{"id":19152,"date":"2020-07-31T10:30:23","date_gmt":"2020-07-31T14:30:23","guid":{"rendered":"https:\/\/www.benefitscanada.com\/news\/climate-risk-goes-beyond-the-e-in-esg-webinar-148505"},"modified":"2020-07-31T10:30:23","modified_gmt":"2020-07-31T14:30:23","slug":"climate-risk-goes-beyond-the-e-in-esg-webinar","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2020\/07\/31\/climate-risk-goes-beyond-the-e-in-esg-webinar\/","title":{"rendered":"Climate risk goes beyond the \u2018E\u2019 in ESG: webinar"},"content":{"rendered":"
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\"93284851_123RF\" <\/div>\n<\/p><\/div>\n

Kelsey Rolfe<\/span> | July 31, 2020 <\/p>\n

Climate change has accelerated the risk of expensive natural disasters, but these risks still aren\u2019t being adequately taken into consideration in investment decisions.<\/p>\n

\u201cClimate risks oftentimes are evaluated more under \u2018E\u2019 in [environmental, social and governance risk assessments],\u201d said Jeff Schlegelmilch, director of the National Center for Disaster Preparedness at Columbia University\u2019s Earth Institute, in a webinar hosted by AllianceBernstein. \u201c[But] these disasters have cascading impacts that erode tax bases that create and exacerbate social inequality. And there are also challenges with some of the limits of disclosure.\u201d<\/p>\n

Read: What\u2019s keeping ESG rankings so convoluted?<\/a><\/strong><\/p>\n

He pointed to figures from the United Nations\u2019 Office for Disaster Risk Reduction on the impact of weather-related disasters on countries\u2019 economies from 1998 to 2017. Looking at the raw dollar value, the U.S. saw the highest impact, with natural disasters such as Hurricane Harvey, Hurricane Katrina and wildfires out west playing a role in the substantial cost. But look at the dollar impact as a percentage of countries\u2019 gross domestic product and a different story emerges, said Schlegelmilch.<\/p>\n

\u201cThe U.S. doesn\u2019t even crack the top 10 [countries]. You\u2019re seeing primarily lower-income countries bearing the brunt in terms of the percentage, the proportion of their economy that\u2019s been impacted by these disasters. I think this is a really important dynamic, because the numbers may not seem as big, but the impact can actually be much more outsized and significantly disrupt the [country\u2019s] development trajectory when they\u2019re at that scale.\u201d<\/p>\n

Read: How pension plans can implement TCFD recommendations<\/a><\/strong><\/p>\n

The focus on the \u201ccascading impacts\u201d of climate disasters needs to occur across asset classes, he added. For example, some banks have started to take a look at the NCDP\u2019s hazard index as they underwrite municipal bonds. \u201c[They\u2019re asking the issuers], \u2018Well, if you\u2019re earthquake prone and you have an earthquake and we\u2019ve got a 30-year bond issue, what is your ability to repay that if all your businesses flee because of a bad recovery? These are good questions to start asking. They may not be explicitly required in these measures yet, but they are absolutely going to be impacting the risks on those investments in actuality.\u201d<\/p>\n

As infrastructure is increasingly built in areas that are particularly at risk to natural disasters, their potential cost must be properly integrated into investment decisions, noted Schlegelmilch. He pointed to the levee failure during Hurricane Katrina, Beijing\u2019s overwhelmed sewage system during the 2016 flood event and the \u201cincredible vulnerability\u201d of substandard concrete buildings in Haiti as examples of what could happen when those risks aren\u2019t considered.<\/p>\n

\u201cWhen we look at the cost of disasters, we also have to look at where the investments of the infrastructure and the facilities and the buildings in the path of those disasters where risk was not adequately integrated into that investment calculation and the cost is measured in dollars but reflected in lives and livelihoods.\u201d<\/span><\/p>\n

Read: How institutional investors weigh energy transition risks, opportunities<\/a><\/strong><\/p>\n

Read the full article at BenefitsCanada.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Kelsey Rolfe | July 31, 2020 Climate change has accelerated the risk of expensive natural disasters, but these risks still aren\u2019t being adequately taken into consideration in investment decisions. \u201cClimate risks oftentimes are evaluated more under \u2018E\u2019 in...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/19152"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=19152"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/19152\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=19152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=19152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=19152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}