Climate Risk Podcast

Hear from Alan Smith, First Church Estates Commissioner, about the culture and capabilities that asset owners look for in the companies they invest in. Asset owners have a fiduciary duty to act in the best interests of their ultimate beneficiaries, which often forces them to take a longer-term perspective than many other types of financial firms. So, it’s not surprising that many of them are concerned about the systemic nature of climate risks.  Many are proactively engaging with firms in the real economy to encourage the right culture and capabilities to steer their companies to net zero.  In this episode we talk about some of the key dilemmas currently facing asset owners: How should they assess firms’ commitments to net zero and their underlying purpose and values? How should they decide when and how to engage with firms? And when is it best to divest? Links from today’s discussion: IPCC Sixth Assessment Report: Impacts, Adaptation and Vulnerability Engine NO.1 Coalition for Climate Resilient Investment Glasgow Financial Alliance for Net-Zero GARP Climate Risk Podcast with Meryam Omi GARP Climate Risk Podcast with Sir Dieter Helm Speaker’s Bio Alan Smith – First Church Estates Commissioner, Church of England Alan Smith’s career spans 35 years in risk management, finance, investment banking and advisory roles at HSBC and KPMG.  He held various positions at HSBC, including Global Head of Risk Strategy, and helped shape the bank’s global approach to sustainability and climate risk management. He was recently appointed First Church Estates Commissioner – an appointment that is approved by the Queen herself.  In this role, he chairs the Church Commissioners' Assets Committee, which is responsible for the strategic management of a £9.2 billion investment portfolio.

Hear from Mark Campanale, Founder of the Carbon Tracker Initiative, as we dive into the strategies being used to align financial markets to a net-zero economy. Global financial markets play a major role in addressing the challenges of climate change. But is the financial system equipped with the right tools to progress the net-zero transition with the urgency that is required? Are current strategies, such as the TCFD disclosures framework and the EU Taxonomy likely to get us to net-zero, or do we need to think more radically? In this episode of the Climate Risk Podcast, guest Mark Campanale shares his thoughts on the latest developments in the world of sustainable finance, including: Why focusing on disclosures only addresses one part of the sustainable finance issue The limitations of demand-side policy interventions and the need for supply-side restrictions What McKinsey & Co. got wrong about the cost of the net-zero transition Links from today’s discussion: The Beyond Oil and Gas Alliance The Fossil Fuel Non-Proliferation Treaty Carbon Tracker: A Tale of Two Share Issues McKinsey & Company: Net-Zero Transition Report INET Oxford: Going Big and Fast on Renewables Could Save Trillions BloombergNEF: ‘Green’ Hydrogen to Outcompete ‘Blue’ Everywhere by 2030 InfluenceMap: Lobbying on the EU Taxonomy’s Green Criteria Carbon Tracker: ‘Flying Blind’ Report – Look out for GARP’s upcoming webcast with the report’s author, Barbara Davidson. Speaker Bio Mark Campanale – Founder and Executive Chairman of the Carbon Tracker Initiative Mark is the Founder of the Carbon Tracker Initiative and author of the “unburnable carbon” thesis. More recently, Mark has co-founded Planet Tracker, focusing on natural resource-based industries, and Industry Tracker, focusing on the materials sector. Prior to forming these groups, Mark had 25-years’ experience in sustainable financial markets, working for several major asset managers.  He is a co-founder of some of the earliest responsible investment funds, firstly at Jupiter Asset Management in 1989 with their ‘Ecology Funds’, and then with Henderson Global Investor’s ‘Industries of the Future’ Funds. Mark has also served on many different sustainable finance forums, including the World Business Council for Sustainable Development, leading up to the 1992 Earth Summit. Mark is also a Visiting Lecturer at the University of Cambridge’s Institute for Sustainability Leadership.

Amidst growing concerns over the sustainability of space-based technologies, Chris Geiger explains his firm’s strategy for overcoming the many challenges at this frontier of engineering. Space-based technologies are an increasingly important part of the global infrastructure and — like all of Earth’s resources — should be managed sustainably. This episode serves as a prime example of how firms can embed long-term thinking, resilience, and adaptability into their corporate structure, and how this can help reduce the impact of risks from climate change and environmental degradation. Today’s episode will explore: The challenges facing space-based technologies today and in the future The role of resilient engineering design in environmental sustainability The importance of effective governance structures for sustainable business strategies Links from today’s discussion: Article on Lockheed Martin tech innovations Details of Chris Geiger’s paper on space sustainability For more information on climate risk, visit GARP’s Climate Resources Hub: https://climate.garp.org/ If you have any questions, thoughts, or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com ------------------ Speaker’s Bio Chris Geiger – Internal Audit Director at Lockheed Martin Over his 20-year career with Lockheed, Chris has held leadership positions across Engineering, Enterprise Risk Management, and Sustainability. In his current role, he leads the global internal audit function, evaluating corporate risk exposure and governance strategies. Chris is also a board member for the MidFlorida Credit Union and is a vice-chair of the International Astronautical Federation Enterprise Risk Management Committee. He has also served on governmental advisory boards relating to emergency planning and housing in Florida.

As we head into 2022, Jo and Maxine look back at the past year of Climate Risk Podcasts, reviewing key learnings from our guests and discussing recent trends in climate risk management. From lawyers to professors, regulators to entrepreneurs, we’ve had a great variety of guests talk about a wide range of topics over the last year. 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 risk wisdom to guide our listeners through this fast-moving field. So, today’s episode will explore: What we’ve learnt about the scale and nature of climate risks How mitigation and adaption strategies are evolving, and what capabilities risk professionals must develop to manage these risks more effectively What to expect as a sustainability and climate risk professional in 2022   Links from today’s discussion: Net Zero Article: https://climate.garp.org/insight/making-sense-of-cop26-a-short-guide-to-the-why-when-and-how-of-reaching-net-zero/ Sustainable Bonds Article: https://climate.garp.org/insight/sustainable-bonds-understanding-this-growth-area/ Sixth IPCC Report: https://www.ipcc.ch/report/sixth-assessment-report-working-group-i/   For more information on climate risk, visit GARP’s Climate Resources Hub: https://climate.garp.org/ If you have any questions, thoughts, or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com   ------------------   Speaker Bios Jo Paisley, President, GARP Risk Institute (GRI), has worked on a variety of risk areas at GRI, including stress testing, operational resilience, model risk management and climate risk. Her career prior to joining GARP spanned public and private sectors, including working as the Director of the Supervisory Risk Specialist Division within the Prudential Regulation Authority and as Global Head of Stress Testing at HSBC. Maxine Nelson, Senior Vice President, GARP Risk Institute (GRI), currently focusses on climate risk management. Previous roles have included operational risk modelling at NAB, leading KMPG London’s credit risk team, senior consultant at Oliver Wyman, responsibility for counterparty credit risk at the UK Financial Services Authority, and Global Head of Wholesale Risk Analytics and Head of Capital Planning at HSBC.

By their very nature, it can be extremely difficult to capture the truly disastrous potential of the tail risks associated with climate change. Additionally, the growing complexity of human and natural systems means that tail risks will continue to arise in unexpected and novel ways. In today’s episode, we’ll explore a new perspective on understanding and assessing tail risks, and how we can build resilience to these threats within organizations and at the societal level. So, today’s episode will explore: Why the risks associated with even 2.0oC warming are greater than you might think How climate risks are transmitted through, and amplified by, our interconnected economy How risk professionals can best prepare for the complex and unpredictable risks of climate change Links from today’s discussion: Climate change risk assessment 2021: Chatham House’s research publication detailing the consequences and systemic cascading risks likely from climate change - https://www.chathamhouse.org/2021/09/climate-change-risk-assessment-2021 UK Climate Risk Independent Assessment (CCRA3) Technical Report: The UK Climate Change Committee’s independent analysis of the risks and opportunities for the UK - https://www.theccc.org.uk/publication/independent-assessment-of-uk-climate-risk/ For more information on climate risk, visit GARP’s Climate Resources Hub: https://climate.garp.org/ If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com ------------------ Tim Benton, Research Director, Chatham House and Professor of Population Ecology, University of Leeds Tim joined Chatham House in 2016, where he now leads the Environment and Society Programme. He also holds active roles as a both a professor and as Dean of Strategic Research Initiatives at the University of Leeds. His research focuses on global food security, food systems and resilience, and natural resource management. From 2011 to 2016, Tim was the ‘champion’ of the UK’s Global Food Security programme. He has also been a contributing author for the IPCC and has more than 150 published academic papers to his name.

Many of the financial risks that will arise from the transition towards a net-zero economy will be determined by what climate-related policies are enacted, the speed with which policymakers act, and how the economy evolves in response to these policies. Given economics’ critical role in policymaking, the economist’s perspective on climate change provides insights into how these policy options might evolve, helping risk professionals to better identify and assess financial risks associated with the transition to net-zero. So, today’s episode will explore: How economics shapes climate policy, and how climate policymaking shapes the economy How well climate change is incorporated into economists’ thinking, models, and policymaking guidance How economics needs to evolve to fully address the risks from climate change Links from today’s discussion: Harvard University’s interdisciplinary approach to climate change: https://climatechange.environment.harvard.edu/home#section3  Keep Climate Policy Focused on The Social Cost of Carbon - Jim’s article on the ‘social cost of carbon’ vs. ‘cost-effectiveness’ approaches: https://www.science.org/doi/10.1126/science.abi7813  The United States’ Renewable Fuel Standard Program: https://www.epa.gov/renewable-fuel-standard-program/overview-renewable-fuel-standard  For more information on climate risk, visit GARP’s Climate Resources Hub: https://climate.garp.org/  If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com  ------------------ Jim Stock, Professor of Political Economy and Vice Provost for Climate and Sustainability at Harvard University Jim’s current research includes energy and environmental economics with a focus on fuels and on US climate change policy. From 2013-2014, Jim served as a Member of President Obama’s Council of Economic Advisers, where his portfolio included macroeconomics and energy, and environmental policy. From 2007-2009, he was Chair of the Harvard Economics Department, and he holds a Doctorate in Economics from the University of California, Berkeley.

Against a backdrop of increasing societal awareness and improved scientific understanding of climate change, many stakeholders regard the law as an important tool to hold firms and governments to account and drive forward the green agenda. Since the Paris Agreement in 2015, there has been a significant rise in the number of climate-related litigation cases, increasing the legal jeopardy and reputational risk for firms navigating the transition. That’s why this episode will: Provide a framework for understanding the emerging legal landscape around climate change Address what factors are driving this increase in litigation Explore the risk implications for firms navigating the transition Links from today’s discussion: Clyde & Co’s Climate Resilience Hub – Providing insights on the key current and future high-impact risks and liabilities challenging the resilience of organisations across sectors: https://www.clydeco.com/en/insights/resilience/climate-change The Geneva Association’s Climate Litigation Report: https://www.genevaassociation.org/research-topics/climate-change-and-emerging-environmental-topics/climate-litigation  The Shell CEO podcast interview (Outrage + Optimism): https://podcasts.apple.com/no/podcast/climate-fossil-fuels-and-the-future-of-shell/id1459416461?i=1000527676936 For more information on climate risk, visit GARP’s Climate Resources Hub: https://climate.garp.org/  If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com ------------------ Nigel Brook – Partner at Clyde & Co Nigel has been a partner at Clyde & Co since 1985 and heads the firm's reinsurance team. An international insurance and reinsurance disputes specialist with over 30 years' experience, Nigel is considered by many to be one of the top insurance lawyers worldwide. He leads Clyde & Co’s global campaign on Resilience and Climate Change Risk, building a body of know-how and raising awareness of climate-related legal duties and potential liabilities. He is a member of the Law, Regulation and Resilience Policies Working Group of the Insurance Development Forum – a public/private partnership seeking to optimise and extend the use of insurance and the industry's risk management capabilities to protect those most vulnerable to disasters. He co-authored the firm's 2018 Reports on Parametric Insurance and Inclusive Insurance – exploring the role of innovative risk transfer in closing the global protection gap – and has authored and edited Clyde & Co's 2018/19 series of reports on the rising tide of Climate Change liability and duties of care.

Today’s episode is all about how to navigate the increasingly complex landscape of climate disclosures, sustainability reporting frameworks and green taxonomies that have emerged over the last few years. This episode will address: What role disclosures should be playing in driving the transition to a low carbon economy Recent efforts to move beyond a narrow focus on climate to incorporate factors such as nature, biodiversity and water into disclosure frameworks The attributes that risk and finance professionals will need to ensure that they understand the risks and are supporting the transition, not greenwashing Links from today’s discussion: Learn more about CDSB: https://www.cdsb.net/ TCFD Knowledge Hub: https://www.tcfdhub.org/  Free Online Climate Risk/Reporting Courses: https://learn.tcfdhub.org/  For more information on climate risk, visit GARP’s Climate Resources Hub: https://climate.garp.org/  If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com ------------------ Mardi McBrien - Managing Director at the Climate Disclosure Standards Board (CDSB) For over a decade Mardi has played a leading role in driving the integration of climate and environmental information into corporate reporting with the same rigour as financial information, globally. Prior to CDSB, Mardi has enjoyed an eclectic career which has seen her lead flagship environmental campaigns for WWF to working on the United Kingdom’s carbon market policy for their Department for Energy and Climate Change and public private partnership management for the UK timber supply chain, amongst other challenging roles. Mardi is a member of the UK Financial Reporting Council Advisory Panel, a fellow of the RSA, and has participated in a number of industry related advisory boards and committees as part of her role at CDSB, including the IFRS Foundation Technical Readiness Working Group for the new International Sustainability Standards Board, GRI Stakeholder Council, Corporate Reporting Dialogue, Australian Sustainable Finance Initiative (ASFI) and the IIRC Council. Originally qualifying as a forester and environmental scientist (Melbourne University) and agricultural economist (SOAS), she volunteered as a trustee of one of the oldest environmental NGO’s in the world, the International Tree Foundation, and she is a founding Board member of WOCAN – Women Organising for Change in Agriculture and Natural Resource Management.

Over the past few years, we have seen an increasing number of companies take it upon themselves to engage with the issues climate change and sustainability on a voluntary basis - with firms’ motivations ranging from an interest in the long-term sustainability of their company’s activities, to a sense a moral duty to people and planet. There is a lot to be learnt from the organisations taking proactive steps to embed issues of sustainability at the heart of what they do. That’s why in today’s episode, we will be looking at this type of voluntary action, with a specific focus on the B Corp movement and their efforts to certify companies taking steps to think long term across all stakeholders. Hearing about firms that have made the transition to becoming a certified B Corp gives us a great insight into what it means for an organisation to truly walk the talk when it comes to something like climate change.   Links from today’s discussion: B Corporation website: www.bcorporation.uk  Better Business Act: www.betterbusinssact.org  Boardroom 2030: www.boardroom2030.org    For \more information on climate risk, visit GARP’s Climate Resources Hub: https://climate.garp.org/ If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com   ------------------   Charmian Love - Co-Founder at B Lab UK and Social Entrepreneur in Residence at Said Business School, Oxford   Charmian is Co-Founder and Activist in Residence at B Lab UK, where she supports the growth of B Corps across the UK (and beyond) and is Co-Chair of B Lab’s Global Climate Taskforce. Charmian is committed to helping accelerate the transition to a more regenerative, circular and inclusive economy. In her role as Social Entrepreneur in Residence at the Skoll Centre for Social Entrepreneurship at Oxford University’s Saïd Business School, Charmian is guiding the development of the Regenerative and Circular Economy Lab and designed and teaches a popular MBA course on this subject. Charmian also holds the role of Co-Director for the newly launched Oxford Climate Emergency Programme, has co-taught an Executive MBA course on Systempreneurship: Innovating for Impact, contributed to the core MBA class ‘Capitalism in Debate’ and is a regular tutor in the GOTO programme focused on equipping students with skills and tools to engage in system change. She is a member of the Sustainability Advisory Council at the ICAEW (because she truly believes that accountants will save the world), a member of the ‘Regenerative Business’ working group at the Institute of Directors (IoD), Co-Chair of the BAC’s NetZero Working Group and an Advisory Committee member for GARP’s (Global Association of Risk Professionals) Sustainability and Climate Risk Certificate. She held the role of chair of B Lab UK for 5 years, was a founding trustee to the Future Fit Foundation and was on the UK board of the B Team until 2019.

In today’s episode we will be returning to the topic of climate disclosures, looking specifically at the advancements in TCFD adoption across the banking sector. In 2019 we recorded a podcast that discussed the early adoption of the TCFD across the banking sector. Now, just 2 years on, we are starting to see a number of countries laying out plans for mandatory TCFD reporting. Expectations around the quality of climate disclosures are rising and we are seeing the TCFD transitioning to become a part of business as usual reporting. That is why today’s discussion will be focused on learning from those already reporting to better understand what firms are doing well, as well as where improvements can be made. This episode will directly address: what banks are doing well and what needs to be improved; whether or not general-purpose lending needs to become more closely tied with emissions or other green indicators; and why TCFD reporting remains fragmented and what to do about it   In memory of Roger Gifford We wanted to take this opportunity to pay tribute to Sir Roger Gifford who sadly passed away in May. Among his many accomplishments, he was a respected banker, former Lord Mayor of the City of London and Chair of the Green Finance Institute, playing a leading role in driving the green finance agenda in the UK.  As someone who was always keen to support work promoting sustainable finance, he has been a good friend to GARP and was happy to write the Forewords to both BCS Consulting reports on TCFD discussed in this episode. We dedicate this episode of the podcast to his memory.    Links from today’s discussion: Our previous podcast with Hector: https://garpcast.libsyn.com/tcfd-global-progress-for-the-banking-sector BCS’ TCFD Report - Global Progress for the Banking Sector: http://www.bcsconsulting.com/wp-content/uploads/2021/05/BCS-TCFD-Global-Progress-Report-for-the-Banking-Sector-060521.pdf For more information on climate risk, visit GARP’s Climate Resources Hub: https://climate.garp.org/   If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you at: climateriskpodcast@garp.com   ------------------   Hector Fontaine - Principal Consultant at BCS Consulting   Hector is a Risk & Finance management consultant and Sustainable Finance lead for BCS Consulting. BCS Consulting is focused on delivering complex business change projects to clients in banking and financial markets, working across Capital Markets, Retail & Corporate Banking and Finance & Risk functions in some of the world’s leading financial institutions. Hector, as Sustainable Finance Lead, has expertise spanning finance and risk. Over the past few years, he has directed and co-authored a number of significant research papers, including the ESG Banking Benchmark Report back in 2018, and more recently two comprehensive reviews of the adoption and implementation of TCFD in the banking sector.