CLIMATE FINANCIAL RISKS
The U.S. Securities and Exchange Commission's proposed climate disclosure rules, as reported in "New SEC rules spur demand for climate risk analysis" (March 8, 2024), mark a significant turning point for businesses and investors. These regulations require public companies to disclose their greenhouse gas emissions and climate-related risks, including physical and business risks. Organizations now seek expertise to help them understand, quantify, and report their climate-related vulnerabilities to comply with these new requirements.
The new SEC rules have sparked an unprecedented demand for climate risk analysis services. This surge in demand for climate risk analysis is further evidenced by financial institutions acquiring climate modeling and data companies, as highlighted in an earlier news "Wall Street is buying up climate modeling firms for their data". This development underscores the growing recognition among investors of the critical role that climate data and analytics play in assessing the potential impacts of climate change on investments and developing sustainable investment strategies.
As a leading research group in climate risk assessment and data stewardship at USU, our Climate Risk Group is well-positioned to help organizations navigate this complex and rapidly evolving landscape.
WHAT WE DO:
Our reputable research demonstrates that we offer extensive expertise in event diagnostics, climate prediction, and weather risk analysis. We provide a range of consulting services designed to empower businesses and financial institutions to proactively manage their climate-related risks and seize opportunities in the transition to a low-carbon economy.
Our group's proven expertise includes:
1. Climate risk assessments and scenario analysis
2. Greenhouse gas emissions accounting and reporting
3. Climate-related financial disclosures (TCFD)
4. Climate change adaptation and mitigation strategies
5. Sustainable investment and portfolio analysis
By partnering with our team, organizations can leverage cutting-edge climate data, modeling techniques, and risk assessment frameworks to make informed decisions, comply with emerging regulations, and build resilience in the face of climate change toward a more sustainable and prosperous future for your organization.
BACKGROUND
PHYSICAL RISKS FROM CLIMATE CHANGE
- Climate change is expected to increase the frequency and intensity of extreme weather events, such as floods, droughts, and wildfires.
- These events can damage infrastructure, disrupt supply chains, and lead to losses in productivity.
- The financial sector is exposed to these risks through its investments in physical assets, such as property and infrastructure, as well as its lending to businesses and households.
- The impact of climate change on the financial system will vary across countries and regions, depending on their exposure to climate hazards.
ISO 14090
By adhering to ISO 14090, organizations can ensure that their climate risk disclosures are not only comprehensive but also standardized.
Disclosing climate risks is a complex task that involves various elements such as pre-planning, adaptation planning, implementation, monitoring, and evaluation. ISO 14090 provides a comprehensive framework that addresses these elements, making it well-suited for the task. The standard offers principles, requirements, and guidelines for assessing and managing the impact of climate change, including physical and financial risks. It aids organizations in building resilience and facilitates transparency in reporting and communication. ISO 14090 also supports scenario analysis for climate risk disclosure, helping organizations assess supplier ESG risks and make informed decisions. By adhering to ISO 14090, organizations can ensure that their climate risk disclosures are not only comprehensive but also standardized, making it easier for stakeholders to understand and act upon the information provided
ISO 14090 is an international standard that focuses on "Adaptation to Climate Change." It provides principles, requirements, and guidelines for managing the impact of climate change, including physical risks. The standard aims to help organizations build resilience against the effects of climate change by providing a structured framework for adaptation. While the search results did not specifically mention the data requirements or details on physical risks, ISO 14090 is designed to be a generic standard that can be applied across various sectors and industries.
The standard is often used in conjunction with other risk assessment methodologies, such as ISO 31000, to consider climate changes and their impact on physical assets and operations. It is part of a range of ISO standards in the area of climate change and is intended to be used for improving planning of adaptation to climate change, including the assessment of climate change-related risks.
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