Climate threats to sovereigns’ creditworthiness are on the rise. Are financial institutions on top of their exposures? Pakistan. China. Kenya. Each country is grappling with the devastating impacts of different physical climate risks — from titanic floods to blistering heat waves. Each nation also provides a drastic example of how climate change can disrupt national […]
Alex
Where women lead, money follows
Climate risk regulation rundown: August 2022
What happened in climate-related financial regulation last month, and what’s coming up The US Securities and Exchange Commission (SEC) ended its consultation on a proposed rule to enhance ESG fund disclosures on August 16. The agency received over 170 comment letters from financial industry associations, lawmakers, and non-governmental organizations, among others. A letter from 21 Republican state attorneys-general demanded that the […]
An Economic Slump is No Reason to Skimp on ESG
High inflation and slow economic growth have darkened the outlook for businesses. Big and small companies face higher costs and lower profits, and many are reviewing their expenditures to see where they can save. A recent survey found that investments for improved sustainability and reduced environmental impact are among the most likely to be cut […]
Five Ways Mining Companies Can Engage on Climate, and the Business Case For Doing So
September 21st, 2022 Mining is in a unique position: it has direct or indirect responsibility for more than ¼ of the world’s emissions and also represents a master key to unlock an effective low carbon transition. The industry is under immense pressure from investors, activists and media and governments to lower its emissions and improve […]
Rabobank’s woes herald a new phase in climate transition risk management
The creditworthiness of high transition risk borrowers may degrade as more ambitious climate policies are enacted Rabobank is the new poster child for climate transition risk in the financial system. In response to the Dutch government’s June announcement of a plan to slash nitrogen oxide emissions from the country’s livestock sector, the lender downgraded the […]
Why climate models struggle with acute physical risks
Climate models have a major blind spot: they can’t see extreme weather-related risks. This is a big problem for financial institutions, since these kinds of threats — also known as acute physical risks — could hammer their investments and sap their capital. But despite their shortcomings, financial supervisors are already using these flawed models to […]
US Inflation Reduction Act Unlocks Climate Opportunities
A brighter climate future is here. On August 16, US President Joe Biden signed the Inflation Reduction Act, which includes USD$369bn in climate change and clean energy investments. That’s the most the US government has ever spent to address global warming. Expert analysis shows the legislation should cut US emissions by around 40% by 2030, relative to […]
Climate Trends: Manifest Climate Data Reveals Gaps in Companies’ Emissions Disclosures
Companies are under growing pressure from investors, customers, and regulators to disclose their greenhouse gas (GHG) emissions. This data is essential for understanding just how much each business contributes to climate change and for establishing credible emissions-reduction targets, a key part of any organization’s broader climate plan. It also allows companies to benchmark their progress […]
GFANZ Wants to Whip Portfolio Alignment Metrics into Shape
Our climate future is unknown territory. Still, financial institutions want to plot a course to its coolest fringes. Hence the buzz over portfolio alignment metrics (PAMs) — the measurement systems firms can use to understand what investment, lending, and underwriting activities support a 1.5°C warming pathway. Banks, asset managers, asset owners, and insurers want PAMs […]