Climate Risk Podcast

Hear from Dr. Jakob Thomae, Project Director for the Inevitable Policy Response, as we discuss their latest forecast and what it means for the transition to net-zero. Scenario analysis is the natural tool for anyone wanting to understand how climate-related risks might evolve over coming decades. The vast majority of climate scenarios, regardless of who produced them or what level of warming they predict, tend to report similar levels of physical risk over the next couple of decades or so. However, predictions about transition risk tend to be quite different between scenarios. This episode focuses in on the transition, and in particular the extraordinary work being done by the Inevitable Policy Response (IPR) to figure out the most likely course of the transition to net zero. We'll explore: · The IPR's surprisingly optimistic forecast, and they believe the world might look like by the end of the century; · The methodology behind their forecast, and how it differs from the scenarios produced by other groups; and · What this forecast means for risk and finance professionals. To find out more about the Sustainability and Climate Risk (SCR®) Certificate, follow this link: https://www.garp.org/scr For more information on climate risk, visit GARP's Global Sustainability and Climate Risk Resource Center: https://www.garp.org/sustainability-climate If you have any questions, thoughts, or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com Links from today's discussion: The Inevitable Policy Response: https://ipr.transitionmonitor.com/ Theia Finance Labs (formerly known as the 2° Investing Initiative): https://theiafinance.org/ Jakob's first book, 'The Kill Score: On the Trail of Our Ecological and Social Footprint': https://rb.gy/ydnxvu Paris Agreement Capital Transition Assessment (PACTA): https://pacta.rmi.org/ The International Energy Agency (IEA): https://www.iea.org/ How Bad are Bananas? by Mike Berners-Lee: https://howbadarebananas.com/ Jakob's second book, 'The Little Book of Big Risks: From Atomic Bombs to a Zombie Apocalypse': https://rb.gy/8lk1no Speaker's Bio Dr. Jakob Thomae, Project Director, Inevitable Policy Response Jakob Thomae is one of the leading global experts on sustainable finance and long-term risks. In June 2023, Jakob was appointed Project Director for the Inevitable Policy Response (IPR), a climate transition forecasting consortium commissioned by the Principles for Responsible Investment. The IPR helps investors navigate the risks and opportunities arising from climate policy acceleration, volatility and transition. Jakob is the co-founder of Theia Finance Labs (formerly known as the 2° Investing Initiative) where he currently serves as Research Director. Jakob is also Professor in Practice at SOAS, University of London, where he teaches a Green Finance course. His recent book "The Kill Score" explores the impact of sustainability on human lives. Jakob has served as advisor to central banks around the world including the Japanese Financial Services Agency, the Brazilian Central Bank, the Bank of Thailand, the Bank of England, the Bundesbank, the Dutch Central Bank, and EIOPA. He holds a PhD in Finance from the Conservatoire National des Arts et Metiers.

Thomas Vaassen, Co-Founder and CEO of Meridia, discusses the challenges of obtaining accurate data on property rights in remote locations for supply chain transparency under the EU Deforestation Directive. He also explores the risks of non-compliance, the importance of reliable data, and the need for investments in making supply chains visible.

Hear from Jo Paisley and Maxine Nelson of the GARP Risk Institute as they look back on key learnings from the latest season of the Climate Risk Podcast. As we head into 2024, Jo and Maxine look back at the past year of Climate Risk Podcasts, reviewing key learnings from our guests and discussing ongoing trends in climate risk management. From academics to ambassadors, CEOs to entrepreneurs, we've upheld our promise to showcase a variety of different perspectives on climate risk and sustainability. This episode re-examines the rich knowledge that has been shared on the Climate Risk Podcast over the last 12 months, creating a narrative of climate and nature risk wisdom to guide our listeners through this fast-moving field. So, today's episode will explore: What we've learnt about the physical risks associated with climate change and nature loss; The key risks that arise in the transition to a net-zero world; and How financial firms are managing these risks. To find out more about the Sustainability and Climate Risk (SCR®) Certificate, follow this link: https://www.garp.org/scr For more information on climate risk, visit GARP's Global Sustainability and Climate Risk Resource Center: https://www.garp.org/sustainability-climate Links to featured episodes: David Schimel and Pooja Khosla - Bridging the Gap between Climate Science and Risk Management Dr. Erica Thompson - The Power and Pitfalls of Models in Climate Risk Management Rohan Hamden - Why Extreme Climate Physical Risks Are Closer Than You Might Think Mike Azlen - The Future of the Carbon Markets Explained for Risk Professionals Dr. Nicola Ranger - Balancing Mitigation and Adaptation: Insights for the Financial Sector Simon Zadek - TNFD and Beyond: An Introduction to Nature in Finance Professor Jo Handelsman - Soil: An Invisible Crisis and Massive Climate Opportunity Nigel Topping - The COP28 Survival Guide: How it Works and What to Expect Jane Stevensen - License to Drill: What New Oil & Gas Extraction Means for the Energy Transition Nicky Dee - From Startup to Sustainability: Innovating For The Climate Emergency Natalia Dorfman - Powerful Risk Management: Insurance Foundations for High-Integrity Carbon Markets Carys Taylor - How Film and Television Are Adapting to Climate Change Chris Howland and Lars Popken - Embedding Climate Within Risk Management: A Practitioner's Guide Ron Dembo - Dealing with Uncertainty in Scenario Analysis: Stochastic vs. Deterministic Approaches Also discussed in this episode: GARP Whitepaper - Biodiversity Loss: An Introduction for Risk Professionals Today's Speakers Jo Paisley, President, GARP Risk Institute Maxine Nelson, Ph.D, Senior Vice President, GARP Risk Institute

Hear from Dr. Erica Thompson, as we examine the modelling ecosystem and when we need to escape it to make real-world decisions. Climate science – like many areas of our lives, such as economics or public health – is based upon models. These models are often used to justify certain courses of action, such as investments in climate mitigation or adaptation, or even lock downs during the pandemic. But what makes a 'good model'? Is it purely how well it forecasts? Or are there other aspects that we need to consider, such as reliability, complexity, and how well it deals with uncertainty? And who gets to decide how good a model is? In this episode, we'll take a closer look at these questions and explore some of the nuances of models, including: · How to judge how good a model is, · The vital importance of understanding the values which underpin models · And how models have the power to shape the very future which they forecast. To find out more about the Sustainability and Climate Risk (SCR®) Certificate, follow this link: https://www.garp.org/scr For more information on climate risk, visit GARP's Global Sustainability and Climate Risk Resource Center: https://www.garp.org/sustainability-climate If you have any questions, thoughts, or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com Links from today's discussion: Praise for Escape From Model Land: https://www.ericathompson.co.uk/books/ IPCC Working Group III 2022 Mitigation of Climate Change report: https://www.ipcc.ch/report/ar6/wg3/downloads/report/IPCC_AR6_WGIII_SummaryForPolicymakers.pdf Yale's William Nordhaus wins 2018 Nobel Prize in Economics: https://news.yale.edu/2018/10/08/yales-william-nordhaus-wins-2018-nobel-prize-economic-sciences Speaker's Bio Erica Thompson, Associate Professor of Modelling for Decision Making at UCL's Department of Science, Technology, Engineering and Public Policy Erica's book, Escape from Model Land: How Mathematical Models Can Lead Us Astray and What We Can Do About It, was published in December 2022 and was shortlisted for Best Maths Book of 2022 by Chaulkdust Magazine, a specialist magazine for mathematicians. Erica moved into her current role in April 2023, where she investigates the appropriate use of mathematical modelling to support real-world decisions, from mathematical and statistical questions about methodologies of inference from models, to psycho-social questions about the formation of confidence and the role of expert judgement. Erica is also a Fellow of the London Mathematical Laboratory, where she leads the research programme on Inference from Models, and is a Visiting Senior Fellow at the LSE Data Science Institute. Erica previously held a series of roles at the LSE's Centre for the Analysis of Time Series, initially as a Senior Policy Fellow, and subsequently as Co-Director and Acting Director. Erica holds a BA in Experimental and Theoretical Physics and a Master of Mathematics degree from Cambridge University. She completed her PhD in Physics at Imperial College London.

Explore the intersection of climate science and risk management. The underplaying of extreme risks in climate change predictions, challenges of translating climate science into actionable financial risk data, implications of transition risk in investment strategies, limitations of climate science on projecting local impacts, and the importance of taking a holistic approach to evaluating climate risk.

The podcast explores the intersection of nature and finance, discussing the challenges and opportunities of incorporating nature risk into risk management. It highlights the importance of getting nature taken into account alongside the carbon agenda and the potential consequences of climate change. The chapter also offers advice and inspiration to risk professionals in the finance industry, emphasizing the need for education on sustainability and focusing on shaping the future.

Nigel Topping, Former UN Climate Change High-Level Champion for COP26, sets the scene for COP28 in Dubai. He discusses the successes and shortcomings of the COP mechanism, the complex ecosystem of stakeholders, and the headline issues to be resolved. The podcast explores topics such as the significance of the Paris Agreement, controversies surrounding oil lobbyists at COP conferences, missed opportunities in addressing climate change, and navigating exponential change towards net zero by 2030.

Hear from Ron Dembo, Founder and CEO of riskthinking.ai, as we apply stochastic thinking to the challenge of climate scenario analysis. One of the most difficult aspects of managing climate risk is its inherent uncertainty. Because we can't know with absolute confidence what our future climate, economy or society will look like, we therefore can't know exactly when, where, or how intensely climate risks will manifest. A technique commonly applied to this problem is scenario analysis. By building a picture of what the future might look like, firms can formulate risk management strategies appropriate for that scenario. However, today's guest believes we're only scratching the surface of what scenario analysis can do for our financial institutions. In today's episode, we'll home in on the idea of stochastic scenario analysis; what it is, how it works, and what makes it different to the traditional approach to scenario analysis. We'll explore: · The difference between deterministic and stochastic scenario analysis; · The advantages of using large sets of scenarios generated by expert judgment; and · What stochastic scenario analysis means for risk professionals. To find out more about the Sustainability and Climate Risk (SCR®) Certificate, follow this link: https://www.garp.org/scr For more information on climate risk, visit GARP's Global Sustainability and Climate Risk Resource Center: https://www.garp.org/sustainability-climate If you have any questions, thoughts, or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com Links from today's discussion: · https://riskthinking.ai/ Speaker's Bio Ron Dembo, Founder and CEO, riskthinking.ai Ron is an academic, author, entrepreneur, and consultant to the some of the world's largest corporations and banks. He has had a distinguished academic career as a professor at Yale University and as visiting professor at MIT. He is a Lifetime Fellow of The Fields Institute for Research in Mathematical Sciences, and has received numerous awards for his work in mathematical optimization, finance, and climate change. Ron was previously the Founder and CEO of Algorithmics, an enterprise risk management software provider with over 70% of the world's top 100 banks as clients. After Algorithmics was acquired by Fitch Group, Ron later founded riskthinking.ai, a company pioneering the use of stochastic analysis to accurately price climate risk into the financial markets.

This podcast discusses the UK government's controversial decision to grant new oil and gas licenses in the North Sea despite a commitment to reach net zero by 2050. It explores the need for solutions to manage risks during the transition. The speaker shares their career background in the oil and gas industry, climate reporting, and consultancy. Concerns over the decision to issue new licenses and backsliding in transitioning away from fossil fuels are highlighted. The importance of addressing climate-related risks for businesses and the urgency of action and effective communication for risk professionals are also discussed.

Explore the importance of risk taxonomies in managing climate risks. Understand the categories of climate risks, including physical risks and transition risks. Discuss the inclusion of natural capital risks, such as the depletion of water and topsoil. Examine the unsustainability of our economic model and subsidies in the fossil fuel industry. Highlight the significance of a climate risk taxonomy and the next steps for quantifying these risks.