Climate Risk Podcast

Hear from Carys Taylor, Director of BAFTA's albert programme, as we explore the issues of climate change and sustainability through the lens of film and television.

The film and television sector may not have the biggest carbon footprint, but it still has an important role to play in the transition to net-zero. With 70% of the global population owning a TV, the film and television industry can have a significant influence on public debate.

Moreover, changing demographics and technology are pushing the industry to consider the viewing habits and preferences of a younger, more climate-conscious generation. That's why in today's episode, we'll take a closer look at the challenges and opportunities facing this sector, including:

• The decarbonization of the $200bn per year content production industry,
• How it is adapting to changes in the way we watch and consume content,
• And the challenge of using its influence responsibly.

For more information on climate risk, visit GARP's Global Sustainability and Climate Risk Resource Center: https://www.garp.org/sustainability-climate

If you have any questions, thoughts, or feedback regarding this podcast series, we would love to hear from you at: [email protected] Links from today's discussion:

- albert's homepage - https://wearealbert.org/

- albert's carbon calculator and production certification - https://wearealbert.org/carbon-calculator-and-production-certification/

- [Contains spoilers for HBO's Succession] Succession's plot twist prompts surge of interest in leaving money in wills to Greenpeace - https://www.theguardian.com/environment/2021/nov/27/successions-plot-twist-prompts-thousands-to-leave-money-to-greenpeace-in-their-wills

- [Contains spoilers for 1917] The albert certified production of 1917 - https://wearealbert.org/2020/01/10/how-big-budget-film-1917-achieved-certification/

Carys Taylor, Director of albert

Carys Taylor is the Director of albert, the home of sustainability for the TV and film industry. Prior to taking up the role, Carys was at National Grid where she worked on solutions to decarbonize transport, the biggest contributor to UK carbon emissions. She is no stranger to the TV industry however, having also worked at BBC Studios as an advisor to Tim Davie, advocating for the UK's creative sector.

Hear from Jo Paisley and Maxine Nelson of the GARP Risk Institute as they look back on key learnings from the latest season of the Climate Risk Podcast.

As we head into 2023, Maxine and Jo once again join forces to review the latest season of Climate Risk Podcasts, gleaning key insights from each guest and discussing ongoing trends in climate risk management.

From scientists to CEOs, asset owners to archaeologists, we've upheld our promise to showcase a variety of different perspectives on climate risk and sustainability. This episode re-examines the rich knowledge that has been shared on the Climate Risk Podcast over the last 12 months, creating a narrative of climate risk wisdom to guide our listeners through this fast-moving field.

In today's episode, we will discuss:

• What we've learnt about risk, vulnerability, and exposure;
• How well the financial sector is supporting the transition to a net-zero world;
• And what advice our guests offered to risk and finance professionals.

Links from today's discussion:

• Andy Smith and Matt Jones - 30 Years of Catastrophe Modelling: Lessons for Risk Professionals
• Julie Pullen - The Oceans & Climate Explained (and Why it Matters to Finance)
• Kevin Dooley - Supply Chains: Why Sustainability is the Best Form of Risk Management
• David Victor and Danny Cullenward - How Politics Shapes Climate Policy: Insights for Risk Professionals
• Emily Shuckburgh - Data, AI, and Innovation: Insights from the Frontiers of Climate Science
• Brian Fagan - 30,000 Years in 30 Minutes: Climate Risk from an Archaeologist's Perspective
• Bruce Usher - Investing in the Era of Climate Change
• Sean Kidney - The Green Bond Market Explained (And Why Investors Do Need to Worry About Climate Risk)
• Alan Smith - Culture and Capability: An Asset Owner's Guide to Net Zero
• Eila Kreivi - EU Taxonomy for Sustainable Finance: Everything You Wanted to Know, But Were Too Afraid to Ask
• Mark Campanale - Achieving Net-Zero: Reframing Climate Change as a Supply Side Issue
• William McDonnell - The "Net" of "Net-Zero": Making Voluntary Carbon Markets Work and Christmas Climate Book Club Special

Jo Paisley, President, GARP Risk Institute

Jo has worked on a variety of risk areas at GRI, including stress testing, operational resilience, model risk management and climate risk. Her career prior to joining GARP spanned public and private sectors, including working as the Director of the Supervisory Risk Specialist Division within the Prudential Regulation Authority and as Global Head of Stress Testing at HSBC. Maxine Nelson, Senior Vice President, GARP Risk Institute

Maxine currently focuses on climate risk management. Previous roles have included operational risk modelling at NAB, leading KMPG London's credit risk team, senior consultant at Oliver Wyman, responsibility for counterparty credit risk at the UK Financial Services Authority, and Global Head of Wholesale Risk Analytics and Head of Capital Planning at HSBC.

Hear from members of the UK's Climate Financial Risk Forum, as we dive into their brand-new publications on climate litigation and physical risk.

Part 1 | Litigation Risk Underwriting Guide | 00:00:00–00:15:54

Part 2 | Physical Risk Underwriting Guide | 00:15.54–00:36:13

The Climate Financial Risk Forum (CFRF) was set up in 2019 by the UK's Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), to build capacity and share best practice across industry and the regulators to advance the sector's responses to the financial risks from climate change.

In this special episode, we discuss the CFRF's Litigation Risk and Physical Risk Underwriting Guides, which are available from 9 December 2022. The guides focus on risks that are particularly pertinent to the insurance industry, but are highly relevant to many financial firms. The guests were all heavily involved in producing these publications, so they'll be sharing their thoughts and insights as a compliment to the papers themselves.

For the litigation portion of this episode, we will discuss:

• Why climate litigation risk deserves special attention from insurers;
• How financial firms are reacting to the fast-changing litigation landscape; and
• Key recommendations for financial institutions trying to understand their exposure to this risk.

And for the physical risk portion, we will discuss:

• The distribution of physical risks globally relative to the distribution of global insurance;
• The challenges of modelling complex hazards from climate change; and
• The capabilities that financial firms can build and the strategies they can adopt to deal with highly uncertain risks.

Links from today's discussion:

• CFRF's Litigation Risk Underwriting Guide
• CFRF's Physical Risk Underwriting Guide
• Other CFRF 2022 publications
• Results of the 2021 Climate Biennial Exploratory Scenario (CBES)
• Nigel's previous appearances on the Climate Risk Podcast and the Climate Risk Webcast
• Grantham Institute's 2022 Global Climate Change Litigation Snapshot
• Geneva Association's 2021 Global Report on Climate Litigation
• UN's Net-Zero Insurance Alliance (NZIA) homepage

Nigel Brook, Partner, Clyde & Co.

Nigel has been a partner at Clyde & Co since 1985 and heads the firm's reinsurance team. An international insurance and reinsurance disputes specialist with over 30 years' experience, Nigel is considered by many to be one of the top insurance lawyers worldwide.

He leads Clyde & Co's global campaign on Resilience and Climate Change Risk, building a body of know-how and raising awareness of climate-related legal duties and potential liabilities. He is a member of the Law, Regulation and Resilience Policies Working Group of the Insurance Development Forum – a public/private partnership seeking to optimise and extend the use of insurance and the industry's risk management capabilities to protect those most vulnerable to disasters. He co-authored the firm's 2018 Reports on Parametric Insurance and Inclusive Insurance – exploring the role of innovative risk transfer in closing the global protection gap – and has authored and edited Clyde & Co's 2018/19 series of reports on the rising tide of Climate Change liability and duties of care. Paul Barrett, Chief Risk Officer, AIG UK

Paul is Chief Risk Officer for AIG UK. He is also the designated 'Senior Manager' for Climate Change Risk. Paul reports jointly to the Board of AIG UK and Fabrice Brossart, CRO, GI International. Paul's team is responsible for the Risk Governance, ORSA, Stress Testing, Risk Register, Risk Appetite & Limits and Operational Risk processes. Paul also works closely with the Group in helping to develop AIG's Climate Strategy. Previously Paul was Assistant Director, Solvency II at the Association of British Insurers (ABI). Prior to that Paul worked in Policy at the Financial Services Authority. Shane Latchman, VP and Managing Director, Verisk

As a vice president and the managing director of Verisk's Extreme Event Solutions team in London, Shane Latchman is involved in many of Verisk's extreme event models and Touchstone initiatives, such as the integration of third-party data and models, expanding Verisk's capabilities in marine and energy, climate change quantification, and the Next Generation Financial Module. He interacts frequently with rating agencies and regulators on topics such as stress tests, climate change, and the Solvency II directive on EU insurance regulation.

Shane joined Verisk after receiving his master's degree in 2008. Shane sits on and collaborates with various industry working groups, committees, and boards, including Bank of England, Open Data Standards, Insurance Development Forum, and Cass Business School. He writes and speaks frequently on topics related to catastrophe risk and climate change. Joss Matthewman, Senior Director of Climate Change Product Management & Strategy, RMS

Joss rejoined RMS in 2020 as Senior Director of Climate Change Product Management. Prior to this Joss was Head of Catastrophe Exposure Management at Hiscox, responsible for natural catastrophe, war, terror and political violence exposure management and reporting across the group.

Before joining Hiscox, Joss spent seven years in model development at RMS where he worked on the North Atlantic Hurricane and Asia Typhoon models, before being appointed Head of Storm Surge Modelling. During this period Joss joined the PRA working group on climate change which he continues to engage with today. Prior to entering the insurance industry Joss obtained a PhD in Applied Mathematics from UCL and worked as a postdoctoral researcher in climate science at the University of California, Irvine. His published areas of research include stratospheric sudden warmings, and the impact of sea-ice on global atmospheric teleconnections.

What climate books do you want for Christmas? Listen in to find out where to start on picking out those stocking fillers.

In this special episode, Jo reunites with William McDonnell to discuss their top picks of climate books across all genres, from climate science to politics and economics, covering fiction and non-fiction. Although its light-hearted, there's a deadly serious point: given the urgency of the climate crisis, we need to educate ourselves on the nature of the problem and the solutions at hand. Books offer a wonderful opportunity to learn much more about the challenges we face to build up a holistic view of risks that we value so much at GARP.

With so many excellent books out there, we hope this episode offers a guide, whether it's for expanding your own library of climate-related books or simply finding the perfect gift. And remember – as they say about dogs – a book is for life, not just for Christmas.

If you enjoyed this episode and would like to give us feedback, please let us know at [email protected]. You can find a full list of the books mentioned in today's podcast here: https://www.garp.org/hubfs/Website/GRI/PDF/garp-climate-risk-podcast-ep-41-christmas-book-list.pdf Speaker's Bio(s)

William McDonnell, COO, Integrity Council for the Voluntary Carbon Market

William is COO for the ICVCM, the new global governance body to set and enforce threshold quality standards for the voluntary carbon market. Prior to that he had a 25-year career in financial services. Most recently he was Group Chief Risk Officer and member of the Group Executive Committee for RSA Insurance Group plc for 7 years, responsible for Risk, Assurance and Compliance groupwide. Prior to RSA he held roles at HSBC Investment Bank, Aviva, the UK Financial Services Authority and Deloitte.

William is a leading voice on climate risk in the financial sector, having served as a member of the ClimateWise Council and of the UK's Climate Financial Risk Forum, and as chair of the Emerging Risks Initiative of leading global insurers, publishing a major climate study 'The Heat is on – Insurability and Resilience in a Changing Climate'.

Hear from William McDonnell, COO of the Integrity Council for the Voluntary Carbon Market, as we discuss the role of carbon credits in the transition to net-zero, and what changes are needed to ensure that the voluntary market can function correctly.

Sign up for GARP's 2022 Climate Risk Symposium here!

Part I: Nov 22, 1:00 - 2:30 pm GMT Part II: Dec 1, 1:00 - 2:30 pm GMT

As firms' climate ambitions steadily rise, many are looking towards carbon credits to help ease themselves into the transition to net-zero. According to the Ecosystem Marketplace, the global voluntary carbon market (VCM) has quadrupled in value since 2020.

However, not all carbon credits are created equal, and this is causing significant harm to the VCM's integrity. Because the quality assurance of carbon credits relies on a patchwork of standards set by independent organizations, many are of poor quality and can even be net-carbon positive. This immaturity in the market has even allowed for such irrational practices as deliberately cutting down forests, only to sell their regrowth as offsets.

In this episode of the GARP Climate Risk Podcast, we'll examine the voluntary carbon markets, exploring:

• The key differences between the mandatory and voluntary carbon markets;
• The challenge of scaling up the voluntary market whilst ensuring credit quality; and
• How the newly formed Integrity Council for the Voluntary Carbon Market plans to address it.

Links from today's discussion:

• Integrity Council for the Voluntary Carbon Market (ICVCM) homepage
• GARP's first Climate Risk webcast, featuring William – The Heat is On: A CRO's Perspective on Climate Change
• CRO Forum's Emerging Risk Initiative 2022 update
• Voluntary Carbon Market Integrity Initiative (VCMI) homepage
• Science Based Targets initiative (SBTi) homepage

William McDonnell, COO, Integrity Council for the Voluntary Carbon Market

William is COO for the ICVCM, the new global governance body to set and enforce threshold quality standards for the voluntary carbon market. Prior to that he had a 25-year career in financial services. Most recently he was Group Chief Risk Officer and member of the Group Executive Committee for RSA Insurance Group plc for 7 years, responsible for Risk, Assurance and Compliance groupwide. Prior to RSA he held roles at HSBC Investment Bank, Aviva, the UK Financial Services Authority and Deloitte.

William is a leading voice on climate risk in the financial sector, having served as a member of the ClimateWise Council and of the UK's Climate Financial Risk Forum, and as chair of the Emerging Risks Initiative of leading global insurers, publishing a major climate study 'The Heat is on – Insurability and Resilience in a Changing Climate'.

Hear from Bruce Usher, Professor of Practice at Columbia Business School, as we examine the investment opportunities and strategies that have emerged in response to the challenges of climate change.

We know that we need to rapidly reduce global greenhouse gas emissions in order to avoid catastrophic levels of climate change. This will require considerable private capital. Thankfully, there are significant investment opportunities today to support this transition, including renewable energy, electric vehicles, and battery storage, to name just a few.

Today's discussion is all about the investment opportunities arising from climate change and the strategies that investors are using to pursue them. We'll explore three key themes:

• The trends that are accelerating the flow of capital into transition investments;
• The pros and cons of different investment strategies, such as divestment and ESG investing;
• And what lies ahead for those who are investing in the era of climate change.

Links from today's discussion:

• Bruce's research and academic profile on Columbia Business School's website
• Bruce's new book, Investing in the Era of Climate Change
• Mark Carney's 2015 speech, "Breaking the Tragedy of the Horizon"
• Bill Gates' impact first initiative, Breakthrough Energy

Prof. Bruce Usher, Columbia Business School

Bruce is a Professor of Practice at the Columbia Business School, and Faculty Director for the Tamer Center for Social Enterprise, where he teaches on the intersection of finance, social and environmental issues. He is also a member of the Executive Committee of the Earth Institute, and chairs the University's Advisory Committee on Socially Responsible Investing.

Prior to joining Columbia University, Bruce was CEO of EcoSecurities Group plc, which developed greenhouse gas emission reduction projects in developing countries. Bruce's latest book and the topic of today's discussion, Investing in the Era of Climate Change, has just been published.

Hear from Prof. Emily Shuckburgh OBE, Director of Cambridge Zero, as we explore the potential for machine learning to help us navigate an increasingly difficult transition to net-zero.

Time is fast running out to limit end of century warming to 1.5oC. With significant European energy insecurity in the wake of the Ukrainian war, and increasing diplomatic tension between the world's largest emitters, it is increasingly uncertain whether global emissions will fall rapidly enough to secure a 1.5oC warming scenario. Without doubt, we're at a crossroads, and tough decisions need to be made about what level of climate risk we're willing to accept for future generations.

At the same time, we're also on the cusp of a revolution in our capacity to understand and tackle climate change through data and analytics. With the proliferation of satellite and remote sensing technologies, comes the potential for a complete paradigm shift in climate modelling through AI and machine learning. This opens up many exciting opportunities for both mitigating and adapting to climate change.

We will discuss:

• How machine learning can greatly improve the power of climate models;
• Whether the 1.5 degrees warming limit is still alive;
• And how to better communicate the urgency and complexity of climate-related issues.

Links from today's discussion:

• Emily's research and academic profile on the University of Cambridge website;
• The Ladybird Book on Climate Change, co-authored by Emily, King Charles III, and Tony Juniper (Ladybird Expert Series);
• Cambridge Zero Homepage (University of Cambridge's climate initiative).

Prof. Emily Shuckburgh OBE, Director of Cambridge Zero

Emily is a climate scientist and mathematician, holding several research and leadership positions at the University of Cambridge, where she has worked for almost 22 years. A polar expert, she previously led a UK national research programme on the Southern Ocean and its role in climate. In 2016 she was awarded an OBE for services to science and the public communication of science.

As Director of Cambridge Zero, the University's climate initiative, Emily leads on cutting edge research, education, and collaboration related to the transition to a climate-resilient, zero-carbon future. Emily is also a Professor of Environmental Data Science at the Department of Computer Science and Technology.

Hear from Prof. David Victor and Dr. Danny Cullenward, as we dive into the political forces that mould the climate policy landscape.

Designing climate policies that are effective in achieving climate change mitigation and adaptation is a major challenge.

Most economists argue for a carbon tax, which helps align incentives appropriately. But the costs can be all too visible to consumers, prompting protests and undermining their political acceptability. Indeed, when it comes to climate policy, you will often find that there is a trade-off between what is effective, and what is realistic.

Today's discussion is all about how politics shapes the plausibility and effectiveness of different climate policies. We discuss how the interests of consumers, firms, and political parties play a major role in determining not only what climate policies work best, but which ones are even possible.

In this episode, we explore:

• Why policies with highly visible costs tend to be avoided by politicians;
• How politically organized groups can resist the implementation of market-based policies;
• And the surprizing difference in mitigatory power between market-based and regulatory policies.

Links from today's discussion:

• David and Danny's 2020 book, Making Climate Policy Work
• The historical, political, and economic phenomenon of Potemkin villages
• Severin Borenstein et al.'s research paper on the relative mitigatory efficacies of market-based and non-market-based climate policies
• Martin Weitzman's research paper on price-based vs. quantity-based policies in the context of emissions uncertainty

Hear from Prof. Brian Fagan, Distinguished Emeritus Professor of Anthropology at the University of California, as we dig up lessons in climate risk from the ancient world of our ancestors.

Humanity has been subject to extreme weather and natural climate change for millions of years, and we can trace its impacts back to even our most ancient civilizations. A recent revolution in climate archaeology offers us a window into the climate risk management practices of the past.

Just as contemporary risk management relies on historical data, ancient humans relied on the knowledge of their ancestors to deal with the risks of climate change. Although much of this ancient risk management tradition has been lost to time, powerful archaeological techniques allow us to piece together stories of how humanity has dealt with the social, economic, and political consequences of climate change over the last 30,000 years.

That's why in today's episode, we'll explore the history of humanity's relationship with climate change, including insights on:

• What the past can teach us about risk management in the modern era;
• How climate change has shaped (and sometimes devastated) human societies in the past;
• And the scientific breakthroughs that have allowed archaeologists to bring this knowledge into the present.

Links from today's discussion:

• Brian's bibliography - https://www.biblio.com/brian-m-fagan/author/5110
• The 1997-98 El Niño event - https://en.wikipedia.org/wiki/1997%E2%80%9398_El_Ni%C3%B1o_event
• Brian on The Daily Show with John Stewart - https://www.cc.com/video/9jg7ty/the-daily-show-with-jon-stewart-brian-fagan
• Brian's article on Hubert Lamb's 'church steeple meteorology' - https://www.jstor.org/stable/3986152

Prof. Brian Fagan, Distinguished Emeritus Professor at the University of California

Brian is Distinguished Emeritus Professor of Anthropology at the University of California, Santa Barbara. Brian studied archaeology and anthropology at Cambridge University, before spending seven years in East and Central Africa, where he became a pioneering scholar of African history.

A prolific author, many of Brian's books explore the history of Earth's climate, examining the impacts the environment has had on human civilization (and vice versa) since the dawn of time. These works include "Floods, Famines, and Emperors", "The Little Ice Age", "The Great Warming", and the topic of today's discussion, "Climate Chaos: Lessons on Survival from Our Ancestors," which he co-authored with fellow archaeologist Dr. Nadia Durrani.

Hear from Sean Kidney, CEO of the Climate Bonds Initiative, as we explore the many ways finance is going green, from the phenomenal growth of the green bond market, to the ongoing revolution in investor sentiment, to the growing financial risks from climate change… and much, much more!

There are few challenges facing humanity as important as the transition towards a resilient, net-zero global economy. The mitigation and adaptation required will need great deal of both public and private investment. In this context, green bonds are an exciting opportunity for long-term investors, who are increasingly incorporating climate risk into their financial decision-making.

Today's episode starts off with the remarkable growth of the green bond market, before moving onto a wide range of topical issues, including:

• Broader market trends, including transition finance, and the growing convergence of climate science and transition policy;
• The relationship between food and energy security, the transition to net-zero, and Russia's war on Ukraine;
• In response to comments by Stuart Kirk, why investors really do need to worry about the financial risks from climate change.

Links from today's discussion:

• Climate Bonds Initiative (CBI) homepage: https://www.climatebonds.net/
• International Finance Corporation's (IFC) green bond page: https://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/about+ifc_new/investor+relations/ir-products/grnbond-overvw
• Grantham Research Institute on Climate Change and the Environment – The Stern Review: https://www.lse.ac.uk/granthaminstitute/publication/the-economics-of-climate-change-the-stern-review/
• Climate Bonds Initiative Steel Criteria: https://www.climatebonds.net/standard/steel
• Suspended HSBC employee Stuart Kirk's comments on climate risk: https://www.bbc.co.uk/news/business-61519111
• European Commission's Platform on Sustainable Finance: https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance/overview-sustainable-finance/platform-sustainable-finance_en

Sean Kidney, CEO, Climate Bonds Initiative

Sean is CEO of the Climate Bonds Initiative, an international NGO working to mobilize global capital for climate action. Their work includes a green bond definitions and certification scheme with $34 trillion of assets represented on its Board and some 200 organizations involved in its development and governance.

Sean is a member of the European Commission's Platform on Sustainable Finance and is a Professor in Practice at SOAS University of London, and for the past three years, he has been voted GlobalCapital magazine's "Most Influential Champion" of the sustainable finance market.