Nephila Capital senior executive Barney Schauble has helped to fund the launch of a new initiative from non-profit Ceres that aims to accelerate efforts in the capital markets to reduce the worst financial impacts of the global climate crisis and other sustainability threats.
Ceres is a non-profit organisation that leads a national coalition of investors, environmental organisations and other public interest groups working with companies to address sustainability challenges such as global climate change and water scarcity, while advocating for sustainability leadership from those involved.
It’s mission has been to encourage the integration of sustainability into capital markets, aiming to provide leadership, insight and the business case to make this compelling for all market actors.
Barney Schauble, who joined catastrophe, weather and climate focused insurance and reinsurance investment group Nephila Capital back in 2004 and is currently the firms Head of Labs, is also the Chair of the Board of Ceres.
Ceres has established the Ceres Accelerator for Sustainable Capital Markets with Schaubles help, after receiving seed funding donated by Schaubles family.
The Ceres Accelerator launches as the non-profit reaches its 30th year of operation and cements its focus on building sustainable capital markets for the future.
The Accelerator will aim to move financial regulators and asset owners to address climate change as a systemic financial risk and hopes to support initiatives to spur large-scale behavior and systems change.
It’s seen as a ramping up of Ceres’ efforts to transform capital markets practices and policies, in order to accelerate action to help reduce the worst financial impacts of the global climate crisis and other sustainability threats.
The Accelerator will focus on demonstrating to regulators and other bodies that climate change is a systemic financial risk which must be addressed in order to preserve the stability of the financial system and working with the world’s largest asset owners to transition their investment portfolios to net-zero greenhouse gas emissions by 2050.
In addition, the Accelerator will advocate for a price on carbon at the national and global levels.
“Ceres has a proven history, working alongside private and public sector leaders to confront global sustainability threats with robust action,” explained Schauble. “But we can’t reduce or eliminate these threats without changing the practices and policies that govern our capital markets. This donation represents my family’s full faith in Ceres to drive change at the pace and scale needed to revitalize our capital market systems.”
“Private and public sector progress is not happening fast enough or with the right level of ambition to tackle the financial impacts of not only the climate crisis, but the growing threats around deforestation, and water scarcity and pollution,” added Ceres CEO and President Mindy Lubber. “We need to change our capital market systems in order to move faster and more boldly than ever before at the speed and scale required to avoid catastrophe. The Ceres Accelerator will deliver on this ambition and drive the urgent systems and policy changes we need to power a net-zero carbon, sustainable economy.”
Studies show that climate related risks could result in the U.S. gross domestic product reducing by up to 10.5% by 2100. Climate related catastrophes from heat waves, to wildfires, and other extreme weather events, as well as rising sea levels could result in hundreds of billions of dollars in costs due to lost labor, reduced crop yields, health problems and the effects of crumbling infrastructure.
That’s not to mention the direct financial impacts of these catastrophe and weather extremes that climate change may exacerbate.
Ceres wants to drive the large-scale transformation needed to stave off the worst impacts of the climate crisis on the economy and environment, with this Accelerator providing a new focus point for direct work and action alongside capital markets and investors.
“We have to undertake a multi-faceted approach to address climate and sustainability-related risks in our investment portfolios,” explained Tony Davis, CEO and CIO of Inherent Group, a member of Ceres board of directors. “Investors now will be supported by the Ceres Accelerator through new thought leadership tools and a variety of new strategic approaches. Only by working with other capital market influencers will we be able to reduce systemic financial risks across every asset class.”
“We need to act with the urgency our climate emergency demands – and that means reducing greenhouse gas emissions at a scale that reaches across the entire economy,” Scott Stringer, New York City Comptroller, and a member of Ceres board of directors said. “The Ceres Accelerator is a landmark step in our climate efforts and will help us find the market levers and policies we need to make real change.”
“The Ceres Accelerator will provide a necessary lever for investors to address systemic financial climate risks more quickly and collaboratively,” added Betty T. Yee, California State Comptroller, and a member of the board of directors at two of the largest pension funds, CalPRS and CalSTRS, and Ceres. “If we are to transition to net- zero-carbon economy with the urgency required, then we can’t do it alone. We are counting on Ceres as a partner and thought leader to help drive forward this coordinated effort and effectively take on the challenge head on.”
“Current efforts are falling short — and the financial regulators and policymakers that govern our capital markets need to address climate change as a systemic financial risk,” commented Jack Ehnes, CEO of California State Teachers’ Retirement System (CalSTRS), a member of the Ceres board of directors. “The Ceres Accelerator will reshape the systems and call for stronger policies, including a price on carbon to create the market signals needed to drive clean energy investments and strengthen capital markets.”
Clearly, the insurance, reinsurance and insurance-linked securities (ILS) industry has a role to play in helping the world to manage its climate exposure and in providing financial buffers to support transition.
Schaubles commitment to Ceres and its new Accelerator is commendable, as it is only through leadership and initiatives that engage the world’s largest asset owners, investors and capital markets players that real progress can be made.
The Accelerator is raising additional funding to support its important work. Interested parties can read more about the initiative and donate here.
Barney Schauble of Nephila will be speaking at our next insurance-linked securities (ILS) conference, ILS NYC 2020 held in New York on February 7th, where he will be leading a discussion covering topics including the future of climate risk transfer and the role of the capital markets. Get your tickets for the conference today.