“It is also part of our mandate for monetary policy because climate change affects price evolutions, effects the economic outlook,” Villeroy told French asset manager Amundi’s annual investment forum in Paris.
This paper addresses what constitutes appropriate central bank policy in respect of environmental sustainability. Sound money and sustainability both depend on finding the right balance in the economy. Central banks use monetary policy to try to balance aggregate demand and supply. When they intervene in markets they can have significant impact – either to steer the economy or to address financial instability. This gives central banks the power and opportunity – subject to mandate - to address market distortions and externalities.
The Task Force on Climate-related Financial Disclosures (TCFD) published its 2019 Status Report to the Financial Stability Board (FSB) today. The TCFD’s second status report provides an overview of disclosure practices aligned with the Task Force’s recommendations between 2016 and 2018. The report also examines the decision-usefulness of existing climate-related financial disclosures to users of disclosure, and evaluates disclosures of strategy resilience and the challenges faced by preparers using scenario analysis. At the time of publication, nearly 800 organizations have expressed their support for the TCFD recommendations, a more than 50% increase from the publication of the first status report in September 2018.
An artificial intelligence (AI) review of reports from over 1,100 large companies across multiple sectors in 142 countries found that the average number of recommended disclosures per company has increased by 29% from 2.8 in 2016 to 3.6 in 2018. At the same time, the percentage of companies that disclosed information aligned with at least one of the Task Force’s recommendations grew from 70% in 2016 to 78% in 2018.
Investment professionals are increasing the pressure on big corporations to do more to combat climate change. A small, but influential investor, the Church of England has become a leader in the mission to save the environment through finance.
When doing your Risk Assessments, please be mindful of the physical and transition risks presented by climate change.
For three years in a row, the World Economic Forum’s Global Risk Report (GRR) has called out the risks we collectively face from climate change. In the 2019 report published in February, climate change and environmental risks dominate the “high likelihood” and “high impact” quadrant of the global risk matrix. Read the article here.
Click here to view the RMIA Risk Magazine April edition. Please note the magazine is for RMIA members only.
A renewed focus on lesser fuel usage was originally promoted by United Continental as a responsible move for the atmosphere. But the effects were felt most strongly by the company’s investors. United managed to save $343 million in a single fiscal year.
cross Alaska, March temperatures averaged 11 degrees Celsius above normal. The deviation was most extreme in the Arctic where, on March 30, thermometers rose almost 22 degrees Celsius above normal—to 3 degrees. That still sounds cold, but it was comparatively hot.
It is not alarmism to suggest that climate change is itself an emergency. It is the causal force driving up the frequency and severity of each of these other crises.
ExxonMobil and Chevron will square off at annual meetings today (29th May) with concerned investors who want to see greater action to address climate change risk, and a tangible shift in the corporate culture behind the companies’ intransigence.
Australia’s greenhouse gas emissions increased for fourth year in a row in 2018.
As things stand, however, Australia will be faced with the necessity of making the same transition over a period of perhaps five to 10 years. That will entail massive investment in solar PV, storage and wind, totalling perhaps $100bn. Given the uncertain environment created by decades of policy reversals, governments will need either to undertake this investment directly or provide long-term guarantees.
"Take the 6 million people who live in south Florida today and divide them into two groups: those who live less than six and a half feet above the current high tide line, and everybody else. The numbers slice nearly evenly. Heads or tails: call it in the air. If you live here, all you can do is hope that when you put down roots your choice was somehow prophetic."
Keynote address by John Price, Commissioner, Australian Securities and Investments Commission, Centre for Policy Development: Financing a Sustainable Economy, Sydney, Australia, 18 June 2018
“However, notwithstanding these issues, as a general proposition we do not consider that the law or our policy would impede an entity from undertaking scenario analysis. Likewise, we do not think that director liability should be a major impediment to reporting under TCFD Recommendations provided that the modelling adopts reasonable assumptions and inputs and discloses them in full. This can be achieved by making sure the disclosure is the product of a robust assessment of the best evidence available at the time”
Download the full speech here
"A review of the earnings call transcripts of S&P 500 companies in the past ten years revealed that "climate" and "weather" combined were among the most frequently discussed topics among executives, even more common than "Trump", "the dollar", "oil", and "recession”.
"Climate risks are risks to businesses and therefore need to be on the radar for boards of directors, David Singleton argues. "
"In another sign the corporate cop is closely focused on the issue, Mr Price also said ASIC was working on a review of how companies across the ASX 300 index disclosed information on climate change, and it planned to publish the findings later this year.”
Their analysis of home prices versus flood risk reveals that from 2007 to 2017, homes at “high” or “very high” risk of extreme flooding saw a 4.8 to 5.6 percent drop in price, while homes at the lowest risk saw an 8.4 to 9.6 percent rise.
“Meanwhile, back at home, the shambles that is Australian climate policy limps on, with some backbenchers as fossilised as their favourite fuel. Defying global trends, the government wound back the Renewable Energy Target, and we remain the only developed country to repeal a carbon price.”