City Climate Risk

1

Investor Engagement and Finance Innovation for

Urban Resilience

2

What climate-related damage is foreseen?

What is the financial extent of the risk?

Are investors engaged to improve safety, livelihoods?

What City finance innovation is anticipated?

Trend in Natural Disasters: 1980 - 2015

Munich Re NatCat Service 3

Selected Significant Extreme Weather Events 2014-2015

4 NOAA

2016: Billion Dollar Weather and Climate Disasters

5 NOAA

Zwillow: In US 1.9M homes at risk

6 Zwillow

Annual Expected Loss by Zip Code

7

Alex Kaplan | Global Partnerships | October 2, 2014

• Current drivers of loss : east and south shores of Staten Is land, southern Brooklyn and

Queens, Brooklyn and Queens waterfront and southern Manhattan.

• Under future scenarios: Same geographic regions , plus northern Queens and the

Bronx

• Under 2 0 5 0 s scenario: 4 0 0 % increase in ZIP codes which have an AEL of USD 3 0

million

ResultsAnnual Expected Loss by ZIP code

Source: A Stronger, More Resilient New York

10

SwissRe:A More

Resilient NYC

Sandy Supplemental vs. ‘12 Agency Outlays

8 Office of Management &

Budget

Climate Change Slows Middle Class Emergence

9

• Climate change threatens

to erode progress made on

poverty reduction

• Global incomes could

decline 23 percent by 2100

relative to a world without

climate change

Climate Change is Not the Only Driver of Risk

10

Alex Kaplan | Global Partnerships | October 2, 2014

Climate change is not the main driver for ris ing natural catas trophe losses in recent decades

Growth of wealth

Concentration of values in

exposed areas (e .g. coasts)

Increasing vulnerability

Climate change as a potential

new driver in future (s torms,

floods, droughts)

Ocean Drive, FL, 2 013Ocean Drive , FL, 19 2 6 Drivers

3

Ocean Drive, FL 1926 Ocean Drive FL

2013

American Infrastructure Grade: D+

11

12

What climate-related damage is foreseen?

What is the financial extent of the risk?

Are investors engaged to improve safety, livelihoods?

What City finance innovation is anticipated?

AUM $75T (‘15) | Real Estate Asset Risk $35T (‘70)

13 UNFCCC 2016 Biennial

review of climate finance

Climate Risk & Business Cycle Timelines Misaligned

15

WEF: Global Risk Report ‘17 – Climate Risk Impact

World Economic Forum Global Risk

Perception Survey

Climate Adaptation: Risk and Opportunity

Global Adaptation and Resilience

Fund Finance for Resilience 17

18

What climate-related damage is foreseen?

What is the financial extent of the risk?

Are investors engaged to improve safety, livelihoods?

What City finance innovation is anticipated?

Business Risk from Climate Change is Beyond the Fenceline

19

© 2017 Climate Resilience Consulting– All rights reserved

: Weathering the Storm, C2ES

Corporate Action: ERM Innovation CSR Supply Chain PPP

20

Example Florida

0.03 0.04

5 6 7

Levee & Floodwall

Sandbags

0.05

0.08

0.08

0.13

0.35

15

0.80 0.93 0.99 1.09 1.30

0.98 1.01

1.47

1.54

1.54

1.75 2.56 2.96

1.54 2.15

3.70

6.93

7.54

10.26

0 1 18 19

Elevation, retrofit

Replacement under- grounding, trans.

Targeted under- grounding, trans.

17 16 14 12 13 Masonry, new

Opening protection, retrofit

11 10 9 8 4 2 3

11

10

9

8

7

6

5

4

3

2

1

0

0.69

0 0 0.02 0.03

Beach Nourishment (50 ft)

Beach Nourishment (100 ft)

Roof cover, new

Roof truss, new Roof deck

attachment, new

Opening protection, new Roof shape

new

Temp. floodwalls

Vegetation Mgmt

Elevation – new homes

Roof cover, retrofit

Targeting hardening,

dist.

Roof truss, retrofit

Substation Backup generators

Local levees

Targeted hardening, transmission

Deductibles - residential

Deductibles - commercial

Engineering based FRT penetration

distribution Road elevation

Targeted undergrounding,

retrofit Replacement

undergrounding, dist.

Elevation, prioritized

Top layer risk transfer

Measures below

this line have net

economic benefits

Cost/benefit

Averted loss

$ Billions

Calculated in 2008 dollars for the average climate scenario

~40% of total

expected loss can

be averted cost-

effectively

$30 billion

Annual

expected

Adaptation Options (FL example)

10

loss

SwissRe

Potential Sovereign Rating Downgrade due to Climate Risk

12

4.8

4.3

4.5

3.9

2.5

2.8

2.2

1.5

1.8

1.4

1.2

0.5

0.5

0.4

0.4

0.3

0.3

0.2

0.2

0.5

0.1

0.5

0.9

0.3

0.2

0.8

0.4

0.2

0.2

0.2

0.3

0.2

0 1 1 2 2 3 3 4 4 5 5

Barbados

Bahamas

Fiji

Jamaica

Dom Rep

Aruba

Bangladesh

Bermuda

Vietnam

Guatemala

Honduras

Taiwan

Trinidad and Tobago

Philippines

Colombia

Mexico

Thailand

Indonesia

Potential Downgrade, status-quo climate

Added potential downgrades due to climate change

Standard & Poors

S&P’s Green Bond Evaluation

8

* eKPI – Environmental Key Performance

Indicator

Transparency

• Use of proceeds reporting

• Reporting comprehensiveness

Governance

• Management of proceeds

• Impact assessment structure

(Mitigation

• Buildings, Industrial Efficiencies, Energy Infrastructure, Transport and Water

Adaptation

• Increased resilience

eKPIs • Carbon

• Water

• Waste

• Land Use

• Air and Water Pollution

eKPIs

• Reduction in financial and non-financial damage

Comprehensive Environmental Impact (Final score – weighted aggregate)

Net Benefit

• Local Baseline

• Best in Class

• Hierarchy Overlay

Standard & Poors

European Law: French Art. 173-VI; UK Adaptation Reporting Power

25 Standard & Poors

Climate Risk Disclosure

26 Ceres

Investor Awareness of Climate Risk

27

Green Bonds $42B ‘15 ($11B ‘13 )

28

Catastrophe Bond Transactions

29 Artemis

Oasis Platform for Catastrophe and Climate Change Risk Assessment

Innovative Adaptation Finance Mechanisms

Global Adaptation and Resilience Investment Work Group

31

THE INVESTMENT OPPORTUNITY $500 million - $1 billion growth equity vehicle that invests in 10 - 20 companies

Water Efficiency Devices

Climate Risk Maps

Climate Adaptation Tools

Drought Resistant Agriculture

Climate Risk Consulting/Engineering

Weather/Climate Analytics

Flood Risk Models

Climate Resilient Healthcare

Global Adaptation and Resilience Fund

32

What climate-related damage is foreseen?

What is the financial extent of the risk?

Are investors engaged to improve safety, livelihoods?

What City finance innovation is anticipated?

Every $1 for Risk Mitigation Saves Society $4

33 Multihazard Mitigation Council

Bang for the Buck– Infrastructure Spend $1.44

34 Moody’s

Cities know the Risks are Beyond Climate Vulnerability

35 ND-Global Adaptation Initiative

National Disaster Resilience Competition

36 City of Chicago

C40 Cities Finance Facility

37 Clinton Climate Initiative C40

Rockefeller Foundation/100 Resilient Cities Technical Advisory Facility

38 100 Resilient Cities

Urban Resilience to Extremes SRN

39 URExSRN Tischa Munoz

Joyce Coffee, www.climateresilienceconsulting.com

40

41

Parking lot

41

Joyce Coffee Joyce@climateresilienceconsulting.com