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Climate Investment
Institute

Climate change is our most critical systemic challenge

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Investor Solutions and Climate Risk

As co-hosts of The Nest Summit at Climate Week NYC 2020, Jeff Gitterman and Vince Molinari of TheIMPACT TV interviewed noted climate experts, including several of our SMART Climate UMA (Unified Managed Account) partners. Check out these videos to hear from diverse voices leading the way to a more sustainable future.

Climate Risk and the Capital Markets

Spencer Glendon, Ph.D., Macroanalyst, Senior Fellow at Woodwell Climate Research Center and, Partner and former Director of Investment Research at Wellington Management, has greatly expanded our understanding of climate risk. In this video he explains the critical connection between climate change and the capital markets.

The global climate has been relatively stable for the last 10,000 years, enabling the establishment of agriculture and civil society. While stable capital markets are predicated on a stable world, climate change challenges our imaginative capacity as we head towards instability not accounted for in financial modelling.  How can market participants rise to the challenge of a future with vastly different rules?

Measuring Climate Investment Impact: Finding the Sharpest Tool in the ESG Shed

The U.S. is behind the curve when it comes to climate policy. However, recent EU policy changes will impact large U.S. asset managers that distribute their products through Europe.  Sarah Bratton Hughes, Head of Sustainability at Schroders explains how being a European company has helped Schroders stay ahead of the curve, and how their proprietary tools ensure they can effectively translate climate measures into financial measures, and identify where capital allocations are needed to align with the transition to a 2*C world.

Rating Physical Assets in the Face of Climate Change

The financial markets are increasingly accounting for the transition risks of climate change. However, as historic atmospheric emissions continue to persist, the effects are cumulative, and we face significant global warming in our future. Subsequently, physical risk and adaptation are getting more attention from data providers, ratings agencies, and investors. In this video, Yoon Hui Kim from 427, Swami Venkataraman of Moody’s, and Chris Goolgasian of Wellington Management explore how advanced data analysis can pinpoint physical risks, and how translating climate science into financial metrics informs credit ratings and portfolio decisions.

Municipal Bond Data and Climate Risk

Climate data is becoming more sophisticated at a rapid rate, and risQ is no exception. With a platform that combines physical climate risk alongside geo-spatial and social data, risQ shows how specific extreme weather risks such as floods, wildfires, and water scarcity may impact the municipal bond market. Andrew Teras of Breckenridge joins Chris Hartshorn of risQ to discuss how their municipal bond strategy incorporates this data into their investment process and why short-term bondholders need to care about climate change impacts.

Simulating Grounded Hope for the Climate: An Interactive Experience

Keeping global warming below 2*C requires a multitude of levers. Watch former Governor, Bill Ritter of the Center for the New Energy Economy (CNEE), Gerold Koch of DWS Group, and Andrew Jones of Climate Interactive, demonstrate how the potential outcomes of various policy, investment and innovation interventions could arrive at the goals of the Paris Agreement. A low carbon future is possible, but only with a systems-level approach that includes the entire global society.

Investing in Water and Climate Risk

According to Matt Diserio, CEO of Water Asset Management (WAM), water is the resource that will define the 21st Century. The water industry includes some of the most enduring companies, and the sector is only going to see greater investment as climate change affects this essential resource. WAM’s simple, but profound, water-focused impact metrics allow the firm to identify the companies and solutions that will increase water availability, and wastewater treatment, and drive energy efficiency in both.

Climate Risk Analysis and Financial Services: Best Practices

Investors and companies increasingly recognize the economic risks posed by climate change. The Climate Service, and its mission to “embed climate risk into every financial decision on the planet,” helps clients to understand how risks may unfold according to different scenarios. Globally, capital is already being allocated towards climate solutions and away from fossil fuels. Join Joseph Lake of The Climate Service to learn how the coronavirus pandemic has become a catalyst for companies looking to deepen their understanding of climate change impacts throughout the value chain, and how The Climate Service’s data offerings will evolve in the future.

Deeper Data on Institutional ESG Strategies

Evaluating the depth and sophistication of ESG and climate strategies requires specialist information. eVestment recently released a new questionnaire that helps institutional investors better understand the increasing amount of product available. Erika Spence shares her experience in collaborating across the ecosystem to ensure that the new questionnaire incorporates the evolving climate data landscape and the necessary nuance required for asset managers to demonstrate their differentiated philosophies and approaches.

Science & Investing: Addressing the Climate Imperative

Education is fundamental to establishing the common vocabulary and understanding needed to effectively invest with a climate lens. AllianceBernstein is building critical bridges between climate science and investment professionals. Their partnership with Columbia University supports internal education across their analyst teams, and their investment in proprietary technology enables tracking metrics and engagement activities across asset classes and regions. Sarah Rosner, Director of Environmental Research & Engagement, explains the firm’s journey and successes to date, and their plans to widen the audience for their educational initiatives.

Oceans in a Changing Climate

The oceans are a critical aspect of the climate system. Covering over 70% of the Earth’s surface, they have absorbed over 90% of human-driven warming. Valentina Germani is a Legal Officer at the U.N.’s Division for Ocean Affairs and the Law of the Sea. She explains the socioeconomic effects of sea level rise from ice melt and thermal expansion, and ocean acidification from carbon dioxide. Across the globe, coastal communities are affected by declining fish populations, land erosion, chronic flooding, and loss of revenues from tourism. In addition, some cultures find their spiritual sites and way of life at risk.

Climate Change & Shareholder Engagement

Investing with a sustainability lens sometimes includes divestment from entire sectors. Certainly, many fossil-fuel free investment products are now available. However, as all companies, regardless of sector, are exposed to climate change, Bruce Duguid and Mark Sherlock of Federated Hermes view shareholder engagement as the optimal means to steward the public markets towards a low-carbon future. Some heavier emitters such as oil and gas companies and utilities are committing to bold targets as they respond to the increasing “societal signal that the world needs to decarbonize.”

Managing Climate Risk in the U.S. Financial System

In September 2020, the Commodity Futures Trading Commission (CFTC) released a groundbreaking report, “Managing Climate Risk in the U.S. Financial System.” Calling for a carbon price, among other measures, the document stated that, “U.S. financial regulators must recognize that climate change poses serious emerging risks to the U.S. financial system, and they should move urgently and decisively to measure, understand, and address these risks.” CFTC Commissioner Rostin Behnam talks about his climate change journey and the importance of building broad coalitions to catalyze collaborative action.

Investing at the Intersection of Climate and Social Justice

Ivka Kalus of Promethos Capital explains that we cannot have climate justice without social justice, and vice versa. The “S” in ESG can often be overlooked, but the “S” aspect of the analysis (e.g. management team diversity), and employee treatment, directly impact the making of strategic decisions that impact the environment. The same communities that have been most adversely impacted by COVID-19 face negative impacts from climate change. Learn how COVID has exposed societal vulnerabilities that we need to address if we are to effectively prepare for, mitigate, and adapt to climate change.

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