The Denver Forum on Climate Linked Economics is part of the 11th Symposium on Weather Water and Climate Enterprise at the 103rd Annual Meeting of the AMS in Denver, January 8-12, 2023. The Forum is an ongoing joint initiative across the American Meteorological Society (AMS) to create a link between the meteorology/climate communities and the broader community of economists, corporate executives, risk managers, financial planners, insurance professionals, and technology leaders.
Join us in Denver for the following in-person sessions!
Monday 1/9 at 130 pm - Colorado Convention Center Room 709
Climatology of Claims: The Influence of Meteorological vs. Non-Meteorological Factors on Wind and Hail Property Insurance Claims in the Southeast U.S. by Megan D. Walker from Blue Skies Meteorological Services and Charles Paxton from Channelside Weather.
Research from the Florida Office of Insurance Regulation (OIR) indicates that Florida insurers are not disproportionately denying claims, but rather that a disproportionate number of denied claims are being litigated. The OIR has identified a number of legislative factors that incentivize expensive claims-related litigation. However, the relative contributions of meteorological and non-meteorological factors to the initial filing of weather-related property insurance claims is an issue that remains uninvestigated not just in Florida, but across the U.S.
Monday 1/9 at 145 pm - Colorado Convention Center Room 709
Bridging the Data Gap between Climate Enterprises and the Scientific Community by Di Chen from Glasgow Financial Alliance for Net Zero.
Almost 60% of companies listed in the S&P 500® (market capitalization of $18.0 trillion) hold assets at high risk of physical climate change impacts. There’s an eagerness in the private sector to understand and utilize data to manage physical climate risk. However, much of the fit-for-purpose data is not readily available from the scientific community, as higher asset-level granularities are necessary in many use cases.
Monday 1/9 at 2 pm - Colorado Convention Center Room 709
Determining the ESG Material Topics and Weightings: a Contingency View by S. Ping Ho from National Taiwan University.
ESG efforts consist of many costly activities, including the identification of a firm’s sustainability goals, the change of corporate policy and organization, and the resources devoted to achieving the goals. Therefore, many firms that issue ESG reports do not actually commit to improvising their sustainability performance, and their ESG reporting is often criticized as “greenwashing.” Today’s investors are incentivized to demand the disclosing of “truly material” ESG information and adopt the sector’s domain knowledge to assess the firm’s sustainability performance and the quality of reporting. However, the increasing complexity of the sustainability issues makes it difficult for managers to effectively assess and evaluate sustainability strategies.
Keynote Speaker from the American Bar Association
Monday 1/9 at 215pm - Colorado Convention Center Room 709
Science and Technology Issues in Regulating Climate-Related Disclosures by Robert F. Brammer from the American Bar Association.
More companies are providing climate-related disclosures because of concerns among investors and regulators about the potential for systemic impacts from climate change. These activities describe organizational actions to reduce climate impacts and provide investors with information about climate-related risks and mitigation measures. Today, these disclosures are voluntary. However, The US Securities and Exchange Commission has proposed a regulation to make climate-related disclosures mandatory for public firms. Mandatory disclosures will cause many legal issues.
Executives and regulators must understand many limitations in today's science for assessing risks. This presentation will summarize the science and technology issues in developing and regulating these disclosures. This topic is crucial and controversial, and we will discuss various perspectives in this national debate.
Dr. Brammer is Chair of the Cleantech and Climate Change Committee of the American Bar Association
Tuesday 1/10 at 130pm - Colorado Convention Center Room 404
Potential Impacts of Climate Change on the Potential Financial and Operational Performance of US Wind Farms by Graham Haederle and Robert Brammer from the University of Maryland.
We focus on two critical climate-related issues for US wind farm valuations, future wind field dynamics and increasing lightning risk. The variables have significant impacts on the revenues and profits of wind farms. In wind farm operating ranges, generated power is proportional to the cube of the wind speed. Lightning may strike a wind turbine, overwhelm its protection system, and cause significant downtime with lost revenue potential and repair costs.
The results we will present from analyzing potential changes in wind field dynamics and lightning strike probabilities give insights into the possible effects of climate change on wind farm performance. In many locations, the future statistics are not materially different from history. However, in some areas, the statistics indicate potential impacts of up to 25% in terms of revenue and profit potential.
Featured Panel: Energy Infrastructure
Tuesday 1/10 at 145pm - Colorado Convention Center Room 404
Investing in energy infrastructure that is resilient to future extreme weather and informed by climate projections
Featuring Brian D’Agostino from San Diego Gas and Electric, Steven Vanderburg from PacifiCorp, Stanton Lanham from Duke-Energy, and Stephen Bennett from The Demex Group
As extreme weather events increase in frequency and intensity, resilient energy systems are foundational to our nation’s overall adaptability. An initial step to ensure we are building energy infrastructure that will be resilient to future extreme weather is to identify accepted guidance on future climate projections. These climate projections range from prolonged drought and changing rainfall patterns, rising sea levels, increases in temperature and the potential for heat waves, and an increase in wildfire potential in some territories. After future climate projections have been identified, vulnerability assessments must be conducted to better understand the specific climate risk on our energy transmission and energy distribution systems. Finally, as climate vulnerabilities and risk become better understood, energy providers must develop specific adaptation and resiliency planning consisting of : (1) Asset repair/replacement; (2) System operations; (3) Policy revisions. This panel of experts from public utilities will discuss how meteorology is leveraged to better understand and mitigate climate risks facing our county’s energy systems.
Brian D’Agostino is Vice President of Wildfire and Climate Science for San Diego Gas & Electric
Steven Vanderburg is Manager of Meteorology for PacifiCorp
Stanton Lanham is a Meteorologist for Duke Energy Corporation
Stephen Bennett is Chief Climate Officer for The Demex Group
Featured Panel: Risk Assessment
Tuesday 1/10 at 345pm - Colorado Convention Center Room 601
Toward Combined Physical and Transition Risk Assessment
Moderated by Joshua Hacker from Jupiter Intelligence and featuring Pat Harr from Jupiter Intelligence, Alicia Karspeck from SilverLining, Mike Lyons from Boston Consulting Group, and Ryan Lewis from the Leeds School of Business at the University of Colorado Boulder.
Financial institutions view transition risk as the first component of climate risk. Analysis to date has been based on macroeconomic responses to broad-brush climate change indicators at regional to national levels, but may be as general as global mean temperature change.
Consistent or combined physical and transition risk has not been addressed, despite a requirement that they be considered together to fully understand climate risk.
Acute physical risk is widely viewed as superior when addressed by bottom-up and granular approaches, which are currently inconsistent with the top-down approaches brought to bear on transition risk analysis.
In this panel, we explore paths toward combined transition and physical risk to gain a more complete climate risk analysis.
Joshua Hacker is Co-Founder and Chief Science Officer for Jupiter Intelligence
Pat Harr is Science Fellow for Jupiter Intelligence
Alicia Karspeck is Director of Earth Information Programs for SilverLining
Mike Lyons is Managing Director & Partner for BCG (Energy, Climate, Digital)
Ryan Lewis is Assistant Professor of Finance for the Center for Research on Consumer Financial Decision Making at the Leeds School of Business at the University of Colorado Boulder
Featured Panel: Supply Chain
Wednesday 1/11 at 830am - Colorado Convention Center Room 507
Optimizing Supply Chain for Extreme Weather and Climate Risk
Featuring Jon Davis from Everstream Analytics, Billy Schmitz from 5-Rivers Cattle, Jeff Massey from Amazon, and Stephen Bennett from The Demex Group.
Much of global economic production is organized around a complex system of interdependent supply chains. Supply chains facilitate the production of everything from computers and cars to lifesaving medicines and food, and support world trade in goods that are worth almost $20 trillion annually. Over time, these supply chains have been honed to deliver maximum efficiency and speed. But questions about supply-chain risks and resilience are now being raised in the context of acute weather events. As climate change shifts the localized frequency and severity of extreme weather, this alters the risk of global supply-chain disruptions. Special emphasis will be placed on communication of weather/climate risk to the “end user” and the flow of information to the decision-makers. Today’s panel will discuss climate risk from the perspective of supply chain planning and operations.
Jon Davis is Chief Meteorologist for Everstream Analytics
Billy Schmitz is Market Analyst for 5-Rivers Cattle
Jeff Massey is Weather Team Lead at Amazon Prime Air
Stephen Bennett is Chief Climate Officer for The Demex Group
Wednesday 1/11 at 1045am - Colorado Convention Center Room 601
How Will the Impacts of Climate Change Affect the Investment Environment for Small Businesses in the Chesapeake Bay Region? by Siobhan Light and Robert Brammer from the University of Maryland
We present an analysis of the potential impacts of climate change phenomena on the investment attractiveness of various types of small businesses in the region. These climate change phenomena include increasing flood, wildfire, and heat risk and the associated effects on marine, agriculture, and tourism businesses. We use data from multiple sources to assess the possible impacts of climate change on the finances of hypothetical new firms in this region.
These models include income statements, cash flow statements, and balance sheets of notional firms to develop probabilistic financial models using Monte Carlo simulations. These techniques enable us to evaluate tradeoffs between risk mitigation expenditures and return on investment over 10-20 years. Our presentation discusses modeling and analytical techniques and shows simulation results of the impacts of climate change on the potential profitability of these hypothetical firms.
Featured Panel: Risk Management
Wednesday 1/11 at 11am - Colorado Convention Center Room 601
Transferring Climate Risk through Financial Markets
Featuring Matt Coleman from The Demex Group, Kieran Bhatia from Guy Carpenter, Brad Hoggatt from MSI Guaranteed Weather, and Nick Cavanaugh from Sensible
More and more companies are examining their exposure to climate-related risks. Credit rating agencies, government regulators, investors, and the Task Force on Climate-related Financial Disclosures (TCFD) are all directing companies to understand and manage their Climate Linked Economics. Business leaders, investors, and regulators are demanding increased transparency on climate impacts. Climate resilience requires planning for, operating within, and recovering from weather extremes. Customized Parametric Insurance, Property and Casualty Insurance, Business Lines Insurance, and/or Financial Derivatives are all commonly used methods for protecting against extreme weather-related losses due to unexpected increases in costs or lost revenue. The panel will discuss the broad framework of climate risk management and climate risk transfer from the perspective of the capital markets and insurance communities.
Matt Coleman is Chief Risk Officer for The Demex Group
Dr. Kieran Bhatia is Vice President of Climate Change Perils Advisory for Guy Carpenter
Brad Hoggatt is Chief Portfolio Manager for MSI GuaranteedWeather
Nick Cavanaugh is Founder of Sensible