Dr. David K.A. Mordecai was invited to participate in the Institute of International Bankers (IIB) Climate Change Scenario Analyses webinar. The webinar was held on November 8, 2021, and was co-hosted by Cushman & Wakefield and CoreLogic.
The agenda for the webinar posed the following questions:
- For large US-based international and national banks, what climate-related data will be required under regulatory reporting?
- How will climate risk be scored?
- Will climate risk scoring influence credit availability to certain borrowers?
- How will Greenhouse Gas (GHG) emissions, physical risks and transition risks be measured and managed?
David Mordecai primarily discussed the role of transition risk and contingent liability analysis in stress-testing corporate and municipal cost structures via transmission channels (e.g., credit spread volatility, funding illiquidity, commodity supply/demand shocks, and telecommunications, electricity and transportation network traffic) corresponding to climate-related regional weather volatility. He further highlighted the need to broaden the definition and scope of climate risks and stranded assets, as well as the necessity for rigorous scientific measurement of pertinent weather volatility statistics, and corresponding economic exposure to damage (particularly at the relevant temporal and spatial scales, i.e., mesoscale conditions and events).
The panel was moderated by David L. Risdon, Senior Managing Director and Head of Banking & Regulatory Solutions, Cushman & Wakefield. The panelists were the following:
- Chris Bennett: Global Head of ESG Strategy and M&A, S&P Global Sustainable
- Peter Carroll: Executive, Public Policy and Industry Relations, CoreLogic
- Hugh Conroy: Partner, Financial Institutions Regulation, Cleary Gottlieb
- Robert Engle, PhD: Nobel Laureate in Economics, Professor Emeritus of Finance, NYU Stern School of Business, Co-Director, The Volatility and Risk Institute and Co-Author, The Federal Reserve Bank of New York’s Report on Climate Stress Testing
- David K.A. Mordecai, PhD: RiskEcon® Lab @ Courant Institute of Mathematical Sciences NYU, and President, Risk Economics®
The webinar can be viewed here.
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Risk Economics provides advisory services at the intersection of commercial business-process engineering and risk engineering with a particular focus on coupling commercial reinsurance and financial technology, through the rigorous application of agent-based, demographic, and statistical methodologies to microeconomic and macroeconomic analytics.