Climate Progress Dashboard forecasts global warming of more than 4°C

Climate change will be a defining driver of the global economy, society and financial markets over the coming years, decades and beyond. Schroders has developed a Climate Change Dashboard to measure progress towards a decarbonised world.

Global temperatures are on course to rise by up to 4°C, twice as far as safe levels, according to a Climate Progress Dashboard developed by the Schroders Sustainability team.

The unique dashboard tracks the progress governments and industries are making towards meeting the 2°C temperature rise commitment global leaders made in the Paris Agreement, which came into force in November.

It looks past headline noise and rhetoric to provide an objective gauge of change across the breadth of fields that will matter to addressing the climate challenge.

How the dashboard works

The dashboard measures progress across political, industrial, technology and energy indicators, to create a unique, comprehensive view of change. The 12 individual indicators are shown below; some measure aspiration while others gauge action.

“Political ambition”, for example, captures the pledges governments have made to reduce carbon emissions. The dashboard points to a 2.8°C rise in temperatures based on current ambitions.

The dashboard also captures actual progress – the implementation of policies – under “political action”. Slower action here would lead to a 3.6°C rise in temperatures, underlining differences between headline statements and tangible action.

Least progress has been made on oil and gas production, which points to a rise of over 6°C, implying major changes will be needed to hit long term targets. Use of these fossil fuels will have to fall significantly in future, ultimately to zero.

Production of coal – typically cast as the villain of climate discussions – has already started falling, although not far enough to meet the two-degree target.

The full dashboard, designed for use by professional investors, also opens up to chart recent progress and scenarios of what it means for future trajectories of global warming.

The basic dashboard will be published quarterly at www.schroders.com/sustainability

Climate change dashboard

Why climate change should matter to investors

Andy Howard, Head of Sustainable Research, led the work on the dashboard. Here, he explains why it was developed:

“Climate change will be a defining driver of the global economy, society and financial markets over coming years, decades and beyond. While the issue has moved up investment agendas, the change in strategies has not kept pace.

“The danger is that investors think the problem is being tackled, and that their exposure to climate change risks is reduced, when this is not necessarily the case.

“We developed the Climate Progress Dashboard as part of our efforts to manage the risks and identify the opportunities climate change presents. It provides an objective and transparent view of change to help investors base decisions on the outcomes that are likely, rather than those they would like to see.

“It’s worth noting the dashboard is a snapshot of where we stand, not a forecast of where we will end. We are in the early stages of changes that will play out over several decades. Estimates could change quickly with small changes in direction over coming years.

“As a result, the dashboard conclusions must be seen as measures of the paths we are currently on, rather than conclusions on where we will end up.”

Andy Howard explains the dashboard in more detail in the video above.

The climate change challenge: a 30-second guide

Greenhouse gases (GHG), such as carbon dioxide, methane and nitrous oxide trap heat in the Earth’s atmosphere.

Emissions of these GHGs have grown in tandem with the world’s economic expansion, prompting a rise in temperatures. The late 1800s is usually taken as the pre-industrial baseline. Since then, atmospheric concentrations of GHGs have risen 50% from 270ppm to more than 400ppm. Average temperatures are up almost 1°C.

Scientific and political consensus has settled on 2°C as the acceptable limit for temperature rises, requiring concentrations to stay below 450ppm. On current trends, that limit will be breached within two decades.

Andy Howard said: “In short, there is no single silver bullet. Meeting global leaders’ commitment to limit temperature rises to two degrees over pre-industrial levels means cutting greenhouse gas emissions per person by 80% by 2050, a period in which global incomes are set to triple.

“This is not going to be easy. Every part of the global economy, every industry and every company will be affected to some extent. We need new ideas to make sure investors are prepared for those changes.”

Source: Schroders Sustainable Investment Team

Banks worth $7 trillion pledge to calculate costs of climate risks

TORONTO, July 11 (Thomson Reuters Foundation) – Eleven of the world’s biggest banks pledged on Tuesday to find out how much exposure they have to risks related to climate-change, a move backed by environmentalists who say better information on the costs of global warming will push lenders to transition towards green investments.

With more than $7 trillion under management, some of the biggest names in global finance have signed onto the United Nations-backed disclosure effort for information on new risks presented by climate change.

Information on banks’ climate risks could eventually be reviewed by regulators as part of their financial disclosures, said Simone Dettling, a researcher with the U.N. Environment Programme working on the transparency plan.

“The goal is to shift lending away from carbon intensive sectors that are becoming risky towards green technologies that are becoming more attractive,” Dettling told the Thomson Reuters Foundation in a phone interview.

Before banks can change their lending patterns they need to understand how their portfolios will be impacted by climate change. Most currently do not have this information, Dettling said.

“They have committed to finding these numbers,” she said of the voluntary scheme.

Once banks have information on their exposure to climate risks they can begin disclosing how these risks will impact investors while looking for new sustainable alternatives, she said.

That disclosure could happen within the next year, she said, although banks and U.N. officials are still hammering out the details.

Information on investments in fossil fuel firms, renewable energy businesses and transportation companies is likely to be among the data disclosed as part of banks’ climate-risk assessments, Dettling said.

Banks backing the plan for new research into climate risks include ANZ, Barclays, Bradesco, Citi, Itaú, National Australia Bank, Royal Bank of Canada, Santander, Standard Chartered, TD Bank Group and UBS, said the U.N. Environment Programme.

“The scale and sophistication of climate risk and opportunity continue to grow,” Citi Bank spokesman Ed Skyler said in a statement on Tuesday.

“Working together to refine our approaches to enhanced disclosure will help accelerate the transition to a low-carbon economy.”

Reporting by Chris Arsenault @chrisarsenaul, Editing by Ros Russell.; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking, property rights, climate change and resilience. Visit http://news.trust.org)

After The Storm: The Rising Risk Of Floods

Natural disasters and extreme weather events are on the rise. The impact of droughts, extreme temperatures, hurricanes and wildfires have all increased over the last 60 years. But it is floods that has taken the biggest toll on the world in recent times.

According to the UN Office for Disaster Risk Reduction (UNISDR), flooding accounted for 43 percent of all natural disasters between 1995 and 2015. In this period, there were over 3,000 flood disasters, affecting around 2.3 billion people.  In 2016 alone, flood peril caused $62 billion worth of damage worldwide.

In its The Human Cost of Weather Related Disasters report, UNISDR warns that the impact of flood disasters is becoming more severe, affecting ever wider areas while the population living in these vulnerable regions rapidly rises.

The likely rise in sea levels due to climate change will further exacerbate this threat. Scientists predict that there will be a 10cm-20cm rise in sea levels by 2050, doubling the frequency of coastal flooding across the tropics.

This is particularly a threat in lower and middle-income countries where socio-economic development has seen mass urbanization and deforestation. It is no surprise that of the 20 cities most vulnerable to flooding, 14 are in the developing world, five of which are in China and four in India. These countries are also vulnerable to weather-related flooding, especially in the summer months as rainy season and tropical storms like the annual Atlantic hurricanes hit, devastating communities. But the developed world can also be hit hard – in August 2016, floods in the U.S. cost $10-15 billion in economic damage, while the floods that hit northern Europe earlier that summer caused damage in excess of $5 billion.


In Depth

A serious flooding event impacts society on many levels, both in the short-term devastation it causes and the long-term recovery that follows. And the consequences of floods are often hard to predict.

“The ripple effects are tremendous,” says John Dickson, President of NFS Edge Insurance, Aon. “When you think about a flood impacting a community, it is not just property that is damaged – everyone is affected. Where are you going to get groceries for your family? How do delivery trucks or emergency vehicles get to the area when the roads are washed away?

“The impact of floods extends far beyond risk of loss to physical structure and threatens the infrastructure that enables the daily interaction of individuals and makes communities possible.”

This may mean long-term disruptions not only to a community’s transportation network but also its supplies of clean water, food, electricity, and communications. This in turn can lead to disease, malnourishment, and further long-term human consequences that can have an economic impact far beyond short-term supply chain and business interruption.

The Economic Cost

The financial impact of flooding also continues to grow. Beyond the initial damage to property, destruction of crops, or loss of livestock, the long-term economic costs can be wide-ranging and hard to predict.

Damage to public infrastructure affects a far greater proportion of the population than those directly inundated by the flood. Loss of livelihoods, reduction in purchasing power and loss of land value in flood zones can leave whole communities economically vulnerable.

Aon estimates that global natural disasters in 2016 combined to cause economic losses of $210 billion, an amount 21 percent above the 16-year average of $174 billion. Flood peril alone caused $62 billion worth of damage – on top of the $560 billion in economic losses caused by floods between 2006 and 2016. This makes flooding the most expensive type of natural disaster over the last decade.

It is of course the most densely populated areas that suffer the largest economic impact. The costliest weather event of 2016 was the summer floods along the Yangtze River basin in China, which caused damage of upwards of $28 billion. The floods threatened up to 80 million people.

On the other side of the globe, in the past 15 years we have seen the two costliest natural disasters in U.S. history during the Atlantic hurricane season. In 2012 Superstorm Sandy caused an estimated $65 billion in damage, while the cost of Hurricane Katrina in 2005 is believed to be greater than $100bn.

 The Humanitarian Cost

The greatest toll of a flood disaster on society is always any loss of life that might occur. As the world’s population grows and becomes increasingly centered in large cities, the potential for a humanitarian catastrophe grows.

The UNISDR estimates that between 1995 and 2015, 157,000 people died as a result of floods, and that death tolls from flooding rose in many parts of the world during this period. In 2007, floods killed 3,300 people in India and Bangladesh alone. In 2010, flooding killed 2,100 people in Pakistan and another 1,900 in China, while in 2013 some 6,500 people died due to floods in India.

While floods strike Asia and Africa more than other continents, they pose an increasing danger elsewhere. In South America, for example, 560,000 people were affected by floods on average each year between 1995 and 2004. By the following decade (2005-2014) that number had risen to 2.2 million people, nearly a four-fold increase.

Rapid urbanization in these regions has significantly increased surface run-offs, while recurrent flooding of agricultural land, particularly in Asia, has taken a heavy toll in terms of lost production, food shortages and undernourished people in rural areas.

In rural India, for example, children in households exposed to recurrent flooding have been found to be more stunted and underweight than those living in non-flooded villages. Children exposed to floods in their first year of life also suffered the highest levels of chronic malnutrition due to lost agricultural production and interrupted food supplies.

Managing The Risk

The nature of the flood peril is highly changeable, with flash floods, acute river and coastal flooding increasingly frequent.

But new data tools, analytics and modelling help us to improve our predictions and prepare for and mitigate these events. The highly flood-prone country of Cambodia is one region where these new tools have been put to good use.

By analyzing flood patterns along the Mekong River delta and combining them with a range of other key risk indicators from topography to population to soil saturation levels, sophisticated analytical tools have been able to help relief workers better predict where the worst of the flooding is going to be and provide a more effective response. Similarly, sophisticated analytics are also beginning to be used by insurers to get a more accurate understanding of the likely impact of flooding on businesses and individual properties, improving pricing and community resilience.

Even companies such as Facebook are forward-thinking how their platforms can use data collected from users to help communication during disasters. The social network recently introduced ‘disaster maps’ to help organizations better respond when such events occur

Ultimately, as the world’s population continues to grow and is increasingly centered in vulnerable urban areas, the risk and impact of flooding will inevitably rise. The number of people affected by river flooding around the world could almost triple over the next 15 years to 54 million because of climate change and population growth.

As Steve Bowen, Director & Meteorologist at Aon, points out: “The combination of more people, more vulnerable exposure and more intense weather events poses a unique challenge for the insurance industry and beyond.” And the ability to cope with the growing risks that each of these factors bring will be key, as “flooding, both coastal and inland will remain as one of the riskiest perils.” If these trends continue, Bowen further explains, it is increasingly likely that we will see further growth of catastrophe losses around the world on an economic and insured scale for all perils – not just flood.”


Talking Points

“The rapid growth of urban populations along the world’s coastlines – a result of natural population growth and economic migration – combined with the increasing threats from climate change, are set to expose more than a billion people to coastal flooding by 2060.” –Dr Alison Doig, Christian Aid

“Even small changes in mean sea level can significantly increase the frequencies with which critical thresholds are exceeded. For coastal communities that means they need to adapt in order to prevent flood events from happening much more often.” – Thomas Wahl, professor of coastal risks at the University of Central Florida

“Talk to any flood industry participant, be it policymakers, FEMA officials or insurance companies, and (regrettably) they will be able to recite one of the best-kept secrets in the country: flooding is the most catastrophic and costly natural disaster in the United States.” – Louis Hobson, CEO of Aon National Flood Services (NFS)  


Further Reading

Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures (June 2017)

TCFD Recommendations Report Launch

The Task Force released its final Recommendations report and supplemental materials on Thursday, June 29, 2017.

The Task Force previously released its draft Recommendations Report in December 2016. The draft report was made available for a 60-day public consultation period. The public consultation period closed on February 12, 2017. A summary of the public consultation findings is available here.

Statement of Support and Supportive Companies

The final Recommendations report of the TCFD received support from over 100 businesses spanning numerous industries globally, which collectively signed our statement of support. The statement and full list of companies can be found here.

Our Mission

The Task Force on Climate-related Financial Disclosures (TCFD) will develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders.

The Task Force will consider the physical, liability and transition risks associated with climate change and what constitutes effective financial disclosures across industries.

The work and recommendations of the Task Force will help firms understand what financial markets want from disclosure in order to measure and respond to climate change risks, and encourage firms to align their disclosures with investors’ needs.

Learn more about the Task Force

Task Force publishes recommendations on climate-related financial disclosures

The Financial Stability Board (FSB) has welcomed the publication of the recommendations for effective disclosure of climate-related financial risks published today by the industry-led Task Force on Climate-related Financial Disclosures (TCFD).

The Task Force, chaired by Michael R. Bloomberg, was established by the FSB in December 2015 to develop a set of voluntary, consistent disclosure recommendations for use by companies in providing information to investors, lenders and insurance underwriters about their climate-related financial risks. The 32 industry members of the Task Force, who are drawn from a wide range of industries and countries from around the globe, finalised the recommendations after extensive public engagement and consultation, including public consultation on a draft of the recommendations in December 2016.

The TCFD developed four recommendations on climate-related financial disclosures that are applicable to organisations across sectors and jurisdictions. The recommendations are structured around four thematic areas:

  • Governance: The organisation’s governance around climate-related risks and opportunities.
  • Strategy: The actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning.
  • Risk Management: The processes used by the organisation to identify, assess and manage climate-related risks.
  • Metrics and Targets: The metrics and targets used to assess and manage relevant climate-related risks and opportunities.

Speaking about the work of the Task Force, FSB Chair Mark Carney said “The Task Force’s recommendations have been developed by the market for the market. They set out the disclosures that a wide range of users and preparers of financial filings have said are essential to understanding a company’s climate-related risks and opportunities. Widespread adoption will provide investors, banks and insurers with that information, helping minimise the risk that market adjustments to climate change will be incomplete, late and potentially destabilising.”

Speaking about the final recommendations, Michael R. Bloomberg said “Climate change presents global markets with risks and opportunities that cannot be ignored, which is why a framework around climate-related disclosures is so important. The Task Force brings that framework to the table, helping investors evaluate the potential risks and rewards of a transition to a lower carbon economy. We’re pleased to see so many businesses and investors around the world support the recommendations of the TCFD and hope others will be encouraged to join our initiative.

More than 100 firms, with market capitalisations of over $3.3 trillion and financial firms responsible for assets of more than $24 trillion, have provided statements of support to welcome the recommended disclosures and encourage take-up of the TCFD recommendations.

Notes to editors

More information on the work of the Task Force and its membership, as well as companies’ statements of support, are available the TCFD website. In developing the recommendations, the Task Force received over 500 public consultation responses and held 18 outreach events with over 1,250 participants,as it sought feedback.

For more details on the publication of the report please contact Vero Henze at the TCFD Secretariat at: vhenze@bloomberg.net.

The FSB has been established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with 65 other jurisdictions through its six regional consultative groups.

The FSB is chaired by Mark Carney, Governor of the Bank of England. Its Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

Disaster alley: Climate change, conflict and risk

This report looks at climate change and conflict issues through the lens of sensible risk-management to draw new conclusions about the challenge faced in Australia. These climate change risks are either not understood or wilfully ignored across the public and private sectors, with very few exceptions, and include climate-driven humanitarian crises, forced migration, political instability and conflict. The Australian government must ensure Australian Defence Force and emergency services preparedness, mission and operational resilience, and capacity for humanitarian aid and disaster relief, across the full range of projected climate change scenarios.

Recommendations made include:

  • Establish a top-level climate and conflict task-force in Australia to urgently examine the existential risks of climate change and develop risk-management techniques and policy-making methodologies appropriate to the challenge.
  • Build international processes that specifically recognise and formulate the practical steps necessary for a coordinated, global climate emergency response based on a sound, existential risk-management approach.
  • Launch an emergency-scale initiative to decarbonise the Australian economy no later than 2030 and build the capacity to draw down carbon dioxide from the atmosphere while protecting food-growing capacity.
  • Build more resilient communities in the most vulnerable nations by high-level financial commitments and development assistance; build a flexible capacity to support communities in likely hotspots of instability and conflict.
  • Ensure all levels of government and civil society organisations are prepared for the impacts of projected climate change. Ensure Australian Defence Force preparedness, their mission and operational resilience, and their capacity for humanitarian aid and disaster relief, is adequate across the full range of projected climate change scenarios.
  • Establish a national leadership group outside conventional politics, drawn from across society, charged with implementing the national climate emergency program.

The Asia–Pacific region, including Australia, is considered to be “Disaster Alley” where some of the worst impacts will be experienced. Building more resilient communities in the most vulnerable nations by high-level financial commitments and development assistance can help protect peoples in climate hotspots and zones of potential instability and conflict. The report posits that Australia’s political, bureaucratic and corporate leaders are abrogating their fiduciary responsibilities to safeguard the people and their future well-being, and contends that they are ill-prepared for the real risks of climate change at home and in the wider region.

Download here: https://docs.wixstatic.com/ugd/148cb0_1d614b99bd734626a0deba96f8d843d4.pdf

Source(s):  National Centre for Climate Restoration (Breakthrough)