This week's updates at a glance:

Opportunity from the IFoA... Fully Funded PhD: Exploring Natural Capital and Biodiversity Risk and Opportunity within the Actuarial Profession In the news... Roaring Success of Scottish Windfarm Shows Global Potential Oxford to Have 'UK's First' Zero Emission Zone after Council Approval White House Prepares Massive Infrastructure Bill with Universal Pre-K, Free Community College, Climate Measures Joe Biden and Jair Bolsonaro Square Off over the Amazon Trawling for Fish May Unleash as Much Carbon as Air Travel, Study Says   What we're reading... Study in Nature: Protecting the Ocean Delivers a Comprehensive Solution for Climate, Fishing and Biodiversity Crisis in the Himalayas: Climate Change and Unsustainable Development Opinion on... AI can Shine Digital Sunlight on to Company Greenwashing Unleashing the Climate Market Tune in... Sessional Roundtable: The Importance of Biodiversity Risks for Actuaries Dirty Truth About Your Rubbish: Dispatches

Place available for UK students. Closing date 25 April 2021.

The loss of biodiversity threatens the health of ecosystems that provide fundamental services to the economy, including animal pollination of food crops, natural water treatment and fertile soil. These important risks should be taken into account across the finance sector, where investments and insurance are the backbone of economic growth and resilience. The management and measurement of these risks is a field where actuaries (as the profession focussed on financial risk) are well placed to contribute. In addition, the use of financial risk techniques may offer other opportunities to manage biodiversity risk.
 
The project may encompass a variety of social science approaches. Its anticipated methods will include interviews, observations (anthropology), field notes and workshops. If appropriate and available case studies of previous biodiversity loss or natural capital management (for example oil spills and compensation payments or payments for ecosystem services) will be explored, especially where quantification of biodiversity has led to positive or negative outcomes.
 
The PhD is jointly supervised by SwissRe and the Institute & Faculty of Actuaries.

Find out more and apply here.

Hywind Scotland, situated in the stormiest part of the North Sea, has broken worldwide records for maximum energy output. Developed by Norwegian company Equinor, this floating windfarm has seen such success that the firm plans to build further windfarms off the Norwegian coast, before scouting further UK sites.

The concept took 10 years to develop: standing 175m above sea level, and reaching 75m below the surface, to counterbalance the weight of the tower and 154m-long rotor blade. By locating these farms further out at sea, winds blow more steadily and hence generate more power: as such, Equinor has also been able to cut costs by 40%. This floating windfarm has been so successful that it has even sped past European offshore windfarms’ increasingly mainstream power generation, which saw costs tumbling in recent years. Following Hywind Scotland’s success, both the Welsh and Cornish coasts are seeing competition for floating windfarms.

Read the article here (The Guardian).

Oxford to Have 'UK's First' Zero Emission Zone after Council Approval
 

Oxford is set to become the first place in the UK to have a Zero Emission Zone (ZEZ). The pilot, which will be introduced in August, will see non-zero emission vehicles subject to charges in certain zones, between 07:00 and 19:00. A wider ZEZ covering the rest of the city centre is expected to be introduced in spring 2022.
 
The council said charging non-zero emission vehicles represented the "fairest balance between accelerating the transition to a zero-emission transport system and maintaining access". The authority said the approach - where only electric cars will not be charged - mirrored similar schemes in London and other cities where more polluting vehicles are charged rather than banned.

Read the article here (BBC News).

Joe Biden and Jair Bolsonaro Square Off over the Amazon
 

This is perhaps the first time that a major bilateral relationship has focused on trees." In a departure from the bonhomie between Donald Trump and Brazil's president Jair Bolsonaro, the Biden administration has signalled that it will get tougher on persuading Mr Bolsonaro to stop the Amazon from becoming another casualty of climate change. Brazil is home to more than 60% of the Amazon's tree cover, a rainforest that is brimming with irreplaceable biodiversity. It is also a carbon sink and burning or chopping it down turns it into a source of carbon emissions instead.
 
There are a few carrots and sticks on the table:

Read the article here (The Economist ‑ paywall).

A new study published in the scientific journal Nature offers a comprehensive assessment of where strict ocean protection can contribute to a more abundant supply of healthy seafood and provide a cheap, natural solution to address climate change—in addition to protecting embattled species and habitats.

The study, Protecting the global ocean for biodiversity, food and climate, answers the question of which places in the ocean should we protect for nature and people. The authors developed a novel framework to produce a global map of places that, if protected from fishing and other damaging activities, will produce multiple benefits to people: safeguarding marine life, boosting seafood production and reducing carbon emissions.

An international team of 26 authors identified specific areas that, if protected, would safeguard over 80% of the habitats for endangered marine species, and increase fishing catches by more than eight million metric tons. The study is also the first to quantify the potential release of carbon dioxide into the ocean from trawling, a widespread fishing practice—and finds that trawling is pumping hundreds of millions of tons of carbon dioxide into the ocean every year, a volume of emissions similar to those of aviation.

Read a summary of the report here (National Geographic).

In February 2021 a devasting rockslide consumed villages in the Indian Himalayas killing over 200 people. It also tore through a bridge and two hydropower plants, 9 and 15 miles away. Locals and scientist say this is further evidence of the crisis unfolding in the Himalayas. Climate change and aggressive road and dam building has destabilised the world's tallest mountain range.
 
Temperatures in the Himalayas have risen faster than in other mountain ranges. Scientists estimate that Himalayan glaciers will recede by a third by 2100 if the increase in global temperatures is capped at 1.5C — the most ambitious target — with losses far higher if the target is missed.
 
Roaring economic growth has in recent decades brought a frenzy of activity to India’s Himalayan states, home to 80m people. Towns have swelled in size. Contractors felled forests, cut into mountain slopes and dug tunnels in order to make way for more houses, roads and dams. After a flooding disaster in Uttarakhand in 2013 killed about 6,000 people, a Supreme Court-appointed committee found hydropower dams aggravated the disaster and warned against construction in fragile, high-altitude areas.
 
Read the report here (FT - paywall).

Swiss and German academics have created an AI-based solution to track corporate climate disclosures: “ClimateBert”. Having perused the accounts of 800 companies backing Mark Carney’s “task force for climate related financial disclosure” (TCFD), ClimateBert concluded that many firms report predominantly on non-material climate risk information: i.e. they are greenwashing. 2020 saw an explosion in popularity of ESG: the Bank of America now estimates circa 40% of all investible assets carry the ‘ESG’ brand.

In this opinion piece, Gillian Tett argues that criticising ESG is for the greater good, in that it will drive and enforce higher standards. She cites derivatives and securitisation as finance trends which saw enhanced scrutiny and oversight far later in their lifecycles. She celebrates the volume of data available for tracking ESG standards (including the capability of Climate Bert), albeit if much of the data lacks consistency and ease of consolidation. With ever-growing data, come all the more open-source platforms seeking to analyse it: both Cambridge university and King’s College London are building systems to track ESG risks in both sovereign bonds and companies respectively. In this way, the publicised data, and open-source nature of the analysis, will facilitate a ‘bottom-up’ pressure on companies to enhance their ESG contributions.

Read the opinion piece here (FT - paywall).

Unleashing the Climate Market
 

Sessional Roundtable: The Importance of Biodiversity Risks for Actuaries

27 April, 09.00-10.30am BST
 

Actuaries have a lot to offer biodiversity management over the next decade as the world develops more depth to its response to this global challenge. This sessional offers an opportunity to learn about this emergent risk, to contribute to our thinking as a profession and help us develop the next steps forward.
 
Due to the popularity of the event, the session on 26th Apr is now full and an additional session has been added on 27th Apr. The sessions are free to all IFoA members.
 
Find our more and register here (IFoA).

Channel 4 Dispatches investigates millions of tonnes of waste we leave out for recycling actually ends up being burned,  pushing up carbon emissions, and locking councils into long and expensive waste contracts. It also reveals which areas of the country incinerate the most.
 

Up until the mid-90s we sent 90% of our waste to landfill, a cheap and easy way to dispose of rubbish. The Government brought in a new tax on landfill making it much more expensive, so councils found an alternative. The solution was ‘energy from waste’, where rubbish is burned to produce electricity.
Key messages:

We are now burning more waste than we recycle. Latest figures for England show that in 2019 11.6m tonnes of waste was incinerated while 10.9m was sent for recycling.
Dispatches can reveal that on average 11% of the waste we put out for recycling is being incinerated.
The total carbon emissions from incineration have now overtaken those from coal.
 
Available on demand here (Channel 4).

Communication is at the heart of shifting mindsets on climate and sustainability issues, and is vital in highlighting and understanding steps we can take as finance professionals to implement positive change.

The purpose of Sustainable Finance Community is to encourage members to read, share and discuss content, in order to help us with this aim. We want to encourage information to flow both ways, so please get in touch by replying to sustainablefinancecommunity@gmail.com or follow us on LinkedIn and Twitter.

The weekly newsletter summarises information from different sources for the benefit of subscribers. While we take care to select articles, papers and opinions from reputable sources, we do not perform independent verification and hence these summaries should not be relied upon for any purpose. Further, the statements, opinions and conclusions that are summarised within the newsletter do not necessarily represent the views of the IFoA nor the newsletter authors and their employers.

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