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What is climate risk for investments? Photo: flooding in yorkshire, UK.

What is climate risk for investments? Photo: flooding in yorkshire, UK.

Scientists and leading investors join forces to explain climate risk

News - News from CICERO

Published 18.05.2016

CICERO launches a meeting place for climate scientists and leading global investors to improve the understanding of climate risk. Jointly, they will develop tools to incorporate climate risk in long-term investments, tailored to investors’ needs and inspired by the latest climate science.

 

Climate risk and sustainable investment are ever higher on the agenda in many financial environments, but climate change researchers and financial stakeholders do not always speak the same language. Our goal is to bridge that gap and jointly develop solutions

Kristin halvorsen, director and former Norwegian minister of finance

A warmer planet with more extreme weather could affect the value of investments, while a shift from a fossil fuel-based economy to low-carbon solutions because of more stringent climate policies could change the investment landscape. CICERO Climate Finance will work with investors to improve information flows on climate risk.

"As we seek to expand our evaluation of the risks portfolios face from climate issues, both from a transition and physical perspective, we look forward to continuing to benefit from CICERO’s climate expertise while sharing with them what metrics are most meaningful to investors. We have worked previously with CICERO on our impact reporting efforts in the green bond space and found they were able to interpret our needs as an investor and help us understand and evaluate environmental metrics,” said Ashley Schulten, Head of Climate Solutions at BlackRock, the world’s largest private investor.

"With green bonds issued by the World Bank and others, investors can support climate action through a simple fixed income product. CICERO's second opinion was a key part of the green bond model developed for the first World Bank Green Bond together with SEB in 2008, which has helped the market diversify with integrity. We look forward to continuing our collaboration with CICERO to expand the opportunities for investors to support climate finance," said Heike Reichelt, Head of Investor Relations and New Products at the World Bank.

BlackRock and the World Bank Treasury, as well as Scandinavia’s biggest financial actors and leading climate finance experts have signed up for the Advisory Board that will inform and support the work of CICERO Climate Finance. The centre will work on various solutions and approaches: for instance, looking beyond carbon reporting to good management practices for climate risk, and mapping climate scenarios and impacts to sectors and regions.

CICERO Climate Finance will build on and utilize the nexus of climate finance expertise in Norway, expanding on this experience and extending it to international actors and activities.

børge brende, norwegian minister of foreign affairs

The Norwegian Ministry of Foreign Affairs provides start-up money for the initiative. “Climate finance is key to meeting the adaptation and mitigation needs of developing countries. Private climate finance flows to developing countries are already quite significant. However, much more is needed. CICERO Climate Finance will build on and utilize the nexus of climate finance expertise in Norway, expanding on this experience and extending it to international actors and activities,” said Foreign Minister Børge Brende.

Yngve Slyngstad, CEO of the Norwegian oil fund, officially the Government Pension Fund Global, will open the launch meeting of CICERO Climate Finance at Oslo stock exchange on 19 May 2016.

For more information on CICERO Climate Finance, go to the centre's website.