Incorporating Climate Risk in Valuations
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In this episode of Sustainability Leaders, Melissa Fifield sat down with Kathryn Bakos, Managing Director, Finance and Resilience at the Intact Center on Climate Adaptation, to discuss how climate change can impact financial markets, the regulatory landscape, and how investors might be able to integrate climate risks and opportunities into their capital allocation strategies.
Sustainability Leaders podcast is live on all major channels, including Apple and Spotify.
Kathryn Bakos:
We have resources available for the financial community to be more secure in their understanding and deployment of change on the ground. But those resources need to be used more readily so we can get risk out of the system. And all of these actions will help businesses identify and manage climate risk while potentially serving as a point of competitive differentiation.
Michael Torrance:
Welcome to Sustainability Leaders. I'm Michael Torrance, Chief Sustainability Officer at BMO. On this show, we will talk with leading sustainability practitioners from the corporate, investor, academic, and NGO communities to explore how this rapidly evolving field of sustainability is impacting global investment, business practices, and our world.
Melissa Fifield:
The views expressed here are those of the participants and not those of Bank of Montreal, its affiliates or subsidiaries.
Hello, my name is Melissa Fifield, head of the BMO Climate Institute. In today's episode of Sustainability Leaders, we'll be talking about how climate change impacts financial markets, the regulatory landscape, and how investors can integrate climate risks and opportunities into their capital allocation strategies. To help me unpack this topic, I'm pleased to be joined by Kathryn Bakos, Managing Director, Finance and Resilience at the Intact Center on Climate Adaptation. Thanks for joining me today, Kathryn.
Kathryn Bakos:
Thanks so much for having me.
Melissa Fifield:
So maybe to get started, can you share a bit about your organization and your role specifically?
Kathryn Bakos:
Yes, of course. Well, the Intact Center on Climate Adaptation, the Intact Center, is an applied research center out of the University of Waterloo in Ontario, Canada that helps homeowners, communities, businesses, and governments reduce risks associated with climate change and extreme weather events. That's particularly in relation to flooding, wildfire, and extreme heat. And under my personal domain, I focus on engaging the financial community from investors, regulators, and supervisors, credit rate agencies, boards of directors in incorporating the physical risks of climate change into investment and business decision making.
Melissa Fifield:
So maybe starting big picture, can you discuss how climate change has the potential to impact financial markets?
Kathryn Bakos:
Yes. Well, climate change manifests as extreme weather, floods, wildfires, extreme heat, droughts, which cause widespread adverse impacts to individuals, communities, governments, and businesses. Transitioning to a low carbon global society is imperative to avoid the worst impacts of climate change in the future. But we know that due to the cumulative emissions of greenhouse gas emissions to date, a certain degree of climate change is already baked into the system and therefore it is in fact irreversible. So in response to the irreversibility of climate change, global warming, exacerbated extreme weather events, and the global response to these threats, the safety and soundness of the global financial system is expected to continue to be impacted because physical climate change and extreme weather adversely affect economic and financial outcomes across industry sectors through loss and damage to private and public infrastructure, negative supply chain shocks, disruptions to the continuity of business operations, reduced labor productivity, and rising mortality rates.
This prompts the assessment of asset values, changing the cost or availability of credit and insurance, which may affect the timing or reliability of cash flows. Impact could also be observed through micro and macroeconomic trends, jobs creation and loss, household income and debt, inflation, which could create and ultimately amplify financial risk.
Melissa Fifield:
The impacts are widespread, maybe from a different dimension. Can you talk a bit about how those impacts of climate change are shaping the evolution of reporting and disclosure requirements worldwide?
Kathryn Bakos:
Well, disclosure requirements have been driven by the needs of the marketplace. So to support efficient capital allocation towards companies responding to the threats of climate change, financial markets have to price risk an opportunity appropriately. And to do so, they must have accurate information to inform market participants. So within the growing field of sustainability and climate related disclosures, various frameworks and standard setting bodies exist to establish that foundational layer of data to inform decision making. So we could turn to the task force on climate related financial disclosures. So this is very high level framework that offers information needed to assess and price climate related risks and opportunities under their pillars of governance, strategy, risk management, and metrics and targets.
Now, if we wanted to get into more detail into the weeds a little bit, you have standards such as the Sustainability Accounting Standards Board, SASB, that's used to identify specific environmental, social and governance, ESG issues, most relevant to financial performance and enterprise value across 77 industry sectors. Now to consolidate this information, the International Sustainability Standards Board, the ISSB, many acronyms, many names, was created to develop a comprehensive global baseline, which has taken the TCFD and SASB and incorporated this into one voluntary framework. Voluntary frameworks have experienced significant gaps in reporting though, as not all issuers disclose risks that might be material to operations. So just as an example, many companies fail to consider the strategic and financial impacts physical climate risks have on their business, assessing only the impact their business has on the environment and climate, or vice versa. And so these voluntary disclosures have driven the marketplace towards mandatory disclosures.
So we've seen this develop here in Canada through our regulator, the Office of the Superintendent of Financial Institutions, their B-15 Climate Risk Management Guideline and the Canadian Securities Administrators have required for over 10 years that publicly traded companies disclose climate-related risks. Now in the United States, the Securities and Exchange Commission, the SEC, is proposing amendments to the Securities Act which builds off of the State of California, which is the first state in the US to pass legislation to mandate reporting for publicly traded companies. And in my opinion, the Europeans are by far leaders in this space, specifically the European Commission and their Sustainable Finance Disclosure Regulation.
Melissa Fifield:
Kathryn, how does your work complement the frameworks in the existing disclosure landscape to provide investors with an increased understanding of those climate risks and opportunities?
Kathryn Bakos:
Well, as I mentioned, global framework and standard-setting bodies such as TCFD, SASB, and ISSB have laid a strong foundation for disclosure requirements. They've done a great job. To make requirements more robust though, we, the marketplace, need to identify where there are gaps that need filling. From a physical risk perspective, current frameworks lack specificity in identifying what key physical climate risks will impact businesses operating within given industry sectors and what measures need to be put into place to reduce those risks. So the marketplace should want risk out of the system. So it's not just about risk identification, but it's about putting measures in place for risk reduction. To fill this gap, our team at the Intact Center, we've developed a globally scalable tool that complements global framework and standard-setting bodies. So we're not trying to replace what is existing and globally agreed upon already is best practice.
The Intact Center tool is intentionally designed to plug into existing frameworks to fill in the gaps by identifying the top key physical climate risks that could impact business operations within a given industry sector while more importantly, in my opinion, identifying what measures need to be put into place to reduce those risks. So we've dubbed this tool the Climate Risk Matrices and we've developed them for industry sectors, including utilities, financials, and commercial real estate. But what are the benefits of the Climate Risk Matrices, the CRMs, in short? Well, they act as a template to assist any business operating within a specific industry sector in identifying primary physical climate risks affecting operations and then determining where resources should be allocated to mitigate those risks. So there may be numerous risks a company needs to address, and yet most companies likely lack the resources, both time and money, to tackle them all.
So in context of physical climate change, businesses can now pinpoint their top one to two physical climate risks that could impact operations, and then identify what measures they need to mitigate them. Now, the CRMs, they also act as a benchmark for investors to easily understand the risk facing a given company operating within a given industry sector. So they can compare those results to other companies of which they might invest. So CRMs even offer questions that investors could ask an issuer to determine if these companies understand their risk and if they've put measures in place to reduce that risk. So basically the questions sum up to: Have you as an issuing company identified your risks and are you mitigating against those risks?
If either of those answers are no, no, we've not identified these risks and no, we've not put measures in place to reduce these risks, that could be a red flag to an investor and whether they'd want to invest assets in a company or other financial market participants, capital providers or insurers may not want to loan money or provide insurance, or they may loan money at a higher rate or provide insurance at a higher premium. So by utilizing the climate risk matrix tool, financial markets can actually ask the questions and receive answers that will allow for this pricing of climate risk and opportunity in the system.
Melissa Fifield:
So how can those insights derive from the work that you're doing, support and strengthen the global regulatory disclosure landscape?
Kathryn Bakos:
Well, the Climate Risk Matrices help inform an organization's governance and strategy around climate related risks and opportunities while providing the metrics and targets needed to identify, assess, and manage risk, which are the pillars of TCFD and more recently, ISSB. So governance, strategy, risk management, and metrics and targets. So to offer a little bit more of a specific example, we can actually turn to the regulator here in Canada, the Office of the Superintendent of Financial Institutions, OSFI. So OSFI's B-15 Climate Risk Management Sound Business Practice Guideline emphasizes that building resilience against climate related risks requires vulnerabilities to be addressed throughout business models, operations, and balance sheets. So businesses should identify, collect and use reliable, timely, and accurate data pertaining to physical risk concentrations.
So geophysical locations of exposure, sectors, and products relevant to its business activities to inform risk management and decision-making while Climate Risk Matrices provide a means to mobilize on OSFI's B-15 Climate Risk Management Guideline, because they identify and prioritize extreme weather impacts specific to the operations of an issuer and the actions the company should take to limit those risks. Now, when tools are developed by external third parties, OSFI advises that businesses should understand the data, methodology, assumptions, and limitations of the information being provided. Well, the value CRMs provide is that they're non-technical in nature. So interpretation of physical climate risk does not require in-depth expertise.
Anyone from retail investors to portfolio managers with or without expertise in a given industry sector could actually utilize this information. And finally, OSFI advises that climate related risks should be incorporated into internal monitoring and reporting to assess effectiveness of climate risk management. Well, CRMs offer that practical cost-effective and user-friendly method to incorporate physical climate risk into investment and business decision-making that complements those frameworks and standards that are already in the marketplace.
Melissa Fifield:
What additional tools or strategies might financial markets consider to mature their response to climate change?
Kathryn Bakos:
Well, that's a great question because we know that the physical impacts of climate change have and will continue to have direct impact across industry sectors, which could impact the financial condition of businesses, issuers, investors, and capital providers, which then could influence disclosure requirements by regulators. And so across industry sectors we need to ensure there's appropriate expertise to understand the evolving means by which climate change and extreme weather will be realized over the geographies of which businesses are operating and investors are investing. Can businesses demonstrate that they have done due diligence in understanding physical climate risks by utilizing the CRM tool I just described in addition to running scenario analysis to understand how and where physical climate risks will manifest? Hiring climate change experts. Can businesses put together climate change committees working with organizations like the Intact Center to advance understanding further? Do businesses and investors have the appropriate understanding of the guidelines and standards already developed to mitigate extreme weather risk?
So just as an example, guidelines and standards are already available to reduce the risks of flooding and wildfire. So are businesses deploying the operationalization of this information to reduce risk at the operational site level? And then are they working with suppliers and distributors up and downstream to ensure they're reducing risk? And there are even things that are not often considered that could have material impact on a business. So let's think about market access and lost time from work during extreme weather events. So just as an example, a flooded basement across Canada causes individuals to miss, on average, seven days lost time from work, and that's research that the Intact Center has completed. So that's a flooded basement. That is not your home burning down and that is not your home being washed away. That's purely just a flooded basement. People are missing seven days lost time from work.
So as a form of good governance, how could businesses provide information to customers, clients, and employees on ways to reduce extreme weather risk at the level of the home and community? Are businesses working with the municipalities in which they're operating within to ensure the municipalities themselves are aware of and are taking steps to mitigate these risks? So it's important to note that we have resources available for the financial community to be more secure in their understanding and deployment of change on the ground, but those resources need to be used more readily so we can get risk out of the system. And all of these actions will help businesses identify and manage climate risk while potentially serving as a point competitive differentiation.
Melissa Fifield:
Those are some great recommendations and great to know that those tools are available based on the work your team has done. What would you like our audience to take away from our conversation, Kathryn?
Kathryn Bakos:
Well, I think it's really important that we understand that the global financial system is at risk of being impacted by the physical risks of climate change. So so much of the conversation, which importantly so is focused on transitioning to a low-carbon global society, which is incredibly imperative and needed, but we have to be focusing on those physical risks of climate change as well. And to support that efficient capital allocation towards companies responding to these threats, financial markets have taken steps to price risk appropriately through climate related disclosures. But for those climate related regulations to continue to evolve, the marketplace needs to identify what information is lacking to continue to add to the robustness of disclosure requirements. So organizations like the Intact Center, we have done the work, identified some gaps, and offered some solutions.
We've developed a tool that can identify the top key physical climate risks that will impact the business operations of a company operating within a given industry sector, and more importantly what actions need to be taken to get risk out of the system. Is this all the information an investor needs to know? No, of course not, but it's a great place to start. The Intact Center has a wealth of freely available resources from what companies and investors should be doing in regards to physical risks of climate change to what individuals and communities can be doing. We know what to do to get risk out of the system. We just have to do it now.
Melissa Fifield:
Well, thank you very much, Kathryn, for joining me to discuss the evolving disclosure landscape and how capital markets can factor climate risk and opportunity into investment decisions.
Kathryn Bakos:
Thank you so much for having me.
Melissa Fifield:
Stay tuned for more episodes of Sustainability Leaders. We'll host leading experts and continue to explore the impacts of climate change on our social, financial, and natural systems.
Michael Torrance:
Thanks for listening to Sustainability Leaders. This podcast is presented by BMO. You can find our show on Apple Podcasts, Spotify, or your favorite podcast player. Press the follow button if you want to get notified when new episodes are published. We value your input, so please leave a rating, review, and any feedback that you might have or visit us at bmo.com/sustainabilityleaders. Our show and resources are produced with support from BMO's marketing team and Puddle Creative. Until next time, thanks for listening and have a great week.
Speaker 4:
For BMO disclosures, please visit bmocm.com/podcast/disclaimer.
Incorporating Climate Risk in Valuations
Chef, Institut pour le climat de BMO
Melissa dirige l’Institut pour le climat de BMO, un centre d’expertise qui accélère les solutions climatiques en associant la science, les…
Melissa dirige l’Institut pour le climat de BMO, un centre d’expertise qui accélère les solutions climatiques en associant la science, les…
VOIR LE PROFIL COMPLET- Temps de lecture
- Écouter Arrêter
- Agrandir | Réduire le texte
Disponible en anglais seulement
In this episode of Sustainability Leaders, Melissa Fifield sat down with Kathryn Bakos, Managing Director, Finance and Resilience at the Intact Center on Climate Adaptation, to discuss how climate change can impact financial markets, the regulatory landscape, and how investors might be able to integrate climate risks and opportunities into their capital allocation strategies.
Sustainability Leaders podcast is live on all major channels, including Apple and Spotify.
Kathryn Bakos:
We have resources available for the financial community to be more secure in their understanding and deployment of change on the ground. But those resources need to be used more readily so we can get risk out of the system. And all of these actions will help businesses identify and manage climate risk while potentially serving as a point of competitive differentiation.
Michael Torrance:
Welcome to Sustainability Leaders. I'm Michael Torrance, Chief Sustainability Officer at BMO. On this show, we will talk with leading sustainability practitioners from the corporate, investor, academic, and NGO communities to explore how this rapidly evolving field of sustainability is impacting global investment, business practices, and our world.
Melissa Fifield:
The views expressed here are those of the participants and not those of Bank of Montreal, its affiliates or subsidiaries.
Hello, my name is Melissa Fifield, head of the BMO Climate Institute. In today's episode of Sustainability Leaders, we'll be talking about how climate change impacts financial markets, the regulatory landscape, and how investors can integrate climate risks and opportunities into their capital allocation strategies. To help me unpack this topic, I'm pleased to be joined by Kathryn Bakos, Managing Director, Finance and Resilience at the Intact Center on Climate Adaptation. Thanks for joining me today, Kathryn.
Kathryn Bakos:
Thanks so much for having me.
Melissa Fifield:
So maybe to get started, can you share a bit about your organization and your role specifically?
Kathryn Bakos:
Yes, of course. Well, the Intact Center on Climate Adaptation, the Intact Center, is an applied research center out of the University of Waterloo in Ontario, Canada that helps homeowners, communities, businesses, and governments reduce risks associated with climate change and extreme weather events. That's particularly in relation to flooding, wildfire, and extreme heat. And under my personal domain, I focus on engaging the financial community from investors, regulators, and supervisors, credit rate agencies, boards of directors in incorporating the physical risks of climate change into investment and business decision making.
Melissa Fifield:
So maybe starting big picture, can you discuss how climate change has the potential to impact financial markets?
Kathryn Bakos:
Yes. Well, climate change manifests as extreme weather, floods, wildfires, extreme heat, droughts, which cause widespread adverse impacts to individuals, communities, governments, and businesses. Transitioning to a low carbon global society is imperative to avoid the worst impacts of climate change in the future. But we know that due to the cumulative emissions of greenhouse gas emissions to date, a certain degree of climate change is already baked into the system and therefore it is in fact irreversible. So in response to the irreversibility of climate change, global warming, exacerbated extreme weather events, and the global response to these threats, the safety and soundness of the global financial system is expected to continue to be impacted because physical climate change and extreme weather adversely affect economic and financial outcomes across industry sectors through loss and damage to private and public infrastructure, negative supply chain shocks, disruptions to the continuity of business operations, reduced labor productivity, and rising mortality rates.
This prompts the assessment of asset values, changing the cost or availability of credit and insurance, which may affect the timing or reliability of cash flows. Impact could also be observed through micro and macroeconomic trends, jobs creation and loss, household income and debt, inflation, which could create and ultimately amplify financial risk.
Melissa Fifield:
The impacts are widespread, maybe from a different dimension. Can you talk a bit about how those impacts of climate change are shaping the evolution of reporting and disclosure requirements worldwide?
Kathryn Bakos:
Well, disclosure requirements have been driven by the needs of the marketplace. So to support efficient capital allocation towards companies responding to the threats of climate change, financial markets have to price risk an opportunity appropriately. And to do so, they must have accurate information to inform market participants. So within the growing field of sustainability and climate related disclosures, various frameworks and standard setting bodies exist to establish that foundational layer of data to inform decision making. So we could turn to the task force on climate related financial disclosures. So this is very high level framework that offers information needed to assess and price climate related risks and opportunities under their pillars of governance, strategy, risk management, and metrics and targets.
Now, if we wanted to get into more detail into the weeds a little bit, you have standards such as the Sustainability Accounting Standards Board, SASB, that's used to identify specific environmental, social and governance, ESG issues, most relevant to financial performance and enterprise value across 77 industry sectors. Now to consolidate this information, the International Sustainability Standards Board, the ISSB, many acronyms, many names, was created to develop a comprehensive global baseline, which has taken the TCFD and SASB and incorporated this into one voluntary framework. Voluntary frameworks have experienced significant gaps in reporting though, as not all issuers disclose risks that might be material to operations. So just as an example, many companies fail to consider the strategic and financial impacts physical climate risks have on their business, assessing only the impact their business has on the environment and climate, or vice versa. And so these voluntary disclosures have driven the marketplace towards mandatory disclosures.
So we've seen this develop here in Canada through our regulator, the Office of the Superintendent of Financial Institutions, their B-15 Climate Risk Management Guideline and the Canadian Securities Administrators have required for over 10 years that publicly traded companies disclose climate-related risks. Now in the United States, the Securities and Exchange Commission, the SEC, is proposing amendments to the Securities Act which builds off of the State of California, which is the first state in the US to pass legislation to mandate reporting for publicly traded companies. And in my opinion, the Europeans are by far leaders in this space, specifically the European Commission and their Sustainable Finance Disclosure Regulation.
Melissa Fifield:
Kathryn, how does your work complement the frameworks in the existing disclosure landscape to provide investors with an increased understanding of those climate risks and opportunities?
Kathryn Bakos:
Well, as I mentioned, global framework and standard-setting bodies such as TCFD, SASB, and ISSB have laid a strong foundation for disclosure requirements. They've done a great job. To make requirements more robust though, we, the marketplace, need to identify where there are gaps that need filling. From a physical risk perspective, current frameworks lack specificity in identifying what key physical climate risks will impact businesses operating within given industry sectors and what measures need to be put into place to reduce those risks. So the marketplace should want risk out of the system. So it's not just about risk identification, but it's about putting measures in place for risk reduction. To fill this gap, our team at the Intact Center, we've developed a globally scalable tool that complements global framework and standard-setting bodies. So we're not trying to replace what is existing and globally agreed upon already is best practice.
The Intact Center tool is intentionally designed to plug into existing frameworks to fill in the gaps by identifying the top key physical climate risks that could impact business operations within a given industry sector while more importantly, in my opinion, identifying what measures need to be put into place to reduce those risks. So we've dubbed this tool the Climate Risk Matrices and we've developed them for industry sectors, including utilities, financials, and commercial real estate. But what are the benefits of the Climate Risk Matrices, the CRMs, in short? Well, they act as a template to assist any business operating within a specific industry sector in identifying primary physical climate risks affecting operations and then determining where resources should be allocated to mitigate those risks. So there may be numerous risks a company needs to address, and yet most companies likely lack the resources, both time and money, to tackle them all.
So in context of physical climate change, businesses can now pinpoint their top one to two physical climate risks that could impact operations, and then identify what measures they need to mitigate them. Now, the CRMs, they also act as a benchmark for investors to easily understand the risk facing a given company operating within a given industry sector. So they can compare those results to other companies of which they might invest. So CRMs even offer questions that investors could ask an issuer to determine if these companies understand their risk and if they've put measures in place to reduce that risk. So basically the questions sum up to: Have you as an issuing company identified your risks and are you mitigating against those risks?
If either of those answers are no, no, we've not identified these risks and no, we've not put measures in place to reduce these risks, that could be a red flag to an investor and whether they'd want to invest assets in a company or other financial market participants, capital providers or insurers may not want to loan money or provide insurance, or they may loan money at a higher rate or provide insurance at a higher premium. So by utilizing the climate risk matrix tool, financial markets can actually ask the questions and receive answers that will allow for this pricing of climate risk and opportunity in the system.
Melissa Fifield:
So how can those insights derive from the work that you're doing, support and strengthen the global regulatory disclosure landscape?
Kathryn Bakos:
Well, the Climate Risk Matrices help inform an organization's governance and strategy around climate related risks and opportunities while providing the metrics and targets needed to identify, assess, and manage risk, which are the pillars of TCFD and more recently, ISSB. So governance, strategy, risk management, and metrics and targets. So to offer a little bit more of a specific example, we can actually turn to the regulator here in Canada, the Office of the Superintendent of Financial Institutions, OSFI. So OSFI's B-15 Climate Risk Management Sound Business Practice Guideline emphasizes that building resilience against climate related risks requires vulnerabilities to be addressed throughout business models, operations, and balance sheets. So businesses should identify, collect and use reliable, timely, and accurate data pertaining to physical risk concentrations.
So geophysical locations of exposure, sectors, and products relevant to its business activities to inform risk management and decision-making while Climate Risk Matrices provide a means to mobilize on OSFI's B-15 Climate Risk Management Guideline, because they identify and prioritize extreme weather impacts specific to the operations of an issuer and the actions the company should take to limit those risks. Now, when tools are developed by external third parties, OSFI advises that businesses should understand the data, methodology, assumptions, and limitations of the information being provided. Well, the value CRMs provide is that they're non-technical in nature. So interpretation of physical climate risk does not require in-depth expertise.
Anyone from retail investors to portfolio managers with or without expertise in a given industry sector could actually utilize this information. And finally, OSFI advises that climate related risks should be incorporated into internal monitoring and reporting to assess effectiveness of climate risk management. Well, CRMs offer that practical cost-effective and user-friendly method to incorporate physical climate risk into investment and business decision-making that complements those frameworks and standards that are already in the marketplace.
Melissa Fifield:
What additional tools or strategies might financial markets consider to mature their response to climate change?
Kathryn Bakos:
Well, that's a great question because we know that the physical impacts of climate change have and will continue to have direct impact across industry sectors, which could impact the financial condition of businesses, issuers, investors, and capital providers, which then could influence disclosure requirements by regulators. And so across industry sectors we need to ensure there's appropriate expertise to understand the evolving means by which climate change and extreme weather will be realized over the geographies of which businesses are operating and investors are investing. Can businesses demonstrate that they have done due diligence in understanding physical climate risks by utilizing the CRM tool I just described in addition to running scenario analysis to understand how and where physical climate risks will manifest? Hiring climate change experts. Can businesses put together climate change committees working with organizations like the Intact Center to advance understanding further? Do businesses and investors have the appropriate understanding of the guidelines and standards already developed to mitigate extreme weather risk?
So just as an example, guidelines and standards are already available to reduce the risks of flooding and wildfire. So are businesses deploying the operationalization of this information to reduce risk at the operational site level? And then are they working with suppliers and distributors up and downstream to ensure they're reducing risk? And there are even things that are not often considered that could have material impact on a business. So let's think about market access and lost time from work during extreme weather events. So just as an example, a flooded basement across Canada causes individuals to miss, on average, seven days lost time from work, and that's research that the Intact Center has completed. So that's a flooded basement. That is not your home burning down and that is not your home being washed away. That's purely just a flooded basement. People are missing seven days lost time from work.
So as a form of good governance, how could businesses provide information to customers, clients, and employees on ways to reduce extreme weather risk at the level of the home and community? Are businesses working with the municipalities in which they're operating within to ensure the municipalities themselves are aware of and are taking steps to mitigate these risks? So it's important to note that we have resources available for the financial community to be more secure in their understanding and deployment of change on the ground, but those resources need to be used more readily so we can get risk out of the system. And all of these actions will help businesses identify and manage climate risk while potentially serving as a point competitive differentiation.
Melissa Fifield:
Those are some great recommendations and great to know that those tools are available based on the work your team has done. What would you like our audience to take away from our conversation, Kathryn?
Kathryn Bakos:
Well, I think it's really important that we understand that the global financial system is at risk of being impacted by the physical risks of climate change. So so much of the conversation, which importantly so is focused on transitioning to a low-carbon global society, which is incredibly imperative and needed, but we have to be focusing on those physical risks of climate change as well. And to support that efficient capital allocation towards companies responding to these threats, financial markets have taken steps to price risk appropriately through climate related disclosures. But for those climate related regulations to continue to evolve, the marketplace needs to identify what information is lacking to continue to add to the robustness of disclosure requirements. So organizations like the Intact Center, we have done the work, identified some gaps, and offered some solutions.
We've developed a tool that can identify the top key physical climate risks that will impact the business operations of a company operating within a given industry sector, and more importantly what actions need to be taken to get risk out of the system. Is this all the information an investor needs to know? No, of course not, but it's a great place to start. The Intact Center has a wealth of freely available resources from what companies and investors should be doing in regards to physical risks of climate change to what individuals and communities can be doing. We know what to do to get risk out of the system. We just have to do it now.
Melissa Fifield:
Well, thank you very much, Kathryn, for joining me to discuss the evolving disclosure landscape and how capital markets can factor climate risk and opportunity into investment decisions.
Kathryn Bakos:
Thank you so much for having me.
Melissa Fifield:
Stay tuned for more episodes of Sustainability Leaders. We'll host leading experts and continue to explore the impacts of climate change on our social, financial, and natural systems.
Michael Torrance:
Thanks for listening to Sustainability Leaders. This podcast is presented by BMO. You can find our show on Apple Podcasts, Spotify, or your favorite podcast player. Press the follow button if you want to get notified when new episodes are published. We value your input, so please leave a rating, review, and any feedback that you might have or visit us at bmo.com/sustainabilityleaders. Our show and resources are produced with support from BMO's marketing team and Puddle Creative. Until next time, thanks for listening and have a great week.
Speaker 4:
For BMO disclosures, please visit bmocm.com/podcast/disclaimer.
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Le Canada a l’occasion de devenir un chef de file mondial de l’élimination du dioxyde de carbone
Selon un sondage réalisé par l'Institut pour le climat de BMO auprès des chefs d'entreprise, près de la moitié des chefs d'entreprise des États-Unis et du Canada croient que les changements climatique
Un plus grand nombre d’entreprises ont des plans pour lutter contre les changements climatiques en raison de l’importance croissante qu’ils revêtent sur leurs activités : Résultats du sondage
L’électrification constitue une occasion unique dans le cadre de la transition énergétique
Questions et réponses : comment transformer les défis économiques en possibilités
Le soutien du secteur de l’énergie dans l’atteinte des objectifs de décarbonisation du Canada
Trois idées inspirées de la Semaine du climat pour passer à l’action à la COP28
Pourquoi les entreprises doivent accélérer leurs efforts pour lutter contre les changements climatiques
Du caractère essentiel du financement pour doper les technologies d’élimination du carbone
Transformer le système alimentaire mondial au bénéfice des investisseurs et de la planète
Banco do Brasil and BMO Financial Group to Introduce First-of-its-Kind Program to Provide Sustainability-Linked Trade Loans Supporting Brazilian Exporters
BMO Donates $3 Million to GRID Alternatives to Provide Solar Energy Solutions for Low-Income Families
Comment les investissements dans le captage du carbone peuvent générer des crédits carbone
BMO fournit un nouveau produit innovant, le dépôt lié à la durabilité, à Zurn Elkay Water Solutions
Quick Listen: Michael Torrance on Empowering Your Organization to Operationalize Sustainability
BMO seule grande banque nommée au palmarès des 50 meilleures entreprises citoyennes au Canada
Un investissement rentable : la rénovation comme moyen d’atteindre la carboneutralité
Évolution du marché du carbone : ce qu’en pensent les principaux acteurs
BMO et Bell Canada mettent en œuvre un produit dérivé innovant lié à la durabilité et à des objectifs ambitieux de réduction des émissions de gaz à effet de serre
Réduction du gaspillage alimentaire : solutions, occasions et retombées
J’attends avec impatience notre 18e Conférence annuelle sur les marchés agricoles
BMO fait partie d'un groupe convoqué par l'ONU qui conseille les banques mondiales sur l'établissement d'objectifs liés à la nature
Les chefs de file de l’investissement intensifient leurs efforts en vue d’atteindre l’objectif net zéro
Favoriser les innovations technologiques pour renforcer la résilience face aux changements climatiques
BMO célèbre le Jour de la Terre avec la 3e édition annuelle du programme Des transactions qui font pousser des arbres dans ses salles des marchés mondiaux
BMO Donates $2 Million to the University of Saskatchewan to Accelerate Research Critical to the Future of Food
L’infrastructure est la clé d’un marché compétitif en Amérique du Nord – Sommet États-Unis–Canada
Le temps presse pour les solutions au changement climatique - Sommet Canada-États-Unis
North America’s Critical Minerals Advantage: Deep Dive on Community Engagement
Réchauffement climatique : le GIEC lance son dernier avertissement de la décennie
Les légendes du roc réfléchissent aux réussites et aux échecs de l’industrie minière lors de la Conférence mondiale sur les mines, métaux et minéraux critiques
Exploration des avantages de l’extraction de minéraux critiques en Amérique du Nord dans le cadre de la Conférence mondiale sur les mines, métaux et minéraux critiques
La confiance est la denrée la plus précieuse : Message de l’ICMM à la Conférence mondiale sur les mines, métaux et minéraux critiques de BMO
Explorer les risques et les possibilités associés aux notations ESG dans le secteur minier
BMO Experts at our 32nd Global Metals, Mining & Critical Minerals Conference
Evolving Mining for a Sustainable Energy Transition: ICMM CEO Rohitesh Dhawan in Conversation
BMO Equity Research on BMO Radicle and the World of Carbon Credits
BMO tiendra sa 32e conférence mondiale sur le secteur des mines, des métaux et des minéraux essentiels
Public Policy and the Energy Transition: Howard Learner in Conversation
Taskforce on Nature-Related Financial Disclosure (TNFD) – A Plan for Integrating Nature into Business
Points à retenir du sondage sur le climat des petites et moyennes entreprises réalisé par l’Institut pour le climat de BMO
BMO nommée banque la plus durable d'Amérique du Nord par Corporate Knights pour la quatrième année d'affilée
Le financement vert du nucléaire : nouvelle frontière de la transition énergétique?
Assurer l’avenir des approvisionnements alimentaires : le rôle de l’Amérique du Nord
BMO s'est classé parmi les entreprises les plus durables en Amérique du Nord selon les indices de durabilité Dow Jones
Un sondage de l'Institut pour le climat de BMO révèle que les coûts et les priorités concurrentes ralentissent l'action climatique des petites et moyennes entreprises
Gérer et monétiser votre transition vers un monde carboneutre avec BMO et Radicle
BMO est l'institution financière la mieux classée selon le Global Sustainability Benchmark, le nouvel indice de référence mondial du développement durable annoncé lors de la COP 27
COP27 : Les problèmes de sécurité énergétique et l’incertitude économique ralentiront-t-ils la transition climatique?
BMO investira dans les crédits compensatoires de carbone novateurs de CarbonCure pour stocker du CO₂ de façon permanente
Financement commercial : vers le développement durable, une entreprise à la fois
RoadMap Project: An Indigenous-led Paradigm Shift for Economic Reconciliation
Une première canadienne : BMO et l'Université Concordia s'unissent pour un avenir durable grâce à un prêt innovant lié à la durabilité
Intégration des facteurs ESG dans les petites et moyennes entreprises : Conférence de Montréal
BMO entend racheter Radicle Group Inc., un chef de file des services environnementaux situé à Calgary
Investment Opportunities for a Net-Zero Economy: A Conversation at the Milken Institute Global Conference
S’ajuster face aux changements climatiques : l’Institut pour le climat de BMO
How Hope, Grit, and a Hospital Network Saved Maverix Private Capital Founder John Ruffolo
Hydrogen’s Role in the Energy Transition: Matt Fairley in Conversation
Key Takeaways on Ag, Food, Fertilizer & ESG from BMO’s Farm to Market Conference
Les risques physiques et liés à la transition auxquels font face l’alimentation et l’agriculture
Agriculture de pointe : réduire les impacts environnementaux en même temps que les coûts
Building an ESG Business Case in the Food Sector: The Food Institute
J’attends avec impatience notre 17e Conférence annuelle sur les marchés agricoles
Les prix des métaux encore loin d’une nouvelle normalité : Table ronde de BMO sur les mines
Aller de l’avant en matière de transition énergétique : Darryl White s’adresse aux gestionnaires de réserves et d’actifs mondiaux
BMO et EDC annoncent une collaboration pour présenter des solutions de financement durable aux entreprises canadiennes
Refonte au Canada pour un monde carboneutre : Conversation avec Corey Diamond d’Efficacité énergétique Canada
The Role of Hydrogen in the Energy Transition: FuelCell Energy CEO Jason Few in Conversation
BMO est fier de soutenir la première transaction d'obligations vertes du gouvernement du Canada en tant que cochef de file
Article d’opinion: Le Canada peut être un leader en matière de sécurité énergétique
Les mesures prises par le gouvernement peuvent contribuer à stimuler la construction domiciliaire afin de remédier à la pénurie de logements au Canada
Tackling Climate Change in Metals and Mining: ICMM CEO Rohitesh Dhawan in Conversation
La circulaire de sollicitation de procurations et les rapports sur la durabilité 2021 de BMO sont maintenant disponibles
Why Changing Behaviour is Key to a Low Carbon Future – Dan Barclay
BMO lance le programme Services aux entreprises à portée de main - BMO pour les entrepreneurs noirs et annonce un engagement de 100 millions de dollars en prêts pour aider les entrepreneurs noirs à dé
The Post 2020 Biodiversity Framework – A Discussion with Basile Van Havre
BMO annonce son intention de se joindre au programme Catalyst de Breakthrough Energy pour accélérer l'innovation climatique
BMO Groupe financier nommé banque la plus durable en Amérique du Nord pour la troisième année d'affilée
Using Geospatial Big Data for Climate, Finance and Sustainability
Atténuer les répercussions des changements climatiques sur les actifs physiques par la finance spatiale
BMO aide Boralex à aller Au-delà des énergies renouvelables en transformant sa facilité de crédit en un prêt lié au développement durable
Première mondiale : BMO soutient Bruce Power avec le premier cadre de financement vert du secteur nucléaire au monde
BMO se classe parmi les entreprises les plus durables au monde, selon les indices de durabilité Dow Jones
COP26 : Pourquoi les entreprises doivent assumer leur responsabilité sociale
The Future of Remote Work and Diversity in the Asset Management Industry
Changer les comportements est essentiel pour assurer un avenir à faible émission de carbone – Table ronde Milken
BMO aide Teck Resources à progresser vers ses objectifs ESG avec un prêt lié à la durabilité
Première dans le secteur des métaux et des mines en Amérique du Nord : BMO aide Sandstorm Gold Royalties à atteindre ses objectifs ESG grâce à un prêt lié à la durabilité
Éducation, emploi et autonomie économique : BMO publie Wîcihitowin ᐑᒋᐦᐃᑐᐏᐣ, son premier Rapport sur les partenariats et les progrès en matière autochtone annuel
BMO annonce un engagement de financement de 12 milliards de dollars pour le logement abordable au Canada
In support of Canada’s bid to host the headquarters of the International Sustainability Standards Board
Investing in Real Estate Sustainability with Bright Power Inc.
BMO appuie la candidature du Canada pour accueillir le siège du Conseil des normes internationales d'information sur la durabilité
BMO nommé au classement des 50 meilleures entreprises citoyennes au Canada de Corporate Knights
ESG From Farm to Fork: Doing Well by Doing Good
Banques centrales, changements climatiques et leadership : Forum annuel destiné aux femmes œuvrant dans le secteur des titres à revenu fixe, devises et produits de base
BMO met sur pied une nouvelle équipe innovatrice pour la transition énergétique
L’appétit croissant pour l’investissement dans un but précis dans les valeurs à revenu fixe par Magali Gable
BMO organise le congrès annuel mondial sur les marchés agricoles pour une 16e année consécutive
Première nord-américaine : BMO aide Gibson Energy à transformer entièrement une facilité de crédit en un prêt lié à la durabilité
Le programme Des transactions qui font pousser des arbres permettra d’en planter 100 000
Les arbres issus des métiers bénéficient d'un marché obligataire ESG solide
Understanding Biodiversity Management: Best Practices and Innovation
The Changing Face of Sustainability: tentree for a Greener Planet
La 30e conférence mondiale annuelle sur le secteur des mines et des métaux de BMO est en cours
Favoriser des résultats durables : le premier prêt vert offert au Canada
Episode 29: What 20 Years of ESG Engagement Can Teach Us About the Future
Rapport sur les perspectives de 2021 de BMO Gestion mondiale d'actifs : des jours meilleurs à venir
Episode 28: Bloomberg: Enhancing ESG Disclosure through Data-Driven Solutions
Comment Repérer L’écoblanchiment Et Trouver Un Partenaire Qui Vous Convient
BMO se classe parmi les entreprises les plus durables selon l'indice de durabilité Dow Jones - Amérique du Nord
Episode 27: Preventing The Antimicrobial Resistance Health Crisis
BMO investit dans un avenir durable grâce à un don d’un million de dollars à l’Institute for Sustainable Finance
BMO Groupe financier franchit une étape clé en faisant correspondre 100 pour cent de sa consommation d'électricité avec des énergies renouvelables
BMO Groupe financier reconnu comme l'une des sociétés les mieux gérées de manière durable au monde dans le nouveau classement du Wall Street Journal
Episode 23: TC Transcontinental – A Market Leader in Sustainable Packaging
Les possibilités de placement durables dans le monde d’après la pandémie
BMO Capital Markets to host 2020 Prescriptions for Success Healthcare Virtual Conference
Les sociétés axées sur l’efficacité énergétique peuvent maintenant réduire leurs coûts d’emprunt
BMO Groupe financier s'approvisionnera à 100 pour cent en électricité à partir d'énergies renouvelables
Episode 13: Faire face à la COVID-19 en optant pour des solutions financières durables
Épisode 09 : Le pouvoir de la collaboration en matière d'investissement ESG
Épisode 08 : La tarification des risques climatiques, avec Bob Litterman
Épisode 07 : Mobiliser les marchés des capitaux en faveur d’une finance durable
Épisode 06 : L’investissement responsable – Tendances et pratiques exemplaires canadiennes
Épisode 04 : Divulgation de renseignements relatifs à la durabilité : Utiliser le modèle de SASB
Épisode 03 : Taxonomie verte: le plan d'action pour un financement durable de l'UE
Épisode 02 : Analyser les risques climatiques pour les marchés financiers