Eager for an opportunity for up to 50,000 jobs and a potential $5 billion in investment, twenty cities received the anticipated advancement to the list of finalists for Amazon’s HQ2 last month. Among this short list is the Southeast Florida bid, a collaboration between Broward, Miami-Dade and Palm Beach Counties.
These counties have experience working together through the Southeast Florida Regional Climate Change Compact, which also includes Monroe County. The compact’s Regional Climate Action Plan emphasizes the importance of regional strategies to build resilient economies and communities. Now the benefits of this collaboration are becoming increasingly clear, as many of the regional compact’s priorities, such as addressing sea level rise and improving infrastructure, are also important for bolstering economic success by helping to attract Amazon and other businesses to the region.
Inside the Office at Four Twenty Seven
Meet the Team: Lindsay Ross
Four Twenty Seven is delighted to welcome Lindsay Ross, who joins the team as a Senior Analyst, Macroeconomic Risks. Lindsay analyzes the economic impacts of climate change on corporations and financial markets. She studies at the Johns Hopkins School of Advanced International Studies (SAIS), focusing on Energy, Resources, and the Environment as well as International Finance and Economics. Previously she worked for the U.S. International Trade Commission, assisting with research on the impacts of international trade on the U.S. economy.
Upcoming Events
Join the Four Twenty Seven team in the field at these upcoming events:
February 13:Climate Risk: From Assessment to Action, Washington, DC: CEO, Emilie Mazzacurati, will speak on a panel at this workshop hosted by the Inter-American Development Bank
February 28 – March 2:Climate Leadership Conference, Denver, CO: Climate Adaptation Senior Analyst, Kendall Starkman, will attend this gathering of climate, sustainability and energy professionals.
June 18-21:Adaptation Futures 2018, Cape Town, South Africa: Director of Advisory Services, Yoon Kim, will facilitate a session at this conference, exploring integrating climate risks into infrastructure investment decisions.
August 28-29:3rd California Adaptation Forum, Sacramento, CA: Save the date for this opportunity to join over 600 climate leaders in workshops, sessions and networking around adaptation action in California.
Four Twenty Seven’s monthly newsletter highlights recent developments in climate adaptation and resilience. This month, don’t miss our white paper on physical climate risk in equity portfolios, French President Macron’s op-ed on climate finance, and our policy recommendations on protecting workers from climate health impacts. Also, be sure to check out our new website!
In Focus: Physical Risk in Financial Portfolios
Figure 4. Extreme Precipitation Risk for Facilities from France’s Benchmark Index CAC40
Four Twenty Seven and Deutsche Asset Management jointly released today at COP23 a white paper featuring a new approach to climate risk management in equity portfolios. The white paper, Measuring Physical Climate Risk in Equity Portfolios, showcases Four Twenty Seven’s Equity Risk Scoring methodology, which identifies hotspots in investment portfolios by assessing the geographic exposure of publicly-traded companies to climate change. Our methodology tackles physical risk head on by identifying the locations of corporate sites around the world and then the vulnerability of these corporate production and retail sites to climate change, such as sea level rise, droughts, flooding and tropical storms, which pose an immediate threat to investment portfolios.
Deutsche Asset Management is leveraging Four Twenty Seven’s Equity Risk Scores to satisfy institutional investors’ growing desire for more climate resilient portfolios and design new investment strategies. “This report is a major step forward to addressing a serious and growing risk that investors face. To keep advancing our efforts, we believe the investment industry needs to champion the disclosure of once-in-a-lifetime climate risks by companies so we can assess these risks even more accurately going forward,” said Nicolas Moreau, Head of Deutsche Asset Management.
French President Emmanuel Macron emphasizes his support for the Taskforce on Climate Related Financial Disclosure’s (TCFD) recommendations in an op-ed published on Global Markets. Macron also highlighted the importance of climate finance mechanisms, such as green bonds, and the need for private participation in financing climate action.
France has been heralded as a global leader on climate risk disclosure with the passage of the Energy Transition Law, including Article 173, which includes a requirement for financial institutions to disclose their exposure to physical climate risk. Four Twenty Seven is working with French public pension funds and screening equity portfolios to support reporting efforts in compliance with Art. 173.
Adaptation: Safeguarding Worker Health & Safety
Four Twenty Seven co-authored an article titled “Safeguarding Worker Health and Safety from a Changing Climate: Delaware’s Climate-Ready Workforce Pilot Project,” with the Delaware Department of Natural Resources and Environmental Control. Through interviews, surveys, and policy analysis assessing the climate resilience of existing worker health and safety policies, the authors examine the preparedness of five state agencies for climate impacts. The article highlights particular risks faced by vulnerable workers and offers policy recommendations for enhancing resilience to ensure the safety and well-being of agency staff.
Four Twenty Seven’s Director of Analytics, Nik Steinberg’s panels at COP23
Measuring Progress on Climate Adaptation and Resilience: From Concepts to Practical Applications
Nov. 7, 3:00 – 4:30pm, Meeting Room 7 (150)Director of Analytics, Nik Steinberg will join a panel of experts discussing adaptation measurement, focusing on indicators and metrics to inform and assess resilience efforts. This side event will be hosted by the International Development Research Centre (IDRC), Asian Institute of Technology (AIT), McGill University and the University of Notre Dame.
Resilience as a Business: How the Private Sector Can Turn Climate Risk into Business and Investment Nov. 10, 5:30 – 8:00pm, Hilton Bonn
Bringing together corporate stakeholders and private investors, this event will explore the private sector’s pivotal role in mainstreaming adaptation and driving the resilience agenda.
Speakers include: Representative from Ministry of Economy, Trade, and Industry of Japan; Mari Yoshitaka from Mitsubishi UFJ Morgan Stanley Securities Co. Ltd.; Jay Koh from Lightsmith Group and GARI; Nik Steinberg from Four Twenty Seven; and Amal-Lee Amin from Inter-American Development Bank. For more information contact proadapt@fomin.org.
Tool: Monitoring Progress on the Paris Agreement
This interactive new platform developed by the The World Resources Institute combines climate policy data with interactive graphics to help analysts and policy makers stay up to date on nationally determined contributions (NDCs), greenhouse gas emissions by sector and more. Climate Watch allows users to sort data based on various indicators, examine connections between NDCs and Sustainable Development Goals, and dive into data on specific nations.
Inside the Office: What’s New at Four Twenty Seven
We Have a New Website!
With streamlined navigation and updated visuals, our new website brings our story alive and allows for a more engaging user experience.
Visit the Solutions page to explore our advisory services and subscription products, including Equity Risk Scores, Portfolio Analytics and Real Asset Screening.
Check out the Insights section for our perspectives on climate resilience, climate risk reporting, adaptation finance, climate science and recent events.
Meet Pete Dickson, Director of Business Development
Four Twenty Seven is proud to announce the addition of Pete Dickson to our team. As the Director of Business Development, Pete is responsible for driving growth for our subscription products, with a focus on financial institutions.
Pete brings more than 20 years of experience in institutional sales, trading, and business development. He’s worked with both the buy-side and sell-side to develop and execute business plans and build revenue, products, and services. Pete has worked with some of the largest financial services and asset management firms in the US and abroad.
Upcoming Events
Join the Four Twenty Seven team in the field at these upcoming events:
November 7-17 COP23, Bonn, Germany: Join Director of Analytics Nik Steinberg at side events at the UNFCCC’s 23rd Conference of Parties (See above for details).
November 12-15 Airports Going Green, Dallas, TX: Director of Advisory Services Yoon Hui Kim will present on corporate climate resilience planning for airports and transportation infrastructure.
November 16-17Berkeley Sustainable Business and Investment Forum, Berkeley, CA: COO Colin Shaw will attend this event sponsored by the Berkeley-Haas Center for Responsible Business and the Berkeley Law School
November 30Roundtable: Investing with Impact, San Francisco, CA: CEO Emilie Mazzacurati will speak at a roundtable organized by Deutsche Asset Management about the use of ESG data in portfolio investing (by invitation).
December 6-7 RI Americas 2017, New York, NY: CEO Emilie Mazzacurati will present on Physical Climate Risk in Equity Portfolios (Wednesday Dec 6 at 2pm)and meet with Colin Shaw, Pete Dickson and Katy Maher at the Four Twenty Seven booth.
December 11Climate Finance Day, Paris, France: CEO Emilie Mazzacurati will join this high profile event sponsored by the French Ministry for the Economy and Finance.
December 11-15 AGU Fall Meeting, New Orleans, LA: Climate Data Analyst Colin Gannon will join the Earth and Space Science community to present a poster on climate modeling.
A busy medical ward is the last place you want the lights to go out in the event of a hurricane, flood or extreme weather event. These are also the conditions that can drive surges of patients to emergency rooms for treatment at a rate that can quickly outpace the hospitals capacity to react. Climate change increases the frequency and magnitude of extreme weather events and conditions – from asthma to vector diseases — likely to increase demand for healthcare. However, most hospitals have yet to integrate local climate change projections into their risk management and planning processes.
Photo Credit: GetyImages
Working with a coalition of healthcare networks and non-profit Healthcare Without Harm, we developed an award-winning user-friendly dashboard for hospitals to better understand how climate change effects their operations and the patient population that they serve. This innovative application enables participating healthcare networks to integrate climate risk analytics into their hazard and vulnerability assessments, strategic communications and long-range planning.
The Resilient Hospital Dashboard is an interactive platform that enables healthcare networks to identify hotspots, key drivers of risk, and the specific local impacts faced by each of their hospitals. By using climate, socio-economic, public health and facility specific data, our dashboards analytics help hospitals understand the impact of climate change on their community and patients.
How does it work?
Our Resilient Hospital dashboard integrates local climate projections and applies healthcare indicators unique to each hospital’s situation to account for results specific to their populations. It provides hospitals with a cost-effective way to access and understand climate data relevant to their day-to-day operations and specific to the populations they serve.
Climate, socio-economic, public health, and facility data inform the risk assessment in our Resilient Hospital dashboard.
In the same way that doctors and care providers use their expertise and medical knowledge to provide treatment that returns the best long-term health outcomes for their patients, our applications leverage climate and healthcare data to provide beneficial operational outcomes. It enables our clients to consider both the near and long-term impacts of climate change and expertise that can inspire actions that enable healthcare professionals and hospitals to operate when the need for their services is greatest.
From Data to Patients
Through the Resilient Hospital Dashboard we aim to tell a story about how hospitals can improve the bottom line, and do so by capturing the many individual stories of climate change. Behind every data point we use to identify risk and impact is a living, breathing patient admitted for treatment of heat stroke, asthma, or other environmental event.
Our data analytics and research shows that the people getting admitted for care are the most vulnerable among us. They include the young, the old, and the marginalized. While we originally set out to identify opportunities for hospitals to improve their operations — and our dashboard does that too, what we ultimately created is a data-driven, visual representation of the footprint climate change is leaving on society.
The trends we are seeing create a much-needed understanding of how climate change impacts communities. From this understanding we can find opportunities to act, and help doctors and care providers choose what actions can best support their planning process, enabling them to provide more consistent and higher quality of care, resilient to the operational shocks and stress of climate change.
On September 29th, Mark Carney, recently appointed Governor of the Bank of England, gave a speech on the risks of climate change to financial stability at a Lloyd’s insurance event. Carney referred to climate change as the “tragedy of the horizon,” citing outcomes like the impact of rising seas on the world’s coastlines and infrastructure as one of the largest risks to financial stability around the world. Carney cited three major risks to financial stability from climate change.
1. Climate change presents physical risks
First risk: “The impacts today on insurance liabilities and the value of financial assets that arise from climate- and weather-related events, such as floods and storms that damage property or disrupt trade.”
In the context of sea level rise, the impacts of climate change on infrastructure and property along the world’s coastlines are readily apparent. Carney referenced a Lloyd’s study that “estimated that the 20 cm rise in sea-level at the tip of Manhattan since the 1950’s, when all other factors are held constant, increased insured losses from Superstorm Sandy by 30 percent in New York alone.”
Rising seas already compounded the impact of hurricane Sandy, knocking out power grids, flooding subways and causing financial damages estimated to be between $30 billion to $50 Billion. Under current projections of sea level rise up to a 6.6 foot increase is possible by 2100; and as oceans rise so will the physical impact of superstorms.
Second risk: “The impacts that could arise tomorrow if parties who have suffered loss or damage from the effects of climate change seek compensation from those they hold responsible. Such claims could come decades in the future, but have the potential to hit carbon extractors and emitters – and, if they have liability cover, their insurers – the hardest”
Carney suggests that those who suffer the majority of asset loss from climate change could look to hold polluters, governments or private firms accountable for risk exposure.
Nestle is now being sued for the use of water in Southern California and their impact on the California drought. Lawsuits against corporations, governments or private land owners who have shifted the true costs of their behavior onto the commons have the potential to be held accountable for their behavior as extreme weather events become more common and impactful.
Liability for the loss of property and adverse health affects due to climate change are not only held by private firms, but also my American taxpayers. In Alaska, the town of Kivalina is already being displaced by sea level rise and melting sea ice. In response the Obama administration has proposed $50.4 Million in federal aid for relocation costs.
3. Climate change will create more stranded assets
Third risk: “The financial risks which could result from the process of adjustment towards a lower-carbon economy. Changes in policy, technology and physical risks could prompt a reassessment of the value of a large range of assets as costs and opportunities become apparent.”
What Carney is getting at here is the fact that an assessment of liability will change the valuation of an asset. This includes what is commonly referred to as “stranded assets”, in particular fossil fuel reserves — and the plants that process and burn them — will become useless is a world focused on carbon-free energy. But it also includes a much greater class of assets that could become stranded, for example real estate on properties that experience frequent and increasing flooding. After the world has seen enough primary property loss and secondary liability loss due to impacts like rising seas our markets will compensate by devaluing at risk assets.
Conclusion
Climate science has been warning us for decades that the impacts of unbridled emissions are on the horizon, but what Carney adds to the conversation is the translation of the risks into financial terms. As acceptance and information about climate change increase so too does the desire to find innovative solutions that build resilience into how we do business and navigate the risks. Being informed about the potential impact of sea level rise and extreme weather events can help industry and government adapt and keep out of the deep waters of rising seas.
On October 3rd, the Obama administration declared a state of emergency in South Carolina in the wake of Hurricane Joaquin, which dumped a foot and a half of rain in approximately 24 hours on the Carolinas, caused floods from New Jersey to Georgia and sunk cargo ship El Faro and its crew. While the Charleston and many other cities were battling the floods, with a cost estimated at over $1 billion, France was also experiencing unexpected flash floods near Nice, which caused 17 death. Landslides in Guatemala also claimed the lives of 186 people and were catalyzed by a strengthened El Nino. When considering each event in isolation, it may be possible to overlook the connection between the storms intensity and climate change. Together these extreme weather events are indicative of a larger trend; while we can’t predict where the next big storms will hit, we do know they are becoming more frequent and stronger.
Flooding in South Carolina. Photo by Sean Rayford/Getty Images
These serve as yet another wakeup call to remind us that we are already experiencing the impacts of climate change, and that our communities, cities and business need to be prepared for the stormy weather. But, as humans, do we require a crisis to mobilize us into action? Or can the same results be sparked through other methods without the loss of life, property and human well-being?
Climate scientists have warned for years of how climate change will increase the intensity of hurricanes, and the Southeast U.S. is a highly exposed region for such hurricanes. Yet many of us act as if the storm was always going to hit next door, and fail to apply our rational understanding of risk to better preparedness.
At Four Twenty Seven, we created Climate War Games to put executives and decision-makers into the context of the increasing risks presented by climate change. Gaming and simulation provide teachable moments, which we can apply to our real world behavior.
Operation, probability and climate outlook cards from the Climate War Game
In game play, we assign the players to companies and task them with running their business while getting through a number of rounds in which they experience unpredictable extreme weather events. We break down uncertainty by type of event and their varying impacts to supply chains and infrastructure that can be damaged by extreme precipitation or temperature.
While the specific outcomes are unpredictable, because they hinge on a dice roll, the risk profile of each player’s hand is clearly laid out, so as to enable teams to understand their company’s risk profile and adopt the most cost-effective portfolio of adaptation measures. The winner is the company that earns the most profit – and limits its losses — that way, game play reflects the same challenges organizations face in the real world.
The game emulates the escalating risk of climate volatility and simulates through dice rolls the increasing likelihood of “black swan events” with low probability of occurrence, but high consequences and subsequent costs.
Players have to make the same tough choices they would in the real business world between saving or spending, and we see teams approach the choices in both creative and conventional ways. While there are different ways to play, the real value of the game comes from knowing that the risks actually create business opportunities, and acting through an informed strategy pays out over the long run. The game also helps participants reflect upon the potential human implications of their risk mitigation strategy.
Confronting the reality of what climate change is going to bring upon us can feel overwhelming at times. By providing a safe environment with clearly delineated risk profiles, and challenging players to make decisions and take action in a context of uncertainty, we help break down mental and cultural barriers to corporate adaptation, and set participants on track to build climate resilience. We do not know where the next storm will hit, but we can and should prepare to the best of our ability using climate science and probabilities.
Learn more about Climate War Games and our training courses offering here.
The recent winter weather that buried Buffalo, NY under more than 5 feet of snow and ground life to a halt should attract the attention of US businesses leaders across the country. Although Buffalo is prone to heavy snowfalls, the long-term outlook for more frequent and severe snowstorms for business is not good. Extreme winter storms in the US have been increasing in frequency and severity over the past 30 years (graph “US winter storm loss trends, 1980-2011”: http://www.iii.org/fact-statistic/catastrophes-us), with average annual associated financial losses nearly doubling over that time.
An extreme snowfall can also initiate indirect economic losses and cascade into supply chain disruptions. One hour down the blocked NY State Throughway, Rochester companies have had difficulty receiving shipments from normal supply routes and have scrambled to find replacement goods with varying degrees of success. Buffalo is home to major distributors for businesses such as the area’s major supermarket chain Wegmans. The snowfall has impacted the heavily used trucking route that runs through Buffalo from areas as distant as Wisconsin. Trucking companies are also sending out refrigerated trailers earlier than normal, at an additional cost, to prevent food from freezing because of the extreme cold.
Weather forecasts predict the snowfall to be followed by warmer weather and rain, which could lead to severe flooding from snow melt. Flood warnings have been issued as light rain and temperatures in the 50s and 60s threaten to flood areas that have never been at risk of flood before. Governor Cuomo commented on the new dangers arising from the snow melt and recommended people to leave at-risk homes early:
“Err on the side of caution…Flooding, in my opinion, is worse than dealing with snow,” Cuomo said. “It’s not water. It’s a toxic brew.”
Although it seems counter-intuitive, these winter storms are not getting worse despite global warming, but rather because of it. The complexity of this result illustrates how confusing climate change signals can be and the importance of creating accurate awareness. Scientists point to a weakening of the jet stream, the Earth’s halo of fast moving air, caused by warming in the arctic outpacing that of the rest of the world. A slower jetstream tends to meander and is more easily pushed off track, bringing warm air further north and cold air further south as its normally straight flow forms waves.
Experts trace the recent jet stream wanderings to Typhoon Nuri. The typhoon pushed the jet stream off course and north with a large body of warm air as it moved into the northern Pacific. As the air current bulged northward, arctic air downstream had nowhere to go but south, pushing the jet stream ahead of it over the continental US. Events like this year’s “Arctic Blast” and last year’s famous “Polar Vortex” will be more easily triggered by climate change-weakened jet streams. This chain of events, along with a Lake Erie’s warming by long-term climatic changes, caused the flow of very cold air to pick up additional moisture and dump it on Buffalo as “lake effect” snow. Energy from Typhoon Nuri then proceeded to be carried down the jet stream to Buffalo, resulting in the warming spell that causes flooding. (See Al Jazeera’s excellent in-depth explanation of this phenomenon).
As the climate continues to change, events like these are predicted to become regular occurrences and not outlying record-setting events. Businesses need to ready themselves for a future of 6-foot snowfalls and be better prepared to act quickly.
Image: (c) Munich Re, Getty Images, and AccuWeather.com
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As you may already be aware, Four Twenty Seven was acquired by Moody’s Corporation in
2019 and officially became a part of Moody’s ESG Solutions Group in 2020.
Over the coming weeks, we will begin to retire the Four Twenty Seven brand name and replace
it with Moody’s ESG Solutions. Our commitment to producing science-driven insights and
analytics on climate risk remain the same and you can continue following our latest research at
https://esg.moodys.io/climate-solutions.
Please reach out to us at mesg@moodys.com if you have any questions. Thank you very much for your interest and valued support.
As increasing numbers of climate disasters cause over $1 billion in damages, the economic impacts of these events are widespread and ongoing. California wine-growers will feel the financial effects for years as they work to rebuild their vineyards, while the communities that depend on this economy will also feel these consequences. Four Twenty Seven’s blog post 
Eager for an opportunity for up to 50,000 jobs and a potential $5 billion in investment, twenty cities received the anticipated advancement to the 
Four Twenty Seven is delighted to welcome Lindsay Ross, who joins the 
Director of Analytics, Nik Steinberg will join a panel of experts discussing adaptation measurement, focusing on indicators and metrics to inform and assess resilience efforts. This side event will be hosted by the International Development Research Centre (IDRC), Asian Institute of Technology (AIT), McGill University and the University of Notre Dame.
The recent winter weather that buried Buffalo, NY under more than 5 feet of snow and ground life to a halt should attract the attention of US businesses leaders across the country. Although Buffalo is prone to heavy snowfalls, the long-term outlook for more frequent and severe snowstorms for business is not good. Extreme winter storms in the US have been 
