This article is part of a monthly series contributed by The ESG Group at Silver Leaf Partners, courtesy of Managing Partner, Michael J. Scanlon.
Momentum in Climate-Related Risk Disclosures: Flooding costs $ Billions, Who’s paying?
In lieu of federal action, the disclosure of climate-related risks has become the subject of broad and current interest within the ESG investment community due to state and international actions. The U.S. Government Accountability Office (GAO), a federal agency that provides non-partisan investigative audits for Congress, recently conducted an analysis of the SEC’s current role in climate-related financial disclosure. In this study, GAO found that there was significant ambiguity in federal guidance and limited federal guidance on climate-related risk disclosure.
In the field of climate-related risk disclosure, California has been a leader. Back in May, the California Department of Insurance conducted the first climate-related financial risk stress test by a U.S. financial regulator. Between the stress test and recent legislation to require public disclosure of climate risk, California has provided motivation for corporations to implement the voluntary recommendations of the United Nation’s Environmental Program’s Task-Force on Climate-Related Disclosures. In September, the Task Force released its 15 month status report showing broad adoption of these voluntary recommendations. The status report identified over 500 companies, governments, and organizations currently implementing the recommendations, including 287 financial firms responsible for assets of nearly $100 trillion.
While climate-risk related disclosures typically consist of litigation-based risks or risks associated with the transition to a low carbon-based economy, there is increasing recognition of the need to identify the risks of physical assets. Recognizing the need for more support on this front, consultants and start-ups like The Climate Serviceare increasingly working to help companies determine their physical vulnerability to climate-related risks. While federal policy may not be driving climate-related risk disclosures, the efforts of these state, international, and private entities represent significant momentum for the disclosure of climate-related risks, particularly those associated with physical assets. Submitted by; Michael Dexter is a climate risk and resilience expert. He is a certified floodplain manager and formerly an EPA official. Email: Littorallymikedexter@gmail.com
” Smart Investing ” for Climate Change in the Pacific Northwest
Climate change will lead to many unwanted problems, but the degree and severity of weather impacts will vary by region and every state has its unique complications for its citizens. My recent months of analysis on the expected impacts of climate change n the Pacific Northwest, I developed an investment thesis and strategy around climate impacts over the next 30-40 years. For the Pacific Northwest, the key climate threats include heat stress, droughts, wildfires, reduced snowpack, and ocean acidification. Washington State is an environmentally progressive state and is committed to a 50% reduction in GHG emissions by 2050. Nonetheless, a shifting global climate will have implications for Washington’s business and economy over the medium and long term. Below, I highlight a few examples of climate impacts and investable themes:
·Water stress will hurt the hydropower sector. Hydropower represents 70% of Washington’s electric grid but its share of generation is threatened by climate change. Warmer temperatures will result in reduced snowpack over the winter months and reduced seasonal water supplies. Snowpack in the Cascades mountains could decline 40% by 2040-50. With hydro at risk, Washington may have to invest more in wind, solar, and gas generation. Investments in rooftop solar companies and battery storage are also areas for growth.
·Commercial air travel will be negatively impacted. Aerospace is a key sector in Washington since Boeing is the largest private sector employer in the state. A warming climate can result in weight restrictions on hot days, delays from more frequent storms/turbulence, and flooding threats to low-lying coastal airports. As a result, Boeing and its supply chain are working to produce a lighter and more efficient next-generation aircraft. Engineering companies that specialize in climate resilient infrastructure should also benefit as airports and other key infrastructure need to be upgraded.
·Agriculture and aquaculture are clearly at risk. Agriculture is important to the economy and employment in Washington State. This sector should be impacted by heat stress and increased droughts in the years ahead. Mitigation may include investments in heat resistant crops, increased automation for fruit harvesting, and irrigation technology. The aquaculture sector, including oysters, will be hurt by ocean acidification. Investments in aquaculture should be avoided, in my opinion. For more information, please find me on LinkedIn (https://www.linkedin.com/in/
One World, One Population and the Astronauts!
www.Constellation.Earth is the future of a Sustainable world that only space travelers ( astronauts ) can truly appreciate. Founded by astronauts from around the world, Constellation is dedicated to inspiring positive action in students, decision-makers and the general public with the profound perspective shift experienced in space (click for its award-winning video “OVERVIEW”). Hard to believe that the 50th Anniversary of the first humans ever seeing the world from space appeared on modern Television in 1968. This is Earthrise. It was taken on Dec 24th, 1968 by the astronauts of Apollo 8 and it was the first time in history our planet had ever been seen from this vantage point. It is a vision of awe and wonder, and one that has forever changed our perspective of our planet and our place in the universe.In all of human history, only 560 people have seen the Earth from space and had the opportunity to experience what is commonly referred to as the Overview Effect.
Along with our One World understanding: comes the dynamics of a rising water table, hotter land temperatures and the recent Intergovernmental Panel on Climate Change report. Fortunately, we all believe that technology will reverse some of the disasters of weather related disasters. We are seeing a tremendous amount of new companies that are looking at ways to tackle these global issues. We hope that mankind will rise up to solve these humanity survival challenges. Looking back to Dr.Martin Luther King Jr’s time, he wanted to save civilization from collapse and create aspects he called ” the beloved community” of the world. Giving the population some of the oldest and numinous aspirations of humankind: leading a good life; treating our neighbors well, while imbuing our short existence with timeless ideas like grace, dignity, respect tolerance and love.
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