Florida sizes up climate risks to investments

October 6, 2008 at 7:23 pm | Posted in Climate and economy | Leave a comment
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Given the events of the last few weeks, it’s little wonder the public’s confidence in the validity of investor confidence has taken a nosedive.  After all, it’s hard to have faith in their risk assessments when it looks like they made a miscalculation on the order of $700 billion plus. 

Yet, Florida’s chief financial officer, Alex Sink, recently made a bet that fund managers will play a critical role in protecting taxpayer dollars from risks associated with climate change. Check out the release.

He’s not going to trust the fund managers to do their own reporting, though. Instead, he’s partnered with RiskMetrics Group, an international risk management company, to analyze how well 21 different investment funds do when it comes to assessing climate risks.

The funds will be rated on how prepared the companies in their corporate bond portfolios are to deal with climate-change risks.  The key risks for Florida include increased hurricanes, storm surge and rising sea level. 

To evaluate the funds, RiskMetrics will be using a framework developed by the Investor Network on Climate Risk. The network was established in 2003, and its members manage more than $7 trillion in assets. 

A new study by Florida State University sets the losses associated with sea level rise projections at $6.7 billion for Florida’s Dade County alone, according to a recent story by ScienceDaily.

Currently, corporate bond investments represent $3.4 billion in the Florida Treasury’s portfolio.

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