Climate Risk Podcast

In this installment of the Climate Risk Podcast we are joined by renowned economist Professor Sir Dieter Helm, whose extensive experience of advising governments on energy and natural capital helps us cut through the hype and face the realities of reaching net zero. In the run up to Glasgow’s COP26 as part of the global ‘race to zero’ initiative, we have seen a significant rise in commitments to reach net zero at both the national and firm level. But there are many routes to get there, different policy options, and of course difficult trade-offs to be considered. With all this activity, separating the noise from the substance and charting the right course can be challenging. That’s why today’s conversation will be a sobering and honest discussion about the nature and scale of the challenge. Critiques of existing policy and ‘net zero’ commitments will be explored, as well as a roadmap for a country to achieve net zero in a way that genuinely ends its contribution to global climate change. This episode will directly address: why achieving net zero doesn’t necessarily end your contribution to global climate change; whether offsets are ever acceptable; and if growth is possible in a net zero world   Prof. Sir Dieter Helm’s website: http://www.dieterhelm.co.uk/ A link through to Prof. Sir Dieter Helm’s authored works, including the subject of today’s show, Net Zero: How We Stop Causing Climate Change: http://www.dieterhelm.co.uk/books/   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   ------------------   Sir Dieter Helm - Professor of Economic Policy at the University of Oxford and Fellow in Economics at New College   Sir Dieter Helm is Professor of Economic Policy at the University of Oxford and Fellow in Economics at New College, Oxford. He was Independent Chair of the Natural Capital Committee, providing advice to the government on the sustainable use of natural capital, until the end of the second term of the Committee in November 2020.  In the New Year 2021 Honours List, Dieter was awarded a knighthood for services to the environment, energy and utilities policy. He has written many books, most recently Net Zero (September 2020, William Collins) in which he addresses the action we all need to take to tackle the climate emergency. His other books include: Green & Prosperous Land  (2019, William Collins), Burn Out: The Endgame for Fossil Fuels  (2017), The Carbon Crunch: Revised and Updated (2015) and Natural Capital: Valuing the Planet  (2016), all published by Yale University Press. Dieter has provided extensive advice to UK and European governments, including The Cost of Energy Review for the UK government in October 2017 and for the European Commission in preparing the Energy Roadmap 2030. He served both as a special advisor to the European Commissioner for Energy and as Chairman of the Ad Hoc Advisory Group on the Roadmap. He also assisted the Polish government in its presidency of the European Union Council. Dieter is Chairman of Natural Capital Research, developing natural capital models and assessments for the better use of land, and Honorary Vice President of the Berkshire, Buckinghamshire and Oxfordshire Wildlife Trust.

In this instalment of the Climate Risk Podcast we are turning our attention to agriculture, forestry and land use, a sector that both affects, and is affected by, climate change. Producing approximately 20% of total global greenhouse gasses, agriculture, forestry and land use is considered the second largest source of emissions after energy production, making it a critical focus for global decarbonisation. But the sector’s sensitivity to changes in temperature and precipitation, as well as extreme weather more generally, means that it is also particularly vulnerable to the effects of climate change. With that said, there are positives to be drawn out of this situation. This is because many of the responses needed to the sector’s high emissions and physical vulnerabilities overlap to create compelling win-win situations. Well placed investments in agriculture combine emissions reductions with resilience building which, in turn, reduce financial risks for the sector. To illustrate this, today’s episode will have three points of focus: How financial institutions can support the sector in locating and acting upon opportunities to reduce climate risk and build resilience The role of data in successfully identifying and responding to these win-wins The lessons that we can take from this sector and apply elsewhere   Environmental Defense Fund (EDF) Website: https://www.edf.org/ Financing Resilient Agriculture Report: https://www.edf.org/sites/default/files/content/Financing_Resilient_Agriculture_Report.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   ------------------   Maggie Monast - Director of Working Lands at Environmental Defense Fund (EDF)   During the past 10 years, Maggie has held a variety of roles at EDF, working with farmers, food companies, agricultural organizations, and others, such as financial firms, to create an agricultural system that drives climate stability, clean water, and food security. Maggie works to quantify the farm financial impacts of conservation practice adoption, collaborates with major corporations to develop sustainability initiatives, and develops innovative financial incentives to advance sustainable agriculture.  

In this instalment of the Climate Risk Podcast we will be taking a closer look at the role of real economy firms, and their boards, in the race to net zero. Last year we looked at the role that boards have in shaping firms’ climate strategies and developing approaches to managing the risks and opportunities from climate change. Since then, the pressure on boards has only mounted, given this more recent and growing emphasis on the transition to net zero. So today we return to the boardroom, with a few key questions: What is the role of boards as firms transition to net zero? What would good board engagement look like? What does a commitment to reach net zero really mean anyway?   If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you at - climateriskpodcast@garp.com For more information, visit GARP’s Climate Resources Hub - https://climate.garp.org/   ------------------   Emily Farnworth - Deputy Director at the Centre for Climate Engagement, Hughes Hall, University of Cambridge   Emily has over 25 years of experience working with businesses, government and non-profit organisations to support the transition to a low-carbon economy. Emily has worked across multi-stakeholder groups and within specific industry sectors to collaborate on solutions to tackle climate change. During her time as Head of Climate Initiatives at the World Economic Forum, and now at the Centre for Climate Change, Emily has led research, campaigns and communications strategies aimed at creating systemic change in the way businesses manage climate risk and decarbonize operations.

In this instalment of the Climate Risk Podcast we address a few different topics all tied together by the central theme of climate data. Translating the output of climate, energy and economic models into decision useful climate analytics is fraught with challenges. It requires the bridging of informational gaps, but also the bridging of disciplines and communities. It also means navigating the uncertainty that comes with modelling something as complex as our global climate system. Progress is being made in this domain though, and whilst best practice is yet to be established, we are starting to get a sense of what good looks like. This episode covers: Being intentional about climate analytics - What data do you need and why do you need it? Navigating the uncertainty inherent in modelling complex systems What does good look like?   Check out the Four Twenty Seven website for more resource relating to climate data and analytics - https://427mt.com/   If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you. Please email us at: climateriskpodcast@garp.com For more information, visit GARP’s Climate Resources Hub - https://climate.garp.org/   ------------------   Emilie Mazzacurati – Founder and CEO of Four Twenty Seven & Global Head of Moody’s Climate Solutions Emilie Mazzacurati is the Founder and CEO of Four Twenty Seven, a provider of data, market intelligence and analysis related to physical climate and environmental risks. Driven by a conviction that businesses have a critical role to play in building resilience against climate change, and a need to bridge the gap between scientists, businesses, investors and governments, Emilie founded Four Twenty Seven to help meet this need back in 2012. In addition to her work with Four Twenty Seven, Emilie is a lecturer on Business and Climate Change at the University of California and is a frequent speaker at international events on climate risks and opportunities.

In this instalment of the Climate Risk Podcast we address two pressing questions facing asset managers and explore their implications for the financial sector more broadly. The first question is a fundamental one: what is the appropriate role for asset owners and asset managers in relation to climate change? How do these roles relate to one another and how far reaching are their obligations?  The second is an equally pressing question for the sector: engagement or divestment? When is it right to deploy one approach over the other? How impactful are these strategies and how can we navigate some of the unintended consequences? This episode covers: The role of asset owners and asset managers Engagement vs Divestment – what do these two approaches entail and is it really an either/or situation? The shift in momentum ahead of COP26 – a closer look at net-zero commitments   If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you. Please email us at: climateriskpodcast@garp.com For more information, visit GARP’s Climate Resources Hub - https://climate.garp.org/   ------------------   Meryam Omi - Head of Sustainability and Responsible Investment Strategy at LGIM Since joining LGIM in 2008, Meryam has been instrumental in establishing its engagement programme on key sustainability topics. She also led the launch of funds in the pioneering Future World range, as well as the Climate Impact Pledge, which is LGIM’s commitment to engage and act on climate change. In her current role, Meryam is responsible for integrating environmental, social and governance (ESG) aspects into the investment process at LGIM and for creating responsible investment product solutions.

This episode covers: Carbon offsets – what are they and how can they help tackle climate change? Biodiversity – how can offsets promote regenerative activities and nature-based solutions? Nature-related Financial Disclosures – how does this relate to TCFD and what will the key metrics and targets be?   Links from today’s discussion: South Pole - https://www.southpole.com/ Taskforce on Scaling Voluntary Carbon Markets - https://www.iif.com/Portals/1/Files/TSVCM_Report.pdf The Dasgupta Review: The economics of biodiversity - https://www.gov.uk/government/publications/final-report-the-economics-of-biodiversity-the-dasgupta-review Task Force on Nature-related Financial Disclosures - https://tnfd.info/ CPIC (Coalition for Private Investment in Conservation) - http://cpicfinance.com/ PCAF (Partnership for Carbon Accounting Financials) - https://carbonaccountingfinancials.com/ PBAF (Partnership for Biodiversity Accounting Financials) - https://pbafglobal.com/   If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you. Please email us at: climateriskpodcast@garp.com   ------------------   Rebecca Self –Director of Sustainable Finance at South Pole Rebecca Self is Director of Sustainable Finance at South Pole, a climate change strategy and solutions company. Rebecca has over 20 years of industry experience spanning numerous roles in finance. Prior to joining South Pole in 2020, Rebecca spent the previous three years as CFO of Sustainable Finance at HSBC Holdings plc, during which time she held responsibilities for HSBC's external ESG reporting and investor relations activity – including TCFD and SDG reporting. Rebecca was the Chair of the European Banking Federation industry SDG working group and a member of other advisory groups including SASB and CDP, all with the common aim of progressing non-financial reporting.  

When it comes to setting out the financial system’s response to climate change and the related risks, it is clear that financial regulation will have a key role to play. Over the past year, we’ve seen supervisors setting out their expectations for climate risk management, with a number undertaking stress testing or scenario analysis exercises. More authorities are implementing mandatory Climate-Related Financial Disclosures, and the NGFS continues to grow, with now over 80 members. The recognition of climate change as a source of systemic risk means that this flurry of activity is set to continue this year. That’s why this episode will be focusing on what the appropriate role of financial services is in tackling climate change, as well as the best way to test firms’ resilience to these risks. We’ll also discuss how climate risks should be balanced alongside broader ESG risks and some of the key hurdles that will need to be overcome in the years ahead.   This episode covers: How financial regulators are responding to climate risk Stress testing and scenario analysis – how and when these tools should be deployed Some of the current limitations around data Looking beyond climate change to broader environmental issues   If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you. Please email us at: climateriskpodcast@garp.com   ------------------   Arthur Yuen – Deputy Chief Executive at the HKMA Arthur Yuen is in charge of the full range of banking policy, supervision, conduct, and enforcement issues at the HKMA. He joined the HKMA in 1996 as Head of Administration and has since taken up different responsibilities including research and liaison on China economic and market development issues before being appointed Head of Banking Supervision in 2000. He took up the position as Executive Director (Banking Development) in July 2004, Executive Director (Banking Supervision) in June 2005 and Executive Director (External) in July 2008. He was appointed to his present position on 1 January 2010.

The physical effects of climate change - rising global sea levels and temperature, to extreme weather events - are creating or exacerbating numerous risks. Whilst physical risks are generating a significant amount of uncertainty for business and finance, the most direct impact of physical risk is the damage of physical assets and disruption to their use. Understanding and evaluating these risks is clearly very important, but it can become challenging as the scale of the assessment increases to the total assets held by a firm or within a portfolio. That’s why this episode will be focusing on how the risks to physical assets can be assessed at scale and how to navigate the uncertainty inherent with this type of modelling. We will also discuss how mapping out supply chains, core infrastructure, and their interdependencies, can reveal vulnerabilities, as well as opportunities for collaborative adaptation.   By listening to today’s episode, you will learn about: The impacts of physical risk at the asset level The key inputs and outputs used when conducting a physical risk assessment The secondary impacts of physical risk on supply chains and core infrastructure How physical risk data can be used to facilitate collaborative adaptation efforts   If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you. Please email us at: climateriskpodcast@garp.com   Links from today’s discussion: XDI Cross Dependency Initiative - https://xdi.systems/ GARP’s Climate Resources Hub – https://climate.garp.org/   ------------------   Rohan Hamden – Founder and CEO at XDI: Cross Dependency Initiative Rohan Hamden is the founder and CEO of XDI: Cross Dependency Initiative, an international data and analytics organisation specialising in the modelling and analysis of asset level physical climate risk. Rohan began his career as a fire fighter before working in the Australia government for nearly 15 years. During that time Rohan held a number of sustainability and climate related roles, culminating in the directorship of the Climate Adaptation Program for South Australia where he designed and led the implementation of the States multi-award-winning climate change adaptation program. Rohan has advised various state and national governments on their climate adaptation programs in Australia, Canada, USA and the UK, and in 2017 he co-founded XDI with a vision of mainstreaming climate information into infrastructure and financial decision making.    

In this latest instalment of the Climate Risk Podcast, we will be looking back at the past year of podcasts and considering the key learnings for risk professionals. This episode will also reflect on the progress that has been made in advancing climate risk management during 2020, and a look ahead to what’s on the horizon in 2021.   Today’s episode covers: Key lessons for risk professionals from the 2020 Climate Risk Podcast series Important trends risk professionals should be aware of Movements in financial regulation The impact of COVID on the climate agenda A look ahead to 2021   If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you. Please email us at: climateriskpodcast@garp.com     Links from today’s discussion: GARP’s Climate Resources Hub – https://climate.garp.org/ GARP - Global Survey of Climate Risk Management at Financial Firms - NGFS – Occasional Papers CFTC Report - Managing Climate Risk in the U.S. Financial System     Dr Maxine Nelson – Senior Vice President, GARP Risk Institute Maxine has extensive experience in risk, capital and regulation gained from a wide-ranging variety of roles, including Global Head of Wholesale Risk Analytics and Head of Capital Planning at HSBC, significantly expanding counterparty credit risk management at the UK Financial Services Authority during the last financial crisis, leading the credit risk team at KPMG London, senior credit risk consultant at Oliver Wyman, and embedding operational risk analytics globally at National Australia Bank. Maxine has a degree in mechanical engineering and a PhD characterizing how best to apply probability theory to real world problems.    

In this latest instalment of the Climate Risk Podcast, we will be exploring the issue of pricing the risks from climate change. During the course of this inaugural series of the climate risk podcast, we have explored numerous perspectives on the pressing issue of climate change. That has included hearing from the insurance sector, boards, academia and more. But to round off this first series of climate interviews we are returning to what GARP is best known for, financial risk management. That’s why in today’s episode we are speaking with Bob Litterman, a celebrated risk manager who has been actively involved with climate change issues for more than a decade.   Today’s episode covers: Understanding emissions as a negative externality and the failure to appropriately price carbon Aligning financial incentives with the transition to a low-carbon economy The CFTC’s report on Managing Climate Risk in the U.S. Financial System The value and limitations of scenario analysis as a tool for assessing climate risk If you have any questions, thoughts or feedback regarding this podcast series, we would love to hear from you. Please email us at: climateriskpodcast@garp.com   Links from today’s discussion: CFTC Report - Managing Climate Risk in the U.S. Financial System   ------------------   Bob Litterman – Founding Partner, Kepos Capital   Bob is Chairman of the Risk Committee and a founding partner of Kepos Capital, a New York City based investment management fund. Prior to joining Kepos Capital in 2010, Bob enjoyed a 23-year career at Goldman Sachs, where he held roles in research, risk management, investment and thought leadership. In 1994, Bob was named a partner and became head of the firm-wide risk function. During his tenure at Goldman, Bob researched and published a number of ground-breaking papers in asset allocation and risk management. He is the co-developer of the Black-Litterman Global Asset Allocation Model, a key tool in investment management, and has co-authored a number of influential books on Risk Management and Modern Investment Management. In addition to his work at Kepos Capital, Bob serves on a number of boards, including the World Wildlife Fund, and as the chair of the Climate-Related Market Risk Subcommittee for the Commodity Futures Trading Commission. Through the course of Bob’s illustrious career, he has also earnt numerous accolades including entrance into Risk Magazine’s Risk Management Hall of Fame and being named as GARP’s Risk Manager of the Year in 2013.