With the escalating alarm of climate change, investors globally are starting to recognize its inherent risks, prompting a paradigm shift in financial modelling. However, the journey is fraught with obstacles due to the paucity of comprehensive environmental data and the inconsistency in corporate disclosures. Rick Stathers, a prominent figure at Aviva Investors, underscores a market failure in appreciating the potential impacts of climate change on the global economy.
Open-source Climate Models: A Beacon of Hope
Matt Goldklang from Man Numeric, along with other farsighted investors, are turning to open-source climate models to gauge which companies might bear the brunt of climate-related events. Man Numeric has pioneered models to evaluate physical risks such as drought and potential impacts of emissions regulations on company earnings. This innovative approach led to revelations like identifying a US food production company at higher risk due to its water dependency.
The Cost of Climate Change
BloombergNEF’s analysis reveals that drought is the most expensive weather risk for companies, resulting in a median loss of 0.3% of annual revenue. This statistic underlines the economic peril that companies face due to environmental changes. The rise of Environmental, Social, and Governance (ESG) investment criteria has galvanized funds to advocate for improved corporate environmental practices. However, this initiative is facing a political backlash in the US, revealing a divisive landscape.
Quantifying Climate Risks: The Need for More Data
Asset managers are resorting to diverse methods to quantify climate risks. Some are constructing heat maps, while others are factoring in government carbon emission targets. Nonetheless, the unanimous sentiment among them is the urgent need for more detailed data for precise analysis. Lombard Odier Investment Managers, for example, is embarking on a project to measure soil health to gauge risks to food systems. However, they require more granular data at the farm level to derive actionable insights. The nexus of climate change and finance is increasingly apparent, underlining the critical need for robust risk assessments and resilient infrastructure design to mitigate potential losses.
Share on Facebook «||»
Share on Twitter «||»
Share on Reddit «||»
Share on LinkedIn
Centre For Climate Change NAU Awka Holds First South East Climate Change Summit: Centre for Climate Change, Nnamdi Azikiwe University, has organized the first South-East climate change summit, to draw public attention on the need for the adoption...
Minister of Climate Change and Environment highlights link between food systems, climate change, health at Food For Future Summit: Minister of Climate Change and Environment highlights link between food systems, climate change, health at Food For Future Summit DUBAI, 24th February, 2022 – Mariam...
Validation of the ECOWAS regional climate strategy: The fifteen Member States united for a solidary and coordinated action against climate change: The ECOWAS Regional Climate Strategy is the result of a collaborative process spanning over a year between institutions, ECOWAS Member States within the subregion,...
Minister of Climate Change and Environment explores potential synergies in climate action, clean energy, food security during Germany visit: Minister of Climate Change and Environment explores potential synergies in climate action, clean energy, food security during Germany visit DUBAI, 20th February 2022 Mariam bint...
Climate budget tagging system to integrate climate considerations into public financial management processes: South Africa addresses climate change challenges with dedicated resource pool The South African government is taking proactive steps to address the challenges posed by climate...
Former Wimbledon champion trades tennis for modeling: …By Larry John for TDPel Media. Sofya Zhuk won the 2015 Wimbledon girls’ singles title at the age of 15, but retired from the sport...
Jessyka Janshel: The Rising Star of Instagram and Modeling: …By Judah Olanisebee for TDPel Media. Jessyka Janshel: Rising Model and Instagram Sensation Advertisement Emerging as a promising model, Jessyka Janshel has garnered significant recognition...
Corinne Joy: A Rising Star in Dance and Modeling: Unraveling Corinne Joy: The Rising Star in Dance and Modeling Advertisement Corinne Joy, a prominent American model and dancer, has swiftly made her mark in...
Transgender Model Frances Coombe Takes on Gender Discrimination in the Modeling World: Discrimination Claims in Modeling Industry Frances Coombe, a Canadian catwalk model, has filed a lawsuit against his former employer, Muse Management, and CEO Conor Kennedy,...
Celebrity Offspring’s Surge in Hollywood’s Acting and Modeling Arenas: The Nepo Baby Phenomenon The term ‘nepo baby’ emerged in 2022, igniting debates on privilege in Hollywood. The offspring of established stars surged into the...
