Physical climate risks and the Financial sector – synthesis of investors climate information needs

14:00 Wednesday 29 May

SS029 • OC173

Room S16

 

Karianne De Bruin (Netherlands) 1; Christa Clapp (Norway) 2; Sophie Dejonckheere (Norway) 2

1 - Wageningen Environmental Research & CICERO; 2 - CICERO

While investors are paying more attention to climate change, there is a lack of granular data designed to support financial decisions. In fact, nearly half of the world’s biggest asset owners do nothing to mitigate climate risk. How can investors better secure the value of their portfolios against climate change-related risks? Which climate risks require immediate attention from investors, and what scientific information is available? Climate services can provide improved indicators and metrics to help investors better manage these risks.

This presentation will highlight the first results of the ERA4CS-JPI Climate project ClimINVEST. The project brings scientists and investors together in a series of science practice labs to co-design tailored information on climate change to support financial decision making in the face of climate risks and opportunities.

We provide a synthesis of understanding investors needs and information gaps on the physical impact of climate change, through the identification of what information sources financial actors rely on and challenges in decision-making based on available climate change information, while taking into account diverse investor mandates and risk management approaches. Three unique geographical cases are presented, both on commonalities and differences, namely France, the Netherlands and Norway. In France, the 2015’s Energy Transition for Green Growth Act (Article 173-VI) requires institutional investors to report on their integration of climate-related risks in their investment policy. In the Netherlands, the Dutch Central Bank and financial institutions are challenged to deal with potential flood risks from increasing precipitation and sea level rise. In Norway, different financial actors, such as Finance Norway and the Norwegian Government are assessing the impacts of physical climate risks on the Norwegian economy.