Climate Change Data: Stories for Action from Global to Local Scale

For the images that accompany this article, please see here: https://www.linkedin.com/pulse/climate-change-data-from-global-local-scale-story-coffee-leed-ap and the section header links.

At McKinsey’s Global Sustainability Summit in Chicago in mid-May, the consulting giant’s clients from around the world met to discuss sustainability “at a tipping point.” The theme signals the mounting concerns its clients are expressing as they grapple with the physical impacts of climate change and seek new opportunities for sustainable growth and innovation.

For corporate leaders, a major theme was, “make the risks of climate change actionable,’ in part through story lines that move through various geographic scales and feature the impact of climate risk projections on economies. In the U.S., we benefit from a comprehensive National Climate Assessment that lets us do just that.

Global Sea Level Rise

The U.S. Interagency Sea Level Rise Task Force provides six scenarios for assessing global mean sea level (GMSL) that could affect local communities (image a). The low scenario of 30 cm (about 1 foot) GMSL rise by 2100 is consistent with the current rise rate of 3 mm/year (0.12 inches/year).

The highest scenario of 250 cm mirrors several estimates of the maximum physically plausible level of sea level rise in the 21st century. It also is consistent with the high end of recent projections of Antarctic ice sheet melt. These scenarios are used for risk framing. According to the National Oceanic and Atmospheric Administration, almost 40 percent of the U.S. population live in relatively high-population-density coastal areas, where global sea level plays a role in flooding, shoreline erosion and hazards from storms.

Because the sea surface is not changing at the same rate at all points around the globe, sea level rise at specific locations may be more or less than the global average due to many local factors (image b).

Local Sea Level Rise

Beyond global sea level trends, sea level rise risks are identifiable for cities around the U.S. Using NOAA’s Coastal Flood Exposure Mapper, it is possible to  examine multiple flood hazards with high resolution models that incorporate potential sea level rise impacts, such as that for Charleston, S.C. (image c)

Sea Level Rise Effects on Economy

Besides impairing coastal infrastructure, regional/local sea level rise also effects local economies. For instance, by 2045, Charleston is projected to experience up to 180 flood events a year that cause delays in vehicular traffic. City officials estimate that each flood event affecting the main traffic artery costs $12.4 million (in 2009 dollars). Over the past 50 years, the damage and lost wages from delayed traffic have totaled more than $1.53 billion. More broadly, on the U.S. East Coast, over 7,500 miles of roadway are located in high tide flooding zones. Unmitigated, this flooding has the potential to nearly double the current 100 million vehicle-hours of delay likely by 2020 (image d).

Cities are taking action on this data. For instance, Charleston has developed a Sea Level Rise Strategy that plans for 50 years out. It reflects moderate sea level rise scenarios and reinvestment in infrastructure, development of a response plan, and increased readiness. As of 2016, the City of Charleston had spent or set aside $235 million (in 2015 dollars) to complete ongoing drainage improvement projects to prevent current and future flooding.

Corporations can too.

Thank you to Baylee Ritter for co-athoring and to Allyza Lustig, U.S. Global Change Research Program (USGCRP) for her help with information. 

Chicago Mayor Lightfoot - Resilience Priorities

Congratulations, Mayor Lightfoot on your inspiring inauguration today. It was an honor to serve on your transition team. Here are some resilience-specific recommendations for Chicago.

TO: Mayor-Elect Lori Lightfoot via

FR: Joyce Coffee, president, Climate Resilience Consulting

RE: Environment Transition Committee Memo

DT: April 15, 2019

What is happening today that we need to keep:

We have no time to waste on decreasing greenhouse gas emissions to save lives and improve livelihoods, thus increasing the efficacy of our climate resilience actions.  For assets the City of Chicago owns, one of the swiftest, most efficient ways to decrease our carbon footprint is to purchase renewable energy credits in the near-term while planning for mid-term investment in renewable energy developments that foster jobs, air quality improvement, resiliency and economic vitality. 

The City should fulfill its commitment to power public buildings with 100% renewable energy by 2025 and meet demands of the Renewable Chicago city/stakeholder working group. Its intent is to create a renewable energy transition that centrally positions social equity and environmental justice within cost-conscious energy supply arrangements to provide maximum benefit to Chicagoans.
Illustrative immediate next steps:

-       Continued development of a robust database of City facilities including energy consumption and cost data to facilitate maximum monitoring and planning for energy efficiency and renewable energy investments at City-owned assets (carbon footprint related).

-       Continued exploration of innovative energy procurement strategies through the active RFI for Municipal Electricity Supply and the Chicago Solar Ground Mount Project that is underway and will inform a five-year renewable energy transition plan.

-       Negotiating emergent partnerships, such as the Bloomberg American Cities Climate Challenge, toward arrangements that direct philanthropic resources to areas of need.

-       Finalizing the multiyear and multipronged clean energy transition plan, including the initial City renewable energy credits’ purchase as a first step in the transition. 

Expected Outcomes:[1]

-       Chicago’s strong contribution to slowing the rate of global climate change at levels that meet or exceed the Paris Climate Agreement.

-       Improved stewardship of  City assets and taxpayer dollars through expanded energy management and recognition (e.g., ENERGY STAR, Better Buildings Challenge).

-       Recognition of Chicago as a global clean energy transition leader with particular innovation in bringing opportunity to communities most affected by industrial pollution. 

What we need to implement immediately; or within the next year:

As a global city, Chicago is impacted by global finance trends, including at least four of which relate to climate resilience:[2]

1.     Credit rating agencies evaluate the physical impacts of climate change on municipal, utility and corporate ability to pay back debt.

2.     Big data informs investors about the costs of exposure to predicted future climate change.

3.     Case and constitutional law includes liability for climate change risk, since predicted scenarios are now readily available and force majeur is no longer a viable natural disaster plea.

4.     The Financial Stability Board’s Task Force on Climate Related Financial Disclosure has issued guidelines describing the requirement to assess investment portfolios’ risks from climate change’s physical impacts, influencing trillions of dollars of assets under management.

Fortunately for Chicago, this all equals good news.  Although lower-resourced Chicagoans especially suffer from needless exposure to many environmental hazards, Chicago’s climate change hazards are significantly less than our sea coastal, drought-prone and wildfire interface neighbors elsewhere in the country. Thus, when considering the above four points’ effects on other U.S. cities, our credit ratings will not be negatively impacted by climate change; our 10-30 year infrastructure cost/benefit analysis needs will be less; we will incur less climate change-related liability; and investors in both public and private assets will have fewer physical risks to account for. The bottom line: In terms of climate change resilience, we can develop a mindset shift and brand ourselves a city more attractive to assets under management wishing to avoid risks. Therefore, we can fund resilience improvements that benefit the lives and livelihoods of Chicagoans (and, see below, our new neighbors).

Illustrative immediate next steps for the City and its collaborations with sister agencies and districts:

-       Increase resilience project bankability/investability through changes to utility rate structures based on social equity considerations and more reflective of service delivery’s true costs. 

-       Increase cross-department resilience project pipeline identification, as well as collaborative implementation, to further collateral benefits generated by rate-based department budgets.

-       Consider issuing green revenue bonds for resilience investments.[3] to attract new investors to the City of Chicago, free up more GO and other City assets for social safety net priorities, and further the City’s brand as a more climate resilient place.

-       Investigate evolving risk transfer options (including parametric insurance and cat bonds), using brokers to model risks and secure the best deals, ensuring the right cover for the right price and building requirement for resilience, based on risk, into insurance contracts.[4]

Expected outcomes:

-       Stable municipal credit ratings.

-       More City money available to serve constituents.

-       Less City revenue, livelihood and life lost from shock (e.g., extreme precipitation) and stress (e.g., extreme heat) events.

-       More resilience mainstreamed in City’s essential/critical infrastructure.

-       More interdepartmental project collaboration to increase value of city services for Chicagoans.

-       Fewer Chicagoans suffering from flooding and extreme heat, more Chicagoans benefitting from better, water, transit, public health services. 

What we can plan for longer-term implementation:

Compared to other major American cities, Chicago in coming decades will be distinctly positioned to receive our neighbors forced from their communities by rising sea levels, more extreme coastal storms and more wildfires. If we create a resilient city for our current residents, Chicago will be a fantastic receiving community for the next great migration – an estimated 13.1 million people on the move by 2100[5] from America’s vulnerable sea coasts and hot spots.

The transformation required to create this amazing place for our new neighbors should bring elements of restorative justice to our lower resourced (nonwhite, recent immigrants, non-English speakers, poor, chronically ill, female-headed households and renters) communities, providing quantifiable benefits to our current residents. https://resilient.chicago.gov/ is a good guide for programs, partnerships and policies that will greatly contribute to lives and livelihoods of Chicagoans.

In addition, recommendations from other transition committee policy areas will create resilience (e.g., Business, Economic and Neighborhood Development; Public Health; Education; Public Safety and Accountability; Housing; Transportation and Infrastructure; Good Governance; Arts and Culture and Youth).

The key is to act on the knowledge that lower resourced communities suffer most from climate and weather hazards,[6] experiencing more damage and possessing less political clout to advocate for fixes.[7]

Immediate Next Steps:

-       Provide each department with a map of Chicago’s poverty by neighborhood,  and ask department heads to identify their plans to create social equity in their budgets, provisioning best-in-class public services in lower resourced communities.

Expected Outputs:

-       Social equity based budgets and work plans for Chicago’s departments (and sister agencies).

Expected Outcomes:

-       Chicago neighborhoods offer safety, security, stability and joy to residents and welcome all, including lower resourced Americans, who have lost their family wealth due to climate change impacts.

Disclosure:  I, Joyce Coffee, President of Climate Resilience Consulting, work with institutions that focus on actions recommended in this memo.

 This memo was first published athttps://bettertogetherchicago.com/wp-content/uploads/Environment_Memos.pdf

[1] Expected Outputs:
-City facility and energy database that allows effective planning and transparent tracking of progress towards 100% renewable energy through efficiency, renewable development, and enhanced energy procurement
- RFP for energy supply services in 2020 and beyond that incorporates innovative approaches to renewable energy development that brings job creation and other benefits to the neighborhoods most affected by climate change and industrial pollution
- Visible City-facilitated solar developments in a diverse set of Chicago neighborhoods, including vacant and brownfield sites  
- Foundation resourcing and partnerships that augment the planning and capacity of City personnel and contractors
- REC ownership that demonstrates achievement of an early milestone in Chicago’s 100% renewable energy transition

[2] Illustrative references: https://www.spglobal.com/_assets/documents/corporate/ratingsdirect_pluggingtheclimateadaptationgapwithhighresiliencebenefitin.._.pdf; https://www.spglobal.com/_assets/documents/corporate/ratingsdirect_pluggingtheclimateadaptationgapwithhighresiliencebenefitin.._.pdf;

https://www.clf.org/wp-content/uploads/2018/01/GRC_CLF_Report_R8.pdf

https://www.fsb-tcfd.org/

[3] https://www.climatebonds.net/adaptation-and-resilience

[4] https://www.willistowerswatson.com/en-ID/Home/Services/Services/catastrophe-bond-consulting

[5] https://doi.org/10.1038/nclimate3271

[6] https://www.scientificamerican.com/article/when-storms-hit-cities-poor-areas-suffer-most/?fbclid=IwAR0N-Ouo0hrtHPnR-Q-lpcbYYwA0yc6NV4vWcPprQ_QoeQ-OVG0krrlO5Rg

[7] https://www.nap.edu/read/25381/chapter/6#54 and https://anthropocenealliance.org/higherground

Money for Resilience, By the Numbers

This blog is co-authored by Baylee Ritter. It originally appeared in Triple Pundit.

In early April, global investment firm BlackRock released a seminal report on assessing climate risks. It focused on U.S. municipal bonds, commercial mortgage-backed securities and electric utilities. The report got me thinking about where we might look for funds and finance for climate resilience. Here’s what we found: On balance, if we make strategic decisions for resilience starting now, the numbers suggest we can find such necessary financing now.

By the numbers:

• According to the National Oceanic and Atmospheric Administration, U.S. economic losses from 14 natural catastrophes in 2018 amounted to $91 billion. 80 percent of that total loss was caused by Hurricane Michael, Hurricane Florence and the California wildfires.

• Although quite a staggering loss, $91 billion is nominal compared to the cost of real estate assets at risk in 2070 if we make no changes to our current carbon emission trajectory. The United Nations Environmental Program Financial Initiative estimates that $35 trillion is at risk. That represents about half of today’s global assets under management in any industry sector ($79.2 trillion global assets under management, as of 2018). 

• Globally, $463 billion is invested in climate change—a number that only continues to rise. But when $13.5 trillion in global energy investment is needed from INDCs (for Intended Nationally Determined Contributions) and nearly $7 trillion must be invested in global infrastructure between 2017 and 2032, $463 billion seems, again, quite nominal. 

These numbers demonstrate that a changing climate is having a significant impact on the economy, and the economic cost of climate change will only worsen if we make no changes to our current carbon emissions trajectory. While the amount invested in climate change doesn’t match the global investment needs to update infrastructure, the $79.2 trillion in assets under management globally suggest we still have the means to reduce climate risks through both mitigation and resilience.

This urgency will continue to grow, driven by tragedies that define the resilience gap. Last year’s National Climate Assessment spotlighted the costs we already are experiencing:

• Flooding along the Mississippi and Missouri rivers in 2011, triggered by heavy rainfall, caused an estimated $5.7 billion in damages.

• Drought in 2012 caused widespread agricultural losses to crops and livestock, and low water levels along the Mississippi River affected transportation of goods, resulting in an estimated $33 billion in losses.

• Annual federal firefighting costs have ranged from $809 million to $2.1 billion per year between 2000 and 2016.

Important work is already being done. From the Climate Bonds Initiative to the Global Adaptation and Resilience Investment WorkGroup, financial sector experts are working to create mechanisms in the financial markets that make it more likely that assets under management will include more climate change resilience projects. That’s important as the gap in resilience finance, which the Climate Policy Initiative doggedly tracks annually, grows wider. But the longer we wait to fund such projects, the far more expensive they will be in the long term.

What Can We Learn about Resilience from the Bay Area

Guest post by Naseem Falla

The City of San Francisco (and the entire Bay Area) have historically developed innovative solutions to the social, economic and environmental challenges facing the region. Not surprisingly, the region has been on the vanguard of the growing resilience movement, addressing their challenges with a proactive approach by launching several resilient programs designed to strengthen resilience and mitigate the impacts of regional challenges ranging from social inequity, population growth and unaffordable living costs, to earthquakes and sea level rise. 

Although resilience programs launched after natural disasters are vital to successfully building back stronger, communities who have not experienced a disaster in recent years should learn from the Bay Area’s proactive approach of addressing and mitigating the impacts of vulnerabilities before a threat or disaster even occurs.

Key to the Region’s resilience approach has also been engaging a wide range of regional, national and global stakeholders in resilience initiatives. Casting a wide net when it comes to crafting resilience programs and groups allows for a more holistic resilience approach that truly encompasses the needs of all community sectors across the community.   

Three programs in the Region help to further these tactics:

Resilient San Francisco

Resilient San Francisco: Stronger Today, Stronger Tomorrow is a living document developed in 2016 that lays out the City’s resilience goals and sets forth a strategic resilience vison and plan. The study is the outcome of a successful partnership among public, private and nonprofit sectors, along with stakeholders and local community leaders.

The plan highlights the City’s “integrated approach” towards examining linkages and systems of resilience and focuses on increasing the City and Bay Area’s capacity to accommodate a predicted spike in population growth by 2040.

It integrates several existing public/private resilience initiatives, such as:

·       The Lifelines Council: Develops and improves systems that provide vital transportation, electric power, water, liquid fuel, natural gas and communication services during and after a disaster.

·       Earthquake Safety Implementation Program: Communicates San Francisco’s vulnerabilities to earthquakes and develops action plans for seismic safety.

·       Earthquake Safety Implementation Program (EIFS): A 30-year, 50-task community/city program to develop earthquake risk reduction public policy.

Resilient by Design

Always searching for new ideas to strengthen their resilience, the San Francisco Bay Area conducted a design challenge modeled on the Northeast’s post-Hurricane Sandy Rebuild by Design competition. The challenge launched in May 2017, and culminated a year later with nine winning projects – one winner for each community-identified vulnerable Bay Area site.

The competition connected local corporations, community members, government officials, and regional experts with internationally recognized resilience leaders. Winning projects ranged from “South Bay Sponge,” a natural infrastructure approach using marshlands and Salt Ponds for flood protection, to “Estuary Commons,” a network of public green spaces created from the construction of ponds, landforms and expanded streams to manage and preserve the area’s natural resources.

The regional approach fostered relationships, collaboration and a realization of just how large of an impact (positive and negative) one community’s actions can have on surrounding Bay Area communities.

Bay Area Housing and Community Multiple Hazards Risk Assessment

Completed in January 2015, this multi-agency project was led by the Association of Bay Area Governments and the Bay Conservation and Development Commission to develop strategies for safe growth in the area. The study included two phases: a Vulnerability Assessment, followed by Strategy Development. To improve Bay Area’s resilience, this program focuses on the intersection between housing and community vulnerability.

Like the Bay Area, other communities can benefit from taking a proactive approach to resilience by assessing their existing and future threats before a trigger event, and by engaging a wide range of stakeholders in resilience planning initiatives and actions. Integrating the perspectives of local public and private sector organizations, community members, NGOs, national and international thought leaders, and more, makes way for resilient programs that don’t just address the built environment, but also consider the social and economic elements that build more resilient communities.

Ms. Falla is a climate resilience specialist at the Institute for Building Technology and Safety, @IBTS_org, a Climate Resilience Consulting Client

Five Resilience Trends to Watch in 2019

This oped originally appeared in Triple Pundit https://www.triplepundit.com/story/2019/five-resilience-trends-watch-2019/82001

Americans depend on our country’s transportation, energy and water supply systems. This infrastructure is under increasing stress as coastal storms, wildfires, drought and sea level rise. And there are countless questions on how to gain the political will, as well as the funds and financing for both infrastructure modernization and new infrastructure in the face of these growing hazards. We’re detecting these trends involving climate adaptation and resilience we expected will emerge or occur in 2019.

Resilience finance will go mainstream.

From theClimate Bonds Initiativeto theGlobal Adaptation and Resilience Investment WorkGroup, finance sector experts are working to create mechanisms in the financial markets that make it more likely that assets under management will include more climate change resilience projects. That’s important, since the gap in resilience finance, which the Climate Policy Initiative doggedly tracks annually, grows wider. Creating principles for resilience-related green bonds is a high priority in the growing climate bond field.

Resilience funding will increase.

Both the Department of Housing and Urban Development and the Federal Emergency Management Agency received increased mitigation-related appropriations, in part through the "Disaster Recovery Reform Act." Going forward,FEMA can use 6 percentof its Disaster Relief Fund on pre-disaster mitigation andHUD allocated $28 billionto support long-term disaster recovery in nine states, Puerto Rico and the U.S. Virgin Islands with $16 billion earmarked for risk mitigation. Rules and guidelines for accessing these competitive grants are on the agencies’ 2019 to-do list.

Climate change-driven migration will be better organized.

Even as Louisiana grapples with the ongoing migration of families from their southern parishes because of climate-related issues (e.g., in Plaquemine Parish, 67 percent of the population left between 2000 and 2015), it and other states seek ways tocreate capacity and opportunityin receiving communities. We even have a term for this change:“Climigration.” It was coined by Robin Bronen, executive director of theAlaska Institute for Justice,to replace the commonly used misnomer “climate refugee.” 

Resilience news will become more ubiquitous.

The resilience-related news cycle will grow, driven by growing tragedies that define theresilience gap. Last year’sNational Climate Assessmentspotlighted the costs we already are experiencing:

• Flooding along the Mississippi and Missouri rivers in 2011, triggered by heavy rainfall, caused an estimated $5.7 billion in costs.

• Drought in 2012 caused widespread agricultural losses to crops and livestock, and low water levels along the Mississippi River affected transportation of goods. resulting in an estimated $33 billion in losses.

• Annual federal firefighting costs have ranged from $809 million to $2.1 billion per year between 2000 and 2016.

Experts in many sectors now assert how climate change risk is impacting their goals, resulting, for instance, in a 10-fold increase in my resilience-related Google feed – the source of many of mytweetsthe past year.

Rural America will continue to bear the brunt of catastrophic loss.

Many Americans still live, work and play in smaller towns and cities where most climate change-related tragedy strikes – from Paradise, California, to Mexico Beach, Florida. Resources focused on smaller communities, such asFlood Forum USAandOnline Help and Advice for Natural Disasters, are going to be even more in demand.

Are you detecting other resilience-related trends? Please let me know. Contact me on Twitter.

Image credit: Bureau of Land Management/Flickr

TIPS FOR LOCAL GOVERNMENTS: FINANCING FOR A MORE RESILIENT FUTURE

This blog originally appeared on IBTS’s free OnHand platform: https://ibtsonhand.org/resource/tips-for-local-governments-financing-for-a-more-resilient-future/

As part of resilience planning, local leaders must assess how local hazards and threats may impact their financial resources in order to both strengthen existing resources and prevent the community’s finances from plunging into the red in the event of a natural or manmade disaster or threat.

Ideally, communities should look at ways to build more resilient finances before a disaster, however local leaders can also integrate resilient financing options into their disaster recovery plans. The tips below provide advice and ideas for getting started with evaluating and strengthening your finances against the impacts of hazards and threats.

Know your hazards so you can assess their potential financial impacts.

• There is no magic formula for predicting financial impacts, but you should learn as much about the potential impact of your natural hazards as possible.

• Free publicly available tools, typically organized by hazard, get better all the time. For instance, local leaders can try Climate Central’s set of easy to use maps to visualize heat, smoke, drought, flood and other vulnerabilities.

Consider how your future hazards could impact the flow of taxes and funding streams in your community.

• Prioritize the potential biggest losses, and develop solutions to address them first.

  • For example, if you determine that a major rain storm could flood and shut down your main street businesses, resolve the flooding issue so that your sales tax base isn’t halted in the event of a flood.

Build relationships with regional local leaders, not just their emergency management, to further opportunities for risk pooling and shared solutions to financial disaster recovery.

• Disasters and disaster declarations rarely impact just one jurisdiction, your recovery approach should integrate existing regional partnerships to pool resources and recover efficiently.

• Regional allies can help bring more state and federal funds to your community, and solutions that benefit the region.

• Many citizens live in one jurisdiction but work in another; a recovery strategy that benefits multiple communities can increase citizen support and satisfaction.

• Consider including utilities in your regional planning. Because they typically serve a multi-jurisdiction region, they can be strong resources and allies in regional resilience.

Integrate bankable projects into your planning as much as possible to create long-term revenue sources.   

• Bankable projects are revenue-generating and include things like public transit systems and toll roads. They require taxes and fees or fees to pay them back. As climate risks are set to grow in the future, working with elected officials and your constituents to ensure you have adequate revenue for resilience investments today that protect from tomorrow’s risk is key.

• Local governments can also integrate more creative solutions like tourism revenue on parks.

Mainstream prevention measures into your capital and operating budgets to ensure that each of your infrastructure investments are designed, built and maintained with hazards in mind.

• Infrastructure built to withstand hazards mitigates damage and reduces emergency spending and service interruptions if a hazard or sudden threat does occur.

Be prepared for your next interaction with credit rating agencies.

• Credit rating agencies are aware of your community’s hazards, and they want to know that you are too. Be prepared to demonstrate hazards and risks facing your community, and how you’re addressing them.

Consider emerging, innovative types of financing such as catastrophe bonds.

• Catastrophe bonds protect governments or government entities against a specified disaster with an established objective metric such as mortality rate, wind speed, or flood water level.

• If a disaster meets the specified trigger conditions, the bond investments are released to be applied towards response and recovery.

• Smaller local governments can consider taking a regional approach to catastrophe bonds by issuing them through a regional entity such as a Council of Governments (COG).

Key Findings from Climate Adaptation Report

This post originally appeared on Meeting of the Minds:

https://meetingoftheminds.org/key-findings-from-climate-adaptation-report-29108#comments

Even as we work tirelessly and in the face of great obstacles to reduce our greenhouse gas emissions, humans have already set in motion impacts from climate change — many of which we’re witnessing in real time: more frequent and intense storms, flooding, sea level rise, drought, and extreme weather events. This year’s tragic impact from Hurricane Florence, wildfires, and river floods adds to miseries like last year’s Harvey, Irma and Maria.  Thus, communities around the world are embracing climate adaptation measures and plans to be resilient to what the future will bring — and what the present is already delivering.

What’s the state of those local climate adaptation efforts? A report “Rising to the Challenge, Together” report  that I co-authored for The Kresge Foundation was released late last year and is billed as “a critical assessment of the state of the climate adaptation field in the US.”

At the request of Kresge, a leading philanthropy focused on adaptation in the US, I joined with Dr. Susi Moser with Susanne Moser Research and Consulting and Aleka Seville at the time with Four Twenty Seven Inc. to conduct interviews and surveys with almost 100 leaders representing the public, private, and NGO/civic sectors and academia, covering a wide range of adaptation-related expertise and perspectives.

The key finding?

Climate adaptation has begun to emerge as a field of practice; however, it is not evolving quickly or deliberately enough for communities to adequately prepare for the dangerous shocks and stresses that increasingly will be introduced by climate change.

Our team identified a number of challenges:

• The adaptation field does not have a unifying vision of a better future. It remains mostly reactive, rather than proactive.

• A sense of urgency is lacking, and too many adaptation efforts are stalled at the planning stage.

• The prevailing emphasis on urban adaptation leaves small towns and rural areas behind, and neglects important interdependencies between cities and surrounding areas.

• While there is growing awareness of the disproportionate impact of climate change on the most vulnerable—and the need for equitable solutions—few adaptation actors understand how to incorporate equity into their work.

There are plenty of positive signs. The field has a growing purpose as climate impacts are driving adaptation. New actors and networks have energized the adaptation field, including city networks, community groups, utilities, and the private sector.  And in particular, the practice of adaptation is gaining ground – here are 5 key marks of progress:

1. The knowledge base on adaptation is improving.

2. Tools supporting adaptation are increasingly available, but remain difficult to select and use.

3. Science and practice are increasingly working together, yet more collaboration is needed.

4. Adaptation mandates are emerging in some states and cities.

5. Funding from philanthropy and government has been crucial for field growth.

The report lays out a clear vision for the adaptation field’s future: Closing the resilience gap through significantly accelerated mitigation and adaptation efforts while building social cohesion and equity.



What is the resilience gap? It’s the gulf between adequate levels of mitigation and adaptation that is especially profound where social cohesion and equity are lacking.

The vision of narrowing this gap inspires the maturing adaptation field to prevent, minimize, and alleviate climate change threats to human well-being and to the natural and built systems on which humans depend. It’s exciting to fulfill this mission, because by doing so we create new opportunities -addressing the causes and consequences of climate change in ways that solve related social, environmental, and economic problems. (Moser et al 2017, Rising to the Challenge, Together, pp 9).

Taking Adaptation Mainstream

The report points out that the most efficient and effective way to get a move on adaptation is to “mainstream it, integrating it into existing government and policy structures. Adaptation barriers and capacity needs that can be addressed through mainstreaming include:

• Financial constraints: Adaptation work can be advanced within existing budgets without having to secure additional, separate, or new funding sources.

• Political hurdles: Climate change considerations can be integrated into projects and programs already underway to protect them from short election cycles and political opposition.

• Inadequate planning processes: Existing plans, processes, and solution options can be informed and improved by consideration of future climate impacts.

• Limited authority: Where dedicated climate, sustainability, or resilience staff do not have the authority to influence other processes (such as hazard mitigation plans, public health vulnerability assessments, capital planning), mainstreaming balances responsibility among multiple agencies and departments with authority to act.

• Capacity deficiencies: Where there are no dedicated staff for climate change and resilience (especially in small and medium-sized cities and towns), mainstreaming is the only viable, near-term approach.

• Lack of motivation: In the face of multiple competing priorities, finding overlaps and co-benefits between adaptation and other goals can elevate the urgency to act.

• Lack of consistency: Mandates from higher government levels can help ensure that lower-level entities address climate change and do so consistently across jurisdictional boundaries.

• Language barriers: If climate change is politically or conceptually problematic, using the vernacular of existing processes can help open doors and engage broader audiences.

• Separate/siloed approaches: Mainstreaming can initiate better coordination of previously disconnected efforts, build broader support, uncover budget overlaps and complementarities, and achieve additional benefits.”

Even in the year since completing the report, we’ve seen profound growth in the adaptation field. For instance, the Task Force on Climate Related Financial Disclosures guidelines released in mid 2017 have created a new interest among investors to know their physical risks. Similarly, several of the major credit agencies are examining these risks when evaluating municipal bonds, growing the pool of interested city practitioners.  The Global Climate Action Summit and affiliated events like Meeting of the Mind’s Climate Resilient Communities session in partnership with UC Davis defined a refreshed global ambition for resilience. And, while the Federal government has made it harder to find some of the data to help the average professional incorporate an understanding of risk and adaptation into their everyday work, others in the non profit and private sector have made their tools more available, more refined, and more related to very specific geographies.

These are just a few of the significant advances the field is experiencing, and, along with the momentum from the 100 experts we interviewed for the report, they make me quite hopeful for our future.

Does climate resilience matter for small-town America?

Where are you from? Your parents? Chances are most of you will answer from small or mid-sized town. These communities offer incredible opportunity for climate resilience – and incredible loss if left out of the resilience renaissance led by large cities.

In the U.S, with only roughly 700 cities above 50,000 in population and with two-thirds of Americans residing in these small and mid-sized cities, it begs the question: Does resilience matter to smaller cities?   

For the past four years, I have convened resilience-related events at Climate Week New York. This year, with dozens of small and mid-sized cities rebounding from Hurricane Florence and from the summer’s destructive wildfires, an expert panel at the recently concluded summit offered some answers. (By the way, it’s great progress that while our events used to be the only ones offering resilience programs, about a dozen events explicitly about felt climate risk and resilience dotted this year’s schedule.)

During Monday’s panel session, panelist Patrick Howell, director of resilience initiatives at the Institute for Building Technology and Safety (a client), maintained that based on the Institute’s provision of daily operations and disaster recovery assistance to 130-plus small communities, three reasons explain why resilience matters to smaller cities:

• Unlike in large cities where significant civil society, nonprofit, and corporate engagement resides, small and mid-sized city governments are on the front lines of disaster resilience. These local governments must provide day-to-day life safety and quality of life and are responsible for the first 72 hours of response after a disaster event erupts.

• Even more than in large cities, resilience planning and action in these smaller communities are often constrained by lack of resources and capital.

• Leaving smaller communities out of the resilience movement exacerbates the urban/rural divide.

The other panelists – Franco Montalto, director of the North American Hub for the Urban Climate Change Research Network; Cooper Martin, program director of the National League of Cities’ Sustainable Cities Institute; and William Solecki, director of the CUNY Institute for Sustainable Cities and lead author of several chapters in the International Panel on Climate Change assessment and the National Climate Assessment – identified four resilience-related essentials smaller cities need:

1. Actionable risk assessments: Assessments specific to a community to help inform pragmatic and incremental resilience plans – IBTS has found their city partners appreciate a framework and tools for community resilience assessment – they call it “CRAFT”.

2. Priority solutions: Avenues that supply the larger needs of the community and resilience to future threats. “Building resilience through an understanding of community needs builds relevance and broad-based support,.” explained Montalto.)

3. Better valuation of projects: Traditional and innovative models to finance and fund the next era of climate resilience, including an emphasis on project revenue generation.

4. Engagement: Stakeholders beyond the government, such as school Parent Teacher Associations and Chambers of Commerce, are key partners in resilience success.

But what do these smaller communities require that is unlike their larger counterparts? The answer is nuanced, yet  a few key elements are evident:

1.    A local government resilience intrapreneur: Someone within the government who surfaces resilience themes and uses political drivers to draw interest to resilience from other government quarters. Just one official in a small city government – whether a civil servant, mayor, city council member or a utility leader – can trigger resilience engagement. NLC’s Leadership in Community Resilience possesses a dozen examples of nascent mid-sized city resilience inspired by intrapreneurs in smaller communities such as Kingston, N.Y.; Durango, Colo.; Annapolis, Md.; Bozeman, Mont.; and San Leandro, Calif. Often, noted Montalto, these leaders are town engineers or public works and water and drainage utility officials.

2.    Coordination across regions: With limited resources and significant interoperability between jurisdictions covering first responders, water treatment and other utility services to employers and schools, some smaller cities rely heavily on metro area and cooperative regional councils to magnify and leverage resources. This insight reflects regional collaboration that IBTS supports in and around Guymon, Okla.; Bossier City, La.;  Norristown, Pa.; and Hudson Valley, N.Y., as well as Solecki’s work with the Consortium for Climate Risk in the Urban Northeast.

3.    Community loyalty leverage: An area for significant opportunity cited by both Montalto and Solecki involves looking beyond government to resilience stakeholders in small and mid-sized cities who are loyal and deeply committed to their communities and excellent stakeholders for bringing resilience forward. Their help will enhance the adaptation solution set since myriad knowledge sources – indigenous, local, and science-based – exist and are needed to build resilience’s brain trust and action bank.  

4.    Enhanced interoperability of systems: In smaller communities with fewer staff, civil servants may have responsibilities across several services and systems, such as both water treatment and potable water service delivery. Martin noted that, by law, mayors are in charge of water service delivery in their communities and Howell remarked that “Smaller cities have agency over the trajectory of their development.” While disaster-driven cascading failures affect cities of any size, leaders in smaller cities responsible for multiple systems but potentially more resource-constrained may actually be better able to enhance adaptability across systems.

Also, the experts explained that several best practices in smaller cities mirror those of larger cities, including:

•      Don’t miss opportunities for multifunctional infrastructure. Ask resilience questions of capital projects early in the concept and design phases and throughout procurement through operation.

•      Aim to create scale and complementarity, asking if decentralized initiatives are up to the major challenges ahead.

•      Seek to integrate risk management, city development and greenhouse gas mitigation to create truly climate resilient development pathways for those, Solecki points out, provides a reminder of the power of transformation in any setting.

So, remember where you’re from, and take that heartfelt affection and consider reaching out to your hometown with offers to support its resilience efforts.

As I write this, I’m off to Boulder, Colo., my hometown and home to climate change-induced wildfires and flash floods as well as sophisticated adaptation and resilience strategies and leaders from whom I hope to learn more lessons on adaptation and resilience approach.  

Resilient Golden Arches – Structurally and Sustainably

This article originally appeared on Triple Pundit

Those golden arches of McDonald’s, among the most recognized logos in the word, are actually a catenary arch, a super strong architectural feature that has helped ensure resilience buildings for centuries. So, does the ubiquitous yellow pair that graces roughly 37,000 McDonald’s worldwide represent a company resilient to current and future changes?

At last week’s Global Climate Action Summit, I sat down with Keith Kenny, McDonald’s Global Vice President of Sustainability to learn about the company’s resilience story. He asserted that climate resilience is both an environmental and economic imperative for the company.

“Farmer livelihoods and related thriving rural communities are important to us because our restaurants are in those communities,” he explained. “That gets forgotten when we speak about sustainable agriculture.  Farmers need to be able to reinvest in their business. Just as we invest in them.”

That belief proved to be McDonald’s inspiration for its Flagship Farmers Program, which connects farmers interested in continuous improvement and sustainable practices. Its platform notes that climate change is affecting agriculture, causing droughts, floods, more storms and heat waves. The program encourages farmers “to adapt and develop our farming systems to be more resilient to these changing environmental conditions.”

Publicly recognizing these hazards caused by changes in climate – and predicted to grow over time – offers a good start on the path to making climate resilience a key feature of the business.

Keith pointed out that McDonald’s invests in supply chain projects with a 20-30 year payback, which makes them both climate change sensitive and focused on resilience to ensure year-over-year payback. Unlike other retailers with tens of thousands of items on their shelves, “15-to-20 items represent 70 percent of what we sell,” he said. “We have long-term relationships with our suppliers. Most of them have grown their business as we have grown ours.”

This is key, for instance, for beef consistency – patty to patty – throughout the world and also for long oblong potato varietals conducive to harvest times, storage and its fries.

This is a significant improvement from McDonald’s supply chain response of about five years ago. Then, under different leadership, its response to a question of what McDonald’s was doing to adapt its supply chain to climate change was to exclaim, “We’ll just tell Canada to get ready to grow canola if it gets to hot and dry to grow it in the lower 48.”

Its fresh approach may bring McDonald’s more into the climate-resilient supply chain vanguard with such companies as Mars Inc. and Coca Cola that have collaborated with the nonprofit Business for Social Responsibility to launch a Climate-Resilient Value Chains Leaders Platform announced at last week’s Summit.  

Though McDonald’s has yet to officially join that initiative, it is among a group of food companies including Keurig Green Mountain, Heinz and Chipotle making initial strides on climate resilience. And, like other big companies, climate action to reduce greenhouse gasses is becoming more of a priority. This year, McDonald’s announced it was partnering with franchisees and suppliers to reduce greenhouse gas emissions related to its restaurants and offices by 36 percent by 2030 from a 2015 base year in a new strategy to address climate change. It also committed to a 31 percent decrease in emissions intensity per metric ton of food and packaging across its supply chain by 2030 from 2015 levels, and the combined target has been approved by the Science Based Targets initiative.

Keith said innovation is key to McDonald’s resilience and sees soil health as a “huge opportunity” that the company is exploring with such partners as the World Wildlife Fund and the University of Arizona. In addition, he enumerated the many collateral benefits of pursuing adaptive multi-paddock grazing – moving cow herds from paddock to paddock – that allows soil to regenerate by giving native plants a chance to establish deeper roots. This enhances carbon sequestration and water retention and filtration while increasing productivity with more animals grazed on the same land.

Keith also offered another example of how its thinking about climate change and resilience has changed, and it reflects that McDonald’s is a surf-and-turf restaurant. Cod fished from the North Atlantic were a key element of McDonald’s filet-o-fish sandwich until environmental organization Greenpeace brought McDonald’s and others to task for fishing in a warming ocean where melting ice flows are exposing previously frozen areas. Keith was invited by Greenpeace to journey on its Arctic Sunrise ship to see firsthand “what the fish are up to” in a climate-changed world.  

In May 2016, McDonald’s and more than a dozen other seafood industry giants joined forces to protect a large area of the Arctic from increased fishing. The voluntary agreement commits the companies from expanding cod fishing into a previously ice-covered portion of the Northern Barents Sea in the Arctic.

Onward! Resilience Takeaways from the Global Climate Action Summit

This article originally appeared on Triple Pundit.

In some ways, it’s surprising how little the 2018 Global Climate Action Summit focused on climate adaptation. Only two the 500 official announcements emanating from the annual event, which concluded last Friday, relate to adaptation.

And though The Exponential Climate Action Roadmap, published on the CGAS opening day by its leadership, explained that “the roadmap outlines the global economic transformation required by 2030 to meet the Paris Agreement on climate,” it asserted that the Paris Agreement’s goal to reduce the risk of dangerous climate change “can be achieved if greenhouse gas emissions peak by 2020, halve by 2030 and then halve again by 2040 and 2050.”  

Actually, this isn’t quite right. The Paris accord has goals – plural. In addition to the above objective, the Paris Agreement covers global approval for adaptation, resilience and reduced vulnerability. It requires signatory nations to plan and apply adaptation, report adaptation efforts and needs, and – every five years – measure adequacy, effectiveness and progress. Indeed half of the Paris Climate Agreement is about adaptation. (For those of you who keep score, adaptation is mentioned 47 times in the agreement while mitigation only 23.  Check it out.)

So while the climate media and GCAS may be distorting the Agreement’s reality, the resilience initiatives featured at the Summit and affiliated events are awesome and deserve to be encouraged and supported in their own right.  

Here is my roundup of a baker’s dozen of highlights that deserve our attention and promotion as we fuel ambition for adaptation:

1. James Lee Witt, former director of the Federal Emergency Management Authority at the Summit representing the National Association of Counties and discussing Community Readiness boldly pointed out that to break the damage/repair/damage/repair cycle  in certain cases, we must “make climate action happen by migrating households out of harm’s way.”  

2. Sanjay Wagle, Managing Director of the Lightsmith Group, launched a resilience finance technical facility for lower income and small island nations, based on the progress of the firm’s award-winning Climate Resilience and Adaptation Finance and Technology-transfer facility (CRAFT). 

3. Emilie Mazzacurati, founder and CEO of Four Twenty Seven Inc., introduced the firm’s latest innovation, a project to identify and calculate the macroeconomic risks of climate change for every country and ensure that governments can access its data.

4. Tom Steyer (At the Cities4Climate Event hosted by C40), who is a hedge fund manager, philanthropist, activist and the money and brains behind Risky Business, gave credit for California’s progress on climate action to community activists. He contended that California’s climate progress “is due to the leadership of the environmental justice movement – they are the high water mark in terms of morality. They make climate change a kitchen table issue.”

5. The Natural Resources Defense Council (NRDC), is working on the biggest climate change killer out there, heat stress, by helping Indian states adopt heat action plans with public awareness campaigns, better identification of vulnerable populations and expanded use of reflective surfaces.

6. C40 for its Deadline 2020 initiative – a commitment from 73 cities, representing over 425 million citizens, to develop inclusive climate action plans to strengthen resilience and address adaptation along with mitigation in their work.

7. ICF’s Robert Kay, who foresaw that GCAS would be a key set of dialogues and initiated plans for the robust affiliate event, “Building Resilience Today for a Sustainable Tomorrow,” that brought together the Global Resilience Partnership with BSR and the United Nations initiative, Anticipate, Absorb, Reshape.

8. Global Real Estate Sustainability Benchmark (GRESB) hosted a Climate and Resilience Preview where real estate investors waded into the deep of both reporting the climate risk embedded in their holdings and working to mitigate it. It included Romilly Madew, CEO of Australia’s Green Building Council, who has mainstreamed real estate climate change risk assessment among her members.

9. The Pacific Coast Collaborative led by Governors Jerry Brown (CA) and Jay Inslee (WA), who launched a new effort to strengthen climate resilience through collaboration that results in climate resilience for local communities and infrastructure.

10. Global Adaptation and Resilience Investment (GARI) work group and Willis Towers Watson’s Carlos Sanchez, who together are promoting the development of financial tools and instruments for the management of portfolio exposure to climate risks.

11. Connecticut Governor Dannell P. Malloy led with his proudest climate action: Creating resilience through traditional finance by applying state bond proceeds to neighborhood microgrids. This occurred after the state was pummeled by extreme snow events that cut power for days.

12. BSR provided leadership from Samantha Harris with its new Climate-Resilient Value Chains Leaders Platform. Launched with climate resilience leaders Mars Inc. and Coca Cola, the initiative focuess on long-term models for corporate buying that require resilience.

13. Mayor Lionell Johnson Jr. of St. Gabriel, Louisiana, (population: 6,677),who launched the Mississippi River Investment Coalition to grow local financing of resilient infrastructure “because the heart of America is experiencing climate change every day, affecting our economies and our workforce.”

Next week, the UN General Assembly is in session and, concurrently, New York City’s 10thClimate Week will be held. More resilience action will occur there as adaptation continues to gain momentum with leaders around the globe.  

Meanwhile, the high-level “Summit Champions” responsible for making GCAS 2018 more than just another meeting by fueling ambition for climate action, are encouraged to think twice about the Paris Climate Agreement – specifically, No. 1, mitigation and No. 2, adaptation.

And act with urgency on both.

Image credit: Joyce Coffee

Weathering the Storm: Real Estate Resilience to Climate Change (Finally) Gets Attention

This article originally appeared on Triple Pundit

“It blows my mind that this is coming up now: Real estate risk from the physical impacts of climate change.”

That’s how Neil Pegram, Director of Americas with GRESB, a global investor-driven benchmark organization that tracks real estate portfolios’ environmental, social and governance performance, welcomed attendees at GRESB’s affiliate event at last week’s Global Climate Action Summit.

Pegram was noting how slow the real estate industry has been in turning its attention to the impact of climate change on real assets, even though climate resistance has become an investment imperative in a sector where such investments often are held for a decade or longer.

It seemed apropos that the GRESB event was taking place as the East Coast prepared for Hurricane Florence’s anticipated wrath and as the real estate industry absorbs the news that 2017’s natural disasters caused an estimated $220 billion in property and infrastructure damage – two-thirds of the $330 billion in global economic losses, figures Munich RE.  

In March, GRESB released a new resilience module, an optional supplement to the GRESB Real Estate and Infrastructure Assessments. It is a significant improvement over the paltry resilience checkbox that GRESB included in prior benchmark frameworks.  

GRESB leaders acknowledged it was the Financial Stability Board’s Task Force for Climate-related Financial Disclosure (TCFD) recommendation that information related to governance, risk management, strategy, and performance metrics be disclosed that caused them to fortify the resilience benchmark.  

Several real estate investors in attendance described their portfolio’s resilience – and they reinforced the view that an industry awakening has begun. Nina James, General Manager, Corporate Sustainability, for Investa said that resilience generally is considered a “mega trend” and investors place it in the category of a “taking a long-term bet.” Like technology, climate change is viewed as a disruption that influences thinking and begs questions about what effective asset stewardship should look like.  

Martin Kholmatov, Senior Responsible Investment Specialist at AIMCo, acknowledged that a new set of stresses and shocks exists.  “They make us wonder, how is the business model going to evolve.” He said, adding that he and others think that “a proxy for good management is looking at ESG [Environment, Social and Governance] issues.”  

Romilly Madew, representing Australia’s Green Building Council, noted that a growing number of investors ask about resilience. “We tell our members to deal with resilience now and be prepared because investors are going to ask,” she explained.   

And Michelle Bachir of Deloitte pointed out that the firm’s advisory clients “are wondering what to put out there to make it decision useful for investors.  Our clients want to portray their leadership in the space. This is an exciting time.”

But GRESB’s data don’t completely confirm this positive tone. Only 13 percent of Real Estate Assessment GRESB responders – just over 100 firms – submitted information for the resilience module. The vast majority reported on only 20 percent of the resilience module, a poor showing indeed.

Adam Kirkman, Head of ESG at AMP Capital struck a conservative note by asking, “Where is the right time to pull the lever to future proof an asset based on risks down the track….What is the financial engineering resilience required?” He also pointed out that benchmarking is for the current real estate portfolio, while resilience decision-making needs to be built into new assets, too.

Ari Frankel, Sustainability & High-Performance Buildings, Alexandria Real Estate Equities, Inc. put a fine point on the challenge beyond GRESB.  Unlike other reporting frameworks such as GRI that requires quantification of progress and check boxes relating pastinformation, TCFD is “transformative, because you are asking investors to look at forward-looking, qualitative and scenario-based uncertainty.”

Let’s hope these real estate mavens attended the actual Global Climate Action Summit. They would have heard from leaders as varied as James Lee Witt,  former FEMA director and current advisor to Fortune 500 companies; Lionel Johnson Jr., mayor of St. Gabriel, La.; former U.S. Vice President Al Gore; Henk Ovink, Special Envoy for International Water Affairs for the Kingdom of the Netherlands; and Johan Rockström, executive director of the Stockholm Resilience Centre. They warned that the real estate sector’s ongoing drive for coastal development was on a collision course with climate risk, imperiling  real estate assets and humans.  

The UNFCCC’s 3rd Biennial Assessment and Overview of Climate Finance Flows released in April  — a month after GRESB’s resilience module – calculates that real estate assets at risk in 2070 will be $35 trillion (total value).  Now that’s mind-blowing.

Image credit: NOAA Environmental Visualization Laboratory

Five Adaptation Finance Tips That Can Help Build Resilience Worldwide

This article originally appeared in Triple Pundit.

Extreme weather events and long-term climatic changes are having an impact on economies everywhere, and leaders are grappling with action to adapt and build the resilience of communities, ecosystems, and economies alongside action to reduce greenhouse gas emissions and limit global warming.

Hence the rise of adaptation finance, which World Resources Institute has said is necessary as “poor rural areas are frequently the most in need of financial support to strengthen their resilience to climate change, yet they often have the fewest financial resources available.”

To that end, a key question was asked at “Resilience Day” during this week’s Global Climate Action Summit: how do we scale finance for adaptation?”

The question and responses are critically important because, as noted by Barbara Buchner, executive director of the Climate Policy Initiative, finance for climate adaptation in 2017 amounted to just $22 billion vs. $382 billion for climate mitigation.

Here are five answers based on input from several players in the adaptation investment field. These leaders include Sanjay Wagle, managing director of the private socially driven equity investment firm The Lightsmith Group; Dr. Buchner and Kirsten Dunlop, CEO of the European Union’s Climate-KIC; Kathy Baughman-McLeod, senior vice president of Global Environmental & Social Risk, Bank of America; and Mari Yoshitaka, chief consultant for the Clean Energy Finance Division of Mitsubishi UFJ Morgan Stanley Securities. For adaptation finance to work and ensure resilience, the following must occur:

1. Get the adaptation-related policies right. Regulatory uncertainties hinder investors. Especially since finance flow is mostly domestic, investors care about predictability. Nonprofits, bilateral agencies and academic institutions can assist sovereigns with regulatory improvements.

2. Borrow innovative finance solutions from other sectors, including the vanilla approach of ensuring all government investments are adaptive to climate risk, as well as insurance-linked securities, green bonds and other scalable and replicable means.The International Finance Corporation and other multilateral investment banks can further this work, increasing their emphasis on adaptation from a historic emphasis on mitigation.

3. Move toward a globally accepted standard for resilience finance including language on the use of proceeds so the market grows with each investment. Commercial and investment banks should be part of this standard-setting, with engagement from the Financial Stability Board and others.

4. Create facilities, starting in markets easy for investors’ participation, where a blend of philanthropy, impact capital, development finance and regular market capital invests in products and where projects can be wrapped and warehoused for their marketability. Focus especially on multiplying the scant grant resources in ways that inspire more adaptation finance, not just one improved project. Philanthropies, development banks and green investment banks are part of this solution.

5. Make the existing knowledge about profitable adaptation solutions much more widely known, since investors remain unaware of opportunities in this space. All adaptation thought leaders need to make this a priority, turning risks into investment opportunities.

As this week’s summit gets underway, it is important that we strive to ensure these five directives can help scale up climate adaptation.

What I Did on My Summer Vacation

Kids are returning to class, notebooks and charging cords in hand, ready to tap out that first week’s essay, “What I did on my Summer Vacation.” Here’s mine.

It’s title: How and When I Became a B Corp.

Climate Resilience Consulting became a Certified B Corporation this summer. B Corps, a new type of company, uses the power of business to solve social and environmental problems. B Corp certification is to business what Fair Trade certification is to coffee or LEED is to buildings. 

Climate Resilience Consulting was certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability and transparency. We evaluated how our practices impact our employees, our community, the environment and our customers.

Today, there are over 2,200 Certified Benefit Corps worldwide, including Unilever, Etsy and Patagonia. We are proud to join them as we share one unifying goal: to redefine success in business: 

·     We want to be a part of building better business, measuring what matters and benchmarking social and environmental impact.

·     We seek contribute to a shared and durable prosperity and strive to be model corporate citizens, serve as leaders in our community and operate transparently.

·     We endeavor to use business as a force for good in the world every day.

How does B Corp fit with our mission?

B Corp certification fits well with our mission. Climate Resilience Consulting exists to create a world with more lives saved and livelihoods enhanced in the face of climate change disruption, especially for those facing disproportionate risks to hazards.

What was our experience with the certification process?

Most people when I mention certification crinkle their nose, shake their heads, and say, “So much work!” A bit, yes, but worth every minute, IMHO. I started my own firm in part to drive greater application of resilience in communities, focusing on solving for the challenges I witnessed governments, nonprofits and companies face as they moved from plans to execution:

·     Building resilience measurement tools.

·     Defining resilience finance frameworks.

·     Crafting resilience-focused networks and nonprofits to create more support for governments and corporations to transform to resilience. 

Each part of the certification process brought me greater clarity and momentum for this work. 

How does being a B Corp distinguish our business?

Climate Resilience Consulting fills an important niche:   

·     We put social equity first. For maximum benefit to society, we prioritize resilience solutions for the most vulnerable. As a Certified B Corp, we aim not just to mitigate climate risk equally but also to build community resilience for less resourced groups, creating more equity. #AdaptationEquity is our 2018 twitter hashtag of choice. 

This part of our work represents an evolution, and we learned a great deal from The Kresge Foundation-sponsored work we led in 2017 that resulted in “Rising to the Challenge Together, a Review and Critical Assessment of the State of the U.S. Adaptation Field,” which defined resilience as including “a bedrock of social equity.” B Corps define themselves by this sort of service to humanity.

·     We are versatile. We have worked in all sectors - corporate (engineering, communications, architecture), local and national government, nonprofit, and university (in the U.S. and in emerging economies in Asia). B Corps are leaders in over 50 sectors and are on the front lines of helping to build change within them and outward to their customers and suppliers.

·     We are trusted advisors, called upon by key stakeholders in the U,S, and around the world to define and push forward resilience. With 40 percent of B Corps outside the U.S. in over 50 countries, B Corp certification enhances the legitimacy and impact of our work.

Which positive practices helped us get certified?

To become a Certified B Corp, Climate Resilience Consulting went through an assessment process to prove we operate based on high standards of social and environmental performance, accountability and transparency. Four major categories are involved in becoming certified as a B Corp:

·     Governance

·     Environment

·     Customers

·     Community

Our most robust scores are in community and customer categories, and we received particular credit for focusing on serving in-need populations and helping our customers improve their social and environmental impact. Our corporate structure – designed to provide significant portions of our profits, equity and time to charitable causes – also earned us lots of points. I’m a pro bono advisor to over 10 global and national resilience-related initiatives, including the Anthropocene Alliance, the American Society of Adaptation Professionals, the Climate KIC City Finance Lab, the Climate Bonds Initiative Adaptation and Resilience Expert Group. I take these roles seriously, the initiatives take their work seriously and the B Corp Certification takes it seriously, too. 

To ensure we locked in to all that we are certified for, we modified our operating agreements to integrate language noting our priority to have a material positive impact on society and the environment.

What did the certification process compel us to change?

·     I formalized carbon offsets for my travel through an inset I created with Chicago nonprofit’s Openlands.

·     I shifted my supplier procurement to Chicago-based WBE and Certified B Corp purveyors. 

·     I began to count my hours for mentoring and advising using the trusty Toggl ap that I use for client work and billing. 

As with the best certifications, the process of certifying made us much better.  To learn more about our certification and 2018 report, check out our B Corp profile.

Is TCFD Guidance Exacerbating Social Inequity?

My summer reading has entailed reviewing closely the numerous excellent resilience-finance thought leadership reports written by friends and colleagues, much of it galvanized by the Recommendations of the Task Force on Climate-related Financial Disclosures (TFCD) released in June 2017. I highly recommend these reports as there is lots to learn. Here are some of them:

1. Acclimitise for United Nations Environment Program Finance Initiative: Navigating a New Climate: Assessing credit risk and opportunity in a changing climate: Outputs of a working group of 16 banks piloting the TCFD Recommendations PART 2: Physical risks and opportunities July 2018.
2. Four Twenty Seven Inc. and Acclimitise for EBRD: Advancing TCFD guidance on physical climate risks and opportunitiesMay 2018.
3. Four Twenty Seven Inc. for Deutche Bank: Measuring Physical Climate Risk in Equity Portfolios, November 2017

But, one critical issue key to resilience finance exists that no one is talking about – and it worries me. It’s a discussion of how the finance industry manages assets to ensure the most vulnerable do not become even more helpless due to the physical risks of climate change.

Currently, TCFD spells out these four key features of their recommendations:

1. Adoptable by all organizations.
2. Included in financial filings.
3. Designed to solicit decision-useful, forward looking information on financial impacts.
4. Strong focus on risks and opportunities related to transition to lower-carbon economy.

I would add one more: It would prove transformative if future TCFD work – and that of the big brains interpreting the guidelines – include “Prioritize lifting more out of poverty into the middle-class market.”

As the groundbreaking “Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters” by World Bank lead economist Stephane Hallegatte reminds us, “By focusing on aggregate losses—the traditional approach to disaster risk—we restrict our consideration to how disasters affect those wealthy enough to have assets to lose in the first place, and largely ignore the plight of poor people.”

For the optimists among us, it doesn’t seem a heavy lift for TCFD to make social equity a feature of its future recommendations: Arguably, much of the goods and services represented by the dollars moving through the financial markets aim, in fact, to increase people’s well-being in infinite ways; In explaining the financial implications of climate change, TCFD does note there are social and environmental consequences; and it is plausible that Mark Carney, chair of the Financial Stability Board that established TCFD and author of the phrase Tragedy of the Horizon, might have had in mind the tragic consequences that climate change already is creating for the world’s least resourced people.

TCFD’s number one principle for effective disclosures is, “Disclosures should represent relevant information.” It’s likely most financiers don’t assume that the jobs left behind as companies move their capital assets and supply chains out of harm’s way are “relevant.” Yet, if that is not relevant to them, then who is it relevant to? Indeed, each of the four TCFD-recommended climate-related financial disclosures elements – governance, strategy, risk management, and metrics and targets – entails features of building or, sadly, dismantling social equity.

Like all whose life’s work relates to solving for climate change risks, I am thrilled not only by the TCFD’s pragmatic approach, but also by the demand it has inspired in the financial markets, segments of which are getting a better handle on their climate risks. There are many actions the market can take. Let me suggest one: In those places where your portfolio is most at risk, ask your risk analysts what will happen to community assets when your portfolio or elements of your value chain move away from the physical risks.

Quantify disbenefits to reputation, workforce, customers and duty to care. Then, consider what an investment in vulnerable communities’ resilience might mean in terms of reputation, workforce and consumer benefits. Do you have the mettle to go beyond the norm and make those investments that build resilience for all rather than avoid risk for some?

Here are three key recommendations to avoid perpetuating a world where particularly vulnerable communities are disinvested in as the market moves from climate change risks:

1. TCFD should add social equity considerations to its list of “Key Issues Considered and Areas for Future Work.”
2. Economic powerhouses such as Vivid Economics, which weighed in on economic impacts of physical climate change risks in the UNEP-FI report above but did not mention social equity, should crunch some numbers about the market impacts of disproportionate climate risks and compare these human scenario-based outcomes with climate change scenarios.
3. All thought leaders in this space should continue to find bridges between questions of social and financial equity. Here’s a start from an article I wrote earlier this year: 6 Steps for Building a “Sweet Spot” Where Social and Financial Equity Meet.

So, how do you recommend we challenge ourselves to make social equity a part of the conversation – and the solution to physical climate change risks?

This post originally appeared on Triple Pundit: https://www.triplepundit.com/2018/08/tcfd-guidance-exacerbating-social-inequity/

6 Steps for Building a “Sweet Spot” Where Social and Financial Equity Meet

Equity means quite different things to two stakeholders I work with the most:

• Investors who deal in debt and equity and seek to benefit from the risk and opportunity that climate change creates.
• Urban planners and nonprofits dealing in social equity and cohesion and eager to prevent harm based on risk and opportunity created by climate change.

Will these two paths converge in the wood, as Robert Frost put it? Or, is it never the twain shall meet as Kipling expressed it?

According to the United Nations-supported Principles for Responsible Investment, $70 trillion (U.S.) of assets under management integrate environmental, social and governance (ESG) factors into core operations. But, peeling back that good news, would we see more social equity ensuing?  By and large, the positive and negative implications on communities of climate change aren’t being addressed.

I frequently note that climate change exacerbates the tale of two very different futures – rich getting richer from extraordinary resources for resilience and poor getting poorer due to precarious resilience in everyday circumstances.  What would it take for those two futures to cause investors to integrate social equity into their climate strategies, creating what I call Finance “Adaptation Equity?”

First, though, they would have to grasp – and care about – social equity issues. Those investors already trying to achieve sustainability goals are likely to see social equity as material to financial equity because it:

1. Accomplishes two ESG pillars – Environment and Social – that link the mitigation of physical risks of climate change with the enhancement of communities. Think of aligning with international standards related to human rights or the 17 U.N. Sustainable Development Goals.
2. Unveils new investment opportunities in physical assets that can enhance community equity such as infrastructure and real estate.
3. Responds to an admittedly small group of impact investors who focus on beneficiaries and aim for responsible investment to be defined by social equity.
4. Portends new pathways for longer-term investors (e.g., pensions) and development funders (e.g., blended finance teams) to apply their assets to climate and inequity affected sectors and regions.
5. Enhances understanding of systemic risks within the financial ecosystem by connecting climate change and inequity, especially given that without concerted effort, climate change will make inequity worse – and inequity has been proven to impact markets.

Still, for finance equity to flow to social equity requires work. Here are three strategies for each.

Investment equity

1. Include social equity principles in investment policy statements and goals as well as in requirements for consultants and advisors. Ask, “Will this asset improve the lives and livelihoods of lower resourced communities?”
2. Make social equity a part of risk mitigation assessments for climate-exposed assets, broadening the scope of the Task Force on Climate-Related Financial Disclosure guidelines to ensure that social elements are privileged.
3. Insist social equity be part of green bond project frameworks, asking if the infrastructure asset will have an equal or greater number of lower-resourced beneficiaries.

Social equity

1. Include means to raise fees and taxes related within social equity projects to make them more attractive to financiers. Ask, “How can we make this project a revenue generator?”
2. Make calculations that show the market benefits of social equity in your geographies and communicate them to public and private stakeholders.
3. Insist that social equity be part of financial assessments for infrastructure and other projects by being present at negotiations and integrated design discussions.

As efforts create successes, failures and draws, both groups should communicate action on social and investment equity with their clients and beneficiaries to help build this field of practice.

This post originally appeared on Triple Pundit

A Tale of Two Countries Illuminates the Necessity of Preparation

This post originally appeared in Triple Pundit: http://www.triplepundit.com/2017/10/calamitous-climate-tale-two-countries-illuminates-necessity-preparation/

In one month, three historic hurricane touched ground in the U.S. Now tragic wildfires surge in the west, intensified by an epic drought. Likewise, in France, 80 counties faced drought in August, 14,000 hectares of wildfires so far in 2017, more than double the traditional toll. As this extreme weather continues to dominate the headlines, what can city leaders do to protect their communities – and using municipalities in the U.S. and France as examples?

It’s worth exploring. But, first we should mull two critical climate questions that serve as foundations for our exploration. Are the enduring structures we build able to withstand climate change? And are climate risks and opportunities shared equitably within our communities?

And to be clear about the risks we face, they generally fall into three categories:

·      Increasing mean temperatures and frequency of extreme heat: Scorching hot days and nights grow more frequent, along with the intensity and length of warm spells and heat waves. High temperatures dry vegetation and soils, potentially sparking more frequent fires, landslides or subsidence. Droughts become more frequent, threatening water supplies and aggravating conditions for wildlife. Increased heat hurts outdoor workers’ productivity and exacerbates illnesses, such as asthma and chronic pulmonary obstructive disease.

·      Increasing extreme precipitation and floods: The timing, amount and type of precipitation is changing, causing more intense seasonal rain or snow and flooding. Floods can break down electricity, transport, water, sewage and telecom networks, triggering economic damages, especially from disrupting business continuity.

·      Rising sea levels: Hotter air temperatures raise sea levels as warmer and less dense seas expand and polar ice sheets melt. Higher sea levels increase the risk of coastal storm surges and push salt water into wetlands, higher up tidal rivers and deeper into groundwater systems. This submerges property and damages infrastructure.

C40 – the network of global cities collaborating to provide climate solutions for their residents – offers a helpful climate hazard taxonomy to view these primary hazards and their related city climate hazards. 

(ref: http://www.c40.org/researches/city-climate-hazard-taxonomy p.4)

So, how are cities to respond to the two climate questions? Here are five categories of municipal endeavors with examples of success from both France and the U.S.:

1.     Disaster risk reduction

Integrating disaster risk reduction into urban development policies and practice requires a new, systems-oriented, multi-timescale approach to risk assessments and planning. It’s necessary to reflect emerging conditions within specific, more vulnerable communities and sectors as well as across entire metropolitan areas.

Baltimore’s Office of Sustainability is taking steps to ensure that families, especially those in under-resourced communities, are prepared to respond to emergencies. Its “Make a Plan, Build a Kit, Help Each Other” events let residents create emergency plans and essential preparedness and grasp how to respond in emergency.

2. Adaptations while reducing greenhouse gas emissions

Integrating mitigation and adaptation is a high priority for cities in planning, design, and architecture. Engineering, ecosystem and social-based solutions should be considered to generate actions with the greatest benefits.

For instance, in April 2017, New York City released preliminary Climate Resiliency Design Guidelines to support stronger and safer infrastructure and building designs in a hotter, more extreme weather- and flood-prone world. The guidelines incorporate predictive climate data into all city capital projects to anticipate hotter heat waves, heavier downpours and sea level rise. For instance, they use light-colored and reflective pavement and roofs, shade trees and other landscaping to decrease the urban heat island effect. They also decrease energy use for cooling and set storm drainage standards that require permeable pavement and other green infrastructure to increase stormwater absorption.

The Clichy-Batignolles urban project in the Paris area built a “climate-proof” urban area that is both attractive for residents during the summer time and able to absorb precipitation during heavy rain periods. A 10-hectares park – open 24 hours a day with pools, drinking fountains, water jets, along with cooling buildings that reflect sunlight and have green roofs, etc. – has reduced energy demand and stormwater treatment. The volume of stormwater treatment declined by 50 percent.

3. Risk assessments and climate action plans co-generated with the full range of stakeholders and scientists.

Processes that are inclusive, transparent, participatory, multisectoral, multijurisdictional and interdisciplinary prove to be the most robust because they enhance relevance, flexibility and legitimacy.

Cleveland’s asset-based Neighborhood Climate Action Toolkit was created in partnership with community development corporations. It helps residents to identify and advance neighborhood priorities that further the city’s climate action goals. In addition, Minneapolis unites community representatives and city staff to plan its Green Zones initiative. They actively avoid deficit-based planning, which focuses on the community’s vulnerabilities, and are building on existing community assets via access to a wealth of community knowledge and networks.

Paris’ adaptation strategy reflects a long process (2010-2015) that mobilized all departments and many institutional, operational and scientific partners. Key aspects of its design and application include raising awareness and recognition of the collective benefits of adaptation. In 2010, the exhibition, « +2 °C… Paris s’invente » (Plus two degrees Celsius, Paris invents itself) demonstrated how concrete adaptation will benefit all Parisians through development of a science-based adaptation strategy against extreme events and to ensure food supplies and foster a more sustainable city. The strategy included more than 100indicators (e.g., the number of Parisians who live more than seven minutes walking distance from a cool space; the number of free drinking fountains in Paris, the surface area in an electrically fragile zone in case of massive flooding).

4. Needs of the most disadvantaged and vulnerable citizens.

Greater climate change impacts impact the urban poor, elderly, minorities, recent immigrants and, otherwise, marginal populations. Equity and justice improve wellbeing and social and economic development are foundational to effective climate change action.

In Seattle, city and community leaders seek to deepen connections between race, social justice and environment. The Equity & Environment Initiative created The Community Partners Steering Committee to “ensure that those most affected by environmental inequities would lead in creating the agenda.” This process has highlighted community priorities that create climate action and social cohesion, including safety and walkability, public transit, green space and gardens and youth programming.

In Nice, social services put a targeted action plan in place affecting those most sensitive to climatic crisis. A database registered the most isolated and vulnerable based on medical and social services networks and local media. So, during heat waves, volunteers call and visit the most vulnerable residents every other day, offering advice on good practices to combat high temperatures. This initiative reduces the sensitivity of isolated and vulnerable people and increases the social link and solidarity between youth and elderly.

5. City climate adaptation described in terms of lives, livelihoods and dollars saved.

Quantifying the benefits of climate adaptation proves essential to attract future capital. Such access to both municipal and outside financial resources funds climate change solutions. Sound urban climate governance requires longer planning horizons, effective execution mechanisms and coordination. Connecting with national and international capacity-building networks helps to advance the strength and success of city-level climate planning and implementation.

Resources for the Future quantified the benefits of a green infrastructure investment around St. Louis on the Meramec Greenway. They figured the benefits reduced flood damage and enhanced property values by amounts three times greater than the flood damage-reduction benefits.

By buying property in urban areas from families who had been flooded often and volunteered to participate, Missouri saved roughly $100 million—earning a 212 percent return on its buyout investment.

Albuquerque and Santa Fe, New Mexico, as well as several Indian tribes worked with federal and state governments, water managers and companies to create the public/private Rio Grande Water Fund to restore forests and to pay for clean water protection and forest thinning to decrease the threat of wildfires.

Washington, D.C., issued the performance-based Environmental Impact Bond to reduce flood risks and ensure that city residents have access to clean water. Funds are invested in green infrastructure and paid back to social impact investors as performance targets are met.

Insurance company FM Global estimates that businesses that made a $7,400 investment to reduce extreme weather risk ahead of Hurricane Katrina averted an average of $1.5 million in losses.

Cities must start immediately to develop and apply climate action

We are in the greatest period of urbanization and rapidly changing climate in recorded human history. Cities that ask the climate adaptation questions now and take steps such as those described above will create the transformation that saves lives and livelihoods in the face of climate shifts. In the process, they will avoid counterproductive maladaptations; help deter locking-in that can damage long-lived investments and infrastructure systems; and ensure cities’ potential for the transformation required to lead climate change. Cities that create resilience will avoid being in the headlines after disasters. Rather, as Chicago has, they will begin to tout their resilience as a business asset. 

Joyce Coffee is president of Climate Resilience Consulting, working with leaders to create strategies that protect and enhance markets and livelihoods through resilience to climate change. Rachel Jouan is founder of Climate Adaptation Consulting in France, working with local, national and international governments to increase resiliency through adaptation to climate change.

Paying for Resilience: Market Drivers and Financial Means

When I worked for the City of Chicago applying its Climate Action Plan, our work was funded by the lack of climate resilience: The City had successfully sued the electric utility for failing to provide service during an extreme heat event, and the settlement paid for many staff and climate-related. That’s a rare situation, though. Today, requests from cities, nonprofits and philanthropy to figure out finance to help fulfill resilience dreams fill my inbox.

In the last few months, I’ve offered counsel to cities as diverse as Minot, N.D. (at the invitation of FEMA), Miami Beach (at the invitation of the Urban Land Institute) and Buras, La. (at the request of the Rockefeller Foundation 100 Resilient Cities). Speaking with these local and innovative government leaders has helped me refine my own understanding of the current state of resilience finance in the U.S.

Here are at least four market inspirations I have gleaned that could drive more resilience finance:

1. In its report “Climate Adaptation and Liability,” the Conservation Law Foundation unveils numerous cases describing a new era in the “duty to care” for designers, real estate professionals and municipal government officials as events that future climate scenarios envision replace force majeur events.
2. Although the federal National Flood Insurance Program distorts price signals in the risk transfer elements of the market – and I strongly encourage you to engage on its reauthorization, perhaps starting by reviewing this excellent piece – in such highly vulnerable markets as Houston and Miami, an insurance price signal is emerging as flood insurance premiums rise faster there than elsewhere.
3. Credit rating. Moody’s and Standard & Poor’s have made announcements that the physical risks from climate change will be factored into municipal credit ratings, and S&P has been clearer about this impact, for instance as shown in the article How Our U.S. Local Government Criteria Weather Climate Risk. Municipalities don’t want their debt to be more expensive and, therefore, less attractive to investors, so this is a big deal.
4. Big data. With the emergence of big data modelers such as Airworldwide, RMS and Core Logic in the past decade, more financial services professionals will have growing access to the cost of both actual and avoided loss from extreme events. While cities cannot afford these big modelers, financial sector parties are applying them to city problems and generating new methods to create “bankability” – revenue generation from projects that traditionally don’t generate rates or fees. For instance, resilience bonds, described in a very approachable way by re:focus partners in this report, link future insurance savings to a bank of funds for current risk mitigation projects.

Along with these drivers, progress continues in the debt market, creating more means to fund city resilience. Most importantly, that headway should include a swift pivot of general obligation bonds from traditional investments that neither create collateral benefits nor consider climate change scenarios to resilience investments promising more long-term return and performance given future risk. That is really the only way to ensure we create resilient cities. But with close to 80,000 issuers of municipal bonds in the country, the four key drivers above are key for ensuring this transition.

At the same time, the growth of innovative bond mechanisms could also help cities increase funds for resilience. The District of Columbia has had success with green bondsfor its water and sewer authority, while the Massachusetts Bay Transit Authority has created excellent examples of sustainability bonds’ utility. The resilience bonds mentioned above are another in this category. Of course, catastrophe bonds – some with hurricane triggers – are another insurance-linked mechanism for getting money to cities after disasters.

In a future post, I will suggest ways cities can invite more resilience finance, given these market levers and financial means.

This post originally appeared on Triple Pundit.

Credit Rating Agencies Assess the Physical Risks of Climate Change

What about credit rating agencies as a market actor to inspire climate resilience? Already, the 11 recommendations by the Task Force on Climate-Related Financial Disclosure – sorted into Governance, Strategy, Risk Management and Metrics/Targets – are sinking into the market.  Many are turning to the credit rating agencies and asking them if they are even looking for information on climate risk and what they’re doing with any they find.

As I reported in late 2016 in a Triple Pundit article, “Laurels for Credit Rating Agencies, Levers of Change in the Adaptation Market,” the rating agencies have been exploring this subject for several years.  Last November, Moody’s Investors Service explained how it incorporates climate change into its credit ratings for state and local bonds. It said that cities and states are at greater risk of default if they don’t deal with risks from rising seas or strong storms.

So, what specifically should we expect from the rating agencies?  I recently participated in a Brookings Institute panel with Standard and Poor’s Managing Director Kurt Forsgren, who said that the S&P will increasingly consider climate change in its rating analysis.

Climate change risk and credit rating agency assessment

Today, in factoring climate change risk into municipal ratings, the rating services focus primarily on management effectiveness and planning that includes climate change risk. This is especially true in sectors with distinct climate risks that apply to their assets or revenue sources (such as water and electric utilities).  They often perform a qualitative assessment of the climate change risk when detailed information is lacking.

In addition to risk, they assess municipal resilience that looks for:

• Long-term management plans with adequately funded emergency funds
• Proper insurance coverage for the climate related risks for the region
• Deeper and more diverse economies

Evidence from Utility Districts

But, in reality, what are they seeking? For instance, S&P analysis for corporate ratings indicates that natural catastrophes lead to a one-notch downgrade 40 percent of the time. We know that the Municipal Utility District (MUD) ratings in and around Houston did not take a near-term hit in S&P’s assessments immediately following Hurricane Harvey, although the agency notes that it does “not preclude longer-term [rating] challenges for Hurricane []- affected [] MUDs.”

S & P’s specific comments for the MUDs are instructive for all build projects, planned or in place: “S&P Global Ratings believes the largest potential long-term rating impact to MUDs would be caused by a decline in the district’s assessed values, which support not only operational revenue but also the district’s ability to pay its debt burden, which is a primary driver for our MUD ratings.”

It added: “MUDs with comparatively higher tax rates may face some practical taxing limitations as affected areas adjust their tax rates to compensate for declines in assessed values.”

Although S&P believes the robust reserves of most MUDs will insulate them from rating downgrades, the impacts they expect from climate disruption are pretty clear here. Credit rating agencies see the physical impacts of climate change as material to the financial system. The larger the shock event, the longer and deeper the impact on credit quality, especially for those with poor credit quality before the event.

This is a major reminder about the importance of resilience.  Communities struggling with poor credit quality will find it doubly difficult to borrow at favorable rates as the impact of climate change continues to grow – further exacerbating both market and social inequities.

Resilience Likely Helps

It seems we have the market signal we’ve been waiting for in the climate action community. This is a call to arms for all resilience brokers to build security, stability and sustainability in lower-resourced communities.

The key actions:

1. Get ahead of climate risk by making knowledge of it front and center for existing physical asset and future investment planning.
2. Collaborate among sustainability, risk, finance and insurance leaders internally and externally; climate change is no longer an issue to shift to the sustainability officer’s desk.
3. Through actions one and two, make sure that every investment is an investment for resilience, not just a few show ponies.

References:

S&P Global “Near-Term Rating Stability Does Not Preclude Longer-Term Challenges for Hurricane Harvey-Affected Texas MUDs” 5 September 2017. https://www.spglobal.com/our-insights/Near-Term-Rating-Stability-Does-Not-Preclude-Longer-Term-Challenges-for-Hurricane-Harvey-Affected-Texas-MUDs.html

S&P Global “How Long ‘Til We Get There? Major Post-Hurricane Recoveries in Recent Years.” 7 September 2017. https://www.spglobal.com/our-insights/How-Long-Til-We-Get-There-Major-Post-Hurricane-Recoveries-In-Recent-Years.html

S&P Ratings Direct, “Climate Change Will Likely Test The Resilience Of Corporates’ Creditworthiness To Natural Catastrophes”, 20 April 2015. http://www.actuarialpost.co.uk/downloads/cat_1/SP_Climate%20Change%20Impact%20On%20Corporates_Apr212014.pdf

This op ed originally appeared on Triple Pundit

We Survived Climate Change Eons Ago, but Could We Survive Today? Not Unless We Act Much More Swiftly Immediately

This article originally appeared on Triple Pundit. 

A compelling ad for The Great Course on investing shows a man’s hands grasping a giant golden egg. It reminds me of the ever-present effort to learn from the past. Yet, with climate change, have we learned valuable ancient lessons or are we doomed to repeat past mistakes?

We humans survived an abrupt shift in the climate to bitter cold conditions 11,000 years ago and, in brilliant pictographs, Egyptian pharaohs related how they survived epic drought. Paleontologists and anthropologists find in the historic record of bones, household implements and living quarters that abrupt and harsh changes in climate over decades forced populations to move to survive. These climate disruptions also triggered population crashes and cultural changes.
Researchers speak of the intrepid prehistoric humans the way we speak of today’s preppers: “These hunter-gatherers had a lot of skills and knowledge of how to use the natural resources. They could make shelters and houses and hunt, fish and collect plant materials.” Some at a well-researched site in northern England practiced and endured enough resilience that they did not have to abandon their homes or significantly change their way of life. A certain deer species appears to have been the primary food and clothing source that enabled them to withstand the cold.

Advanced Planning
Researchers also discovered that ancient civilizations planned for and promulgated policies – including cross-breeding animals to make them drought-tolerant and moving their agricultural heartlands to more verdant areas – to withstand a hundred-year drought. They were able to help their neighboring former enemies to prevent the worst of a famine. Still, we cannot know exactly how prehistoric and ancient humans persevered.
Several researchers think a major key to their survival was that for generations, they survived climate shifts. It had become a part of their lives so they recognized signs of change and prepared to help their communities survive.
By contrast, we have experienced many centuries of fairly stable climate. We not only are out of practice employing resilience to these extremes, but it appears we’re devoid of imagination as a society for what we ourselves have wrought and must do to prepare.
Today, climate disruptions definitely impact us. Consider:
” Health: Asthma cases have risen dramatically. Between 2001 and 2009, the number of patients diagnosed with asthma rose by 4.3 million, according to CDC reports. It is a leading cause of school absences across the country.
” Quality of Life: Extreme heat was the leading cause of weather-related deaths – more than 1,200 – in the U.S. between 2004 and 2013. The extraordinary heat wave that killed some 70,000 people in Europe in 2003 should have been a once-in 500-year event. At the current level of global warming, it has become a once-in-40-year event.
” Housing: Hurricane Irma destroyed one-of-every four homes in parts of Florida while over half of residential and commercial properties in the Houston metro are now considered at “High” or “Moderate” risk of flooding.
Like those ancient peoples, we have the perfect storm of events. They grappled with earthquakes, climate disruption and, consequently, invading neighbors. We confront earthquakes, deep societal inequities and pressing issues of a changing climate.
So, here is where we are at in terms of adapting to climate change. The assessment reflects a study of 100 Adaptation projects and leaders that I conducted with Dr. Susanne Moser and other researchers in 2017, funded by the Kresge Foundation
The positive view:
Some adaptation practices are underway and climate impacts are driving them. New actors and networks have energized the adaptation field, including such city networks as the Urban Sustainability Directors Network and 100 Resilient Cities. Adaptation also improves in certain areas: the adaptation knowledge base and increasingly available tools supporting adaptation. In addition, science and practice work together more frequently as leaders experiment with adaptation.
The negative view:
Driven largely by crises, the adaptation field is not creating a unifying vision/creative imagination for a future where people adapt and thrive. Adaptation remains mostly reactive rather than proactive. A sense of urgency is missing, and too many adaptation efforts are stalled at the planning stage. The prevailing emphasis on urban adaptation leaves small towns and rural areas behind and neglects important interdependencies between cities and surrounding areas. And while awareness grows as to the disproportionate impact of climate change on the most vulnerable-and the need for equitable solutions-few adaptation actors grasp how to incorporate equity into their work.
The future:
To avoid becoming the culture that fails, even in comparison with than prehistorical and ancient civilizations that survived climatic changes, we must accelerate mitigation and adaptation efforts significantly while building social cohesion and equity. This will close the yawning chasm through which we could fall. Today, the planet’s average surface temperature has risen about 2.0 degrees Fahrenheit since the late 19th century, and models predict it may rise by tens of degrees – indeed, 30 degrees Fahrenheit in some places – by century’s end.

We must strive to prevent, minimize, and alleviate climate change threats to human well-being and to the natural and built systems on which humans depend. It will prove exciting to fulfill this mission because by doing so, we create fresh opportunities to address the causes and consequences of climate change in ways that solve related social, environmental and economic problems.
But to achieve this, we must expand the number and type of leaders involved in helping communities adapt. Increase our capacity and tools of persuasion to make adaptation work more impactful. Ensure that the funds spent and policies enacted are in line with achieving this mission.

Egyptologists who study that empire’s collapse caution that when leadership “has feet of clay and isn’t willing to take the challenge on in an innovative way, then often the challenge will overcome them.”Today in our democracy, that leadership lies with all of us. We must create transformative change. And be brave and uncomfortable in embracing the challenges of both social inequity and climate uncertainty as we do so.

Pray that in the timelines of geology, climate and human history, we can pivot from a relatively stable climate to one that mirrors nothing humans have experienced historically. Our survival in the new era of climate change depends on it.

Joyce E. Coffee, president of Climate Resilience Consulting and a Senior Sustainability Fellow at the Global Institute of Sustainability (GIOS) is recognized globally for thought leadership in climate adaptation and strategies for improving corporate and government resilience.

Who Owns the Physical Risks from Climate Change? (And What One Move Can Make It Less Risky?)

This article originally appeared in Triple Pundit

We hear a lot about how the anticipated rise in sea levels could trigger significant increases in hurricane-related financial losses. But who pays that cost? Who, for instance, is bearing the cumulate expense of the 16 U.S. weather events in 2017 estimated at over $306 billion, far exceeding the previous record of $214.8 billion in 2005? It’s not immediately clear. And the financial markets haven’t yet clarified who owns our risky future.

So, let’s first consider who comprises the potential financial risk holders, assuming the physical risk is coastal flooding:

• Insurance/Reinsurance companies who transfer risk from property to market.
• Homeowners handling the aftermath, from soggy basements to ripped-off roofs.
• Developers, the decision-makers who place buildings in and out of harm’s way.
• Utilities, the critical service providers who rely upon conduits of every sort to transport water, energy and vehicles with revenue generated through fees.
• Cities and municipal governments: owners of property and caretakers of constituents and the last line of the government safety net and taxation.
• National governments, the agents of emergency management and loans and grants through various government mechanisms.
• Engineering and construction companies that design and build using vulnerability data.
• Lenders who use the collateral of buildings to offer debt finance to property owners.
• Investors: They place bets on the market, often without knowing who and what the actual investment is and does.
• Taxpayers who, especially for federal taxes, pay for distant emergency relief and reconstruction through programs like the national flood improvement program.

Regarding the recent storms, where in the market are we seeing this risk ownership? First, there are the householders and other property owners, insured or not, who are replacing their material goods after extreme events. Second, insurance companies are transferring some risk away from the property owners into a large pool of insured from diverse geographies. Third, the federal government that pays out through national flood insurance and other programs of one sort of another. (Ultimately, of course, the risk is held by us property owners who pay insurance and taxes.)

But, let’s examine what each of these three players could do to decrease the risk to the marketplace sparked by climate change:

Insurers

Can insurers better inform the market as investors as well as underwriters? As investors, the insurance industry continues to develop?As specialists in risk

identification, risk prevention, risk mitigation and post event recovery, the industry employs Smart Risk Investment principles to, among other things, redefine “green finance” as “smart risk investing” and increase the volume of such investments. This should allow them to bring in all investable asset classes and overlay the risk managementand pricing knowledge to the asset side from the underwriting side of the insurance sector balance sheet.

Of course, as underwriters, insurers can decrease risk by sending a market signal, although the price of risk from those particular assets is higher than others. Already, we see this happening somewhat.

Taxpayers

Taxpayers play several roles. First, they can harness relatively new tools to make better decisions, especially about where they purchase property. For instance, residents of Florida and Virginia should check out the free https://floodiq.com/. Second, primarily as voters, they can decrease risk by influencing ele

FEMA 2016 in Reuters view: https://thinkprogress.org/bloomberg-coastal-real-estate-638716394641/

ction outcomes and voicing concerns to local, county, special district, state and federal elected officials. Those concerns can range from land use changes in the zoning code to prevent more coastal development and requirements for resilient infrastructure to changes in the federal insurer-of-last-resort process to decrease reconstruction of properties that flood repeatedly.

National Government

Speaking of which, in the U.S., the National Flood Insurance Program needs reform, which may explain why it’s reauthorization was kicked down the road in September and remains outstanding. An informatively whitepaper, Strengthening the National Flood Insurance Program, largely written by Georgetown Climate Center’s Jessica Grannis, addresses the key issues of adaptation equity and provides ways for taxpayers to avoid paying for the continual rebuilding of property in harm’s way.

Solution

The June 2017 guidelines by the G20 Financial Stability Board Task Force for Climate-related Financial Disclosures are a useful start. This series of recommendations sets out a voluntary, consistent disclosure framework for climate-related disclosures so that companies report on physical climate-change risks that affect business, operations, and financial conditions. But, for us who are a bit more distant from the G20’s big business, what shall we do?

One suggestion is that every decision-maker– from homeowners to mortgage bankers like Fannie Mae – integrate “stress-testing” into their decision-making and, for instance, ask what the impact would be of a one percent event on their portfolio. The insurance industry as underwriters, in an effort precipitated by Hurricane Andrew in the early 1990s, initiated such a process, which they call the one-in-100-year stress test. Arguably, it contributed to the continued strength of that market sector even after significant hazard -event years such as 2017 (when Hurricanes Maria, Harvey, Irma and Maria, fires and related mudslides created demand from policyholders for insurance payouts).

What might this one practice deliver? Could it include these outcomes? A reduction in the construction of new risky buildings in flood prone areas; improved returns (at systems-level) of allocated capital since less money would be wrapped up in risky business; acceleration of collaboration across sectors to decrease the one percent event causing harm; reduced vulnerability of communities and a signal that it was a good investment to focus on resilience technologies, innovations, products and services.

What do you think?