PRI chair Skancke among leading figures in new investor group looking at climate change risks

CICERO Climate Finance chaired by Norges’ supervisory council member Lund

Martin Skancke, chairman of the United Nations-backed Principles for Responsible Investment (PRI), is among a set of leading figures that has joined a new initiative assessing the financial risks of global warming that has been launched by Norwegian advisory group CICERO (the Center for International Climate and Environmental Research, Oslo).

CICERO, known for its assessment of green bonds, says its climate scientists have allied with representatives from a number of the world’s largest institutions, including BlackRock, Swedish state fund Andra AP-fonden (AP2) and Nordic bank SEB, to aid investors in judging the risks that arise from global warming, through animal extinction, rising sea levels and weather changes.

Dubbed CICERO Climate Finance, the project also targets the development of tools that will help investors understand the risks inherent in their long-term holdings, whether these arise from climate change or a shift from a fossil fuel-based economy to a low-carbon one.

Skancke will serve on an advisory board that aims to “prioritise and inform” the content of CICERO Climate Finance’s work.

The new body is chaired by chaired by Kjetil Lund, the former Norwegian finance official who joined the supervisory council of Norges Bank earlier this year.

Lund, current head of public affairs at renewable energy firm Statkraft, is a long-time climate change advisor who was on the board of the UN’s Green Climate Fund from 2012 – 2013.Also sitting on the advisory board are head of climate solutions at BlackRock, Ashley Schulten, Jan Erik Saugestad, CEO at Storebrand Asset Management and the World Bank Treasury’s Heike Reichelt.

The group’s first meeting, held today at the Oslo Stock Exchange, will see its members work to define common projects from a range of issues. It suggests that possible first topics might include the problem of stranded assets and coal divestment campaigns, the impact of extreme events like wildfires or floods, and looking beyond carbon reporting towards good management practices for climate risk.

Schulten said that she was looking forward to working with CICERO again after the two companies worked together on BlackRock’s green bond business. She added: “As we seek to expand our evaluation of the risks portfolios face from climate issues, both from a transition and physical perspective, we look forward to continuing to benefit from CICERO’s climate expertise while sharing with them what metrics are most meaningful to investors.”

The project has been part-funded by the Norwegian Ministry of Foreign Affairs, represented on the CICERO Climate Finance advisory board by Georg Børsting, climate director at the ministry. He said that the new group would utilize “the nexus of climate finance expertise in Norway” and bring it to an international audience.