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'Investing in our future': EU touts green infrastructure blitz at heart of €1.85tr recovery plan

'Investing in our future': EU touts green infrastructure blitz at heart of €1.85tr recovery plan

European Commission unveils sweeping economic recovery strategy in support of Green Deal ambition

A sweeping €1.85tr stimulus strategy to rebuild Europe's economy from the wreckage of the coronavirus crisis has been unveiled by the European Commission today, promising a green infrastructure spending blitz to help put the continent on a path towards net zero greenhouse gas emissions by 2050.

The Commission promised to place its Green Deal ambitions to deliver a 'climate neutral' economy and establish the bloc as a world leader in digital technologies at the forefront of its sweeping package of financial proposals, which include a fresh €750bn investment plan, a restructured EU budget for 2021-27, and a re-drafted list of priorities for 2020.

The proposed stimulus package calls for a "renovation wave" of buildings and infrastructure in support of the Green Deal, as well as investments in circular economy efforts, renewable energy projects, clean hydrogen infrastructure, green transport networks, and an enhanced Just Transition Fund for workers.

It follows widespread support and vocal calls for a green economic recovery from the pandemic led by businesses, major investors, influential politicians, and millions of healthcare workers and citizens over the past two months, heaping pressure on the Commission to step up to the plate. Just today, a group of MPs and campaigners set out demands for a major green recovery drive in the UK, while a report by financial analyst McKinsey estimated that mobilising €75-150bn of capital towards low carbon projects could yield €180bn-350bn in benefits and cut carbon emissions by up to 30 per cent by 2030.

Today's stimulus package does not focus solely on decarbonisation, and the breadth and scope of its proposals are still being worked through by stakeholders, but Commission President Ursula von der Leyen made a point of stressing the need to use the stimulus to drive long-term climate action.

"This is Europe's moment," she said. "The recovery plan turns the immense challenge we face into an opportunity, not only by supporting the recovery but also by investing in our future: the European Green Deal and digitalisation will boost jobs and growth, the resilience of our societies and the health of our environment."

"Our willingness to act must live up to the challenges we are all facing," she added.

The Commission said it wanted to "harness the full potential of the EU budget" to boost the economy and secure its long-term future in the midst of a deepening recession, proposing a new 'Next Generation EU' funding instrument that would see it borrow €750bn to channel into EU programmes.

In addition, to making funds available "as soon as possible to respond to the most pressing needs", it is seeking to restructure the EU's 2021-27 budget to bring forward €11.5bn of spending to be used in 2020.

These measures, backed by "targeted reinforcements" to the upcoming EU budget, would bring the total financial firepower outlined by the Commission today to €1.85tr, it said.

Some of the spending would be divvied up into a new Recovery and Resilience Facility of €560bn to offer financial support for investments and reforms "including in relation to the green and digital transitions", encompassing €310bn in grants and €250bn in loans for all member states. At least 25 per cent of these loans and grants would have to be spent on climate action, it said.

Moreover, the package sets out plans to beef-up the proposed Just Transition Fund to €40bn to support workers and regions affected by the net zero transition. And it proposes a €15bn reinforcement for the European Agricultural Fund for Rural Development, to support "structural changes necessary" in line with the Green Deal and targets supporting the Commission's biodiversity and 'Farm to Fork' food security strategies.

Looking further forward, the plan reiterates proposals to implement a carbon border mechanism to prevent 'carbon leakage' in trade in and out of the EU, which it estimates could reap between €5bn and €14bn for the bloc each year

"Relaunching the economy does not mean going back to the status quo before the crisis, but bouncing forward," the Commission said in a statement. "We must repair the short-term damage from the crisis in a way that also invests in our long-term future."

The overall figure touted by the Commission for its recovery nevertheless falls short of the €2tr of new investment demanded by MEPs earlier this month, who had adopted a resolution calling for a "bold and ambitious" strategy centred around the net zero transition and the goals of the Paris Agreement.

As such, today's strategy garnered a mixed reception from environmental groups and NGOs. Jeremy Wates, secretary general of the European Environment Bureau (EEB) - a coalition of 160 environmental groups - said the Commission's package was a "step in the right direction" but that it was still "far from perfect", citing a lack of focus on habitat destruction and biodiversity loss.

In addition Climate Action Network (CAN) Europe's finance and subsidies policy coordinator, Markus Trilling, warned the package failed to curb support for fossil fuels, allowing countries too much leeway for national spending on high carbon infrastructure which he warned "runs the risk of more polluting activities being subsidised".

"The lack of a more ambitious climate action target for the EU budget and the new recovery fund risks derailing the European climate and environmental objectives," Trilling added.

But the thrust of the recovery package was broadly welcomed by green businesses and investors.

Stephanie Pfeifer, CEO at the Institutional Investors Group on Climate Change (IIGCC), which represents members managing €30tr of asset, said the plan would be "well received by investors" and provided a "roadmap for a stronger, more resilient and sustainable economic future".

Eliot Whittington, director of the European Corporate Leaders Group - which counts Unilever, Coca-Cola European Partners, IKEA, Tesco, Sky and EDF among its members - welcomed the Commission's "bold package", but cautioned that "time will be needed to unpick exactly how much green finance has been earmarked".

"The recovery package is not only about helping businesses and citizens to bounce back - it is also about preparing for the future," he said. "This package can drive investment into the key transformations needed to meet Europe's net zero emissions target, including buildings renovation, renewable energy, clean mobility, industrial innovation and more sustainable land use and food systems."

Despite the disruption caused by the Covid-19 pandemic, the EU Commission today indicated it broadly intends to continue with much of its 2020 work plan for the Green Deal, promising to set out its proposal for a more ambitious 2030 climate target later this year, amid calls for Europe to ramp up to a 55 per cent cut in emissions from 1990 levels.

In the immediate term, the proposed recovery plan still requires approval from the EU Council and Parliament. The Commission said it would be seeking "rapid political agreement" by July in order to "get the economy back on its feet and build for the future".

Planet Tracker: Investors face financial risk as salmon industry careers toward 'ecological brink'

Planet Tracker: Investors face financial risk as salmon industry careers toward 'ecological brink'

Report warns that investors must put their clout behind emerging innovative technological solutions, such as offshore closed cage systems and onshore recirculating aquaculture solutions, for the industry increase production supply through 2030.

The Atlantic salmon farming industry is approaching the practical physical limit permitted by existing farming methods, placing a highly-concentrated pool of investors and industry players at "considerable financial risk", think tank Planet Tracker has warned today.

A host of environmental factors, including a build-up of effluent, warming seas, and increased incidence of disease pose a "significant" threat to the industry, the report notes, yet these environmental challenges are not priced into existing company and market valuations.

Planet Tracker argues that substantial investment in emerging sustainable farming technologies is required to curb the environmental risks faced by the $18bn salmon farming industry, which is approaching its "ecological brink" after a decade of dramatic growth.

The report, titled dubbed Loch-ed Profits, warns production forecasts for farmed salmon through to 2025 will be between six to eight per cent lower than estimated if coastal ecological health continues to worsen and current trends continue.

The estimated drop in production, which is equivalent to $4.1bn of revenue, is likely to be exacerbated by the sharp slump in demand for salmon seen during the Covid-19 crisis. The pandemic has spurred a 14 per cent decline in spot salmon prices in the first quarter of 2020, the report notes.

Atlantic salmon, the focus of Planet Tracker's report, is the second most commonly farmed aquatic species and accounts for more than 90 per cent of total farmed salmon. The industry has been steadily growing for more than a decade, but coastal open net pen farming, which accounts for more than 95 per cent of all Atlantic salmon production, is constrained by a number of factors, including a limit on the availability of new sites and increasing environmental threats.

Coastal open net pen farming has been associated with significant environmental concerns, given that it relies on natural processes to remove waste and provide oxygen. The practice has also been accused of dispersing chemicals, parasites, and disease from farming operations into the surrounding natural environment.

In the report's foreword, Planet Tracker founder Mark Campanade stressed the farmed salmon industry had reached "a critical point" in its development.

"While positive mid-term demand and higher prices may give the impression of a stable and profitable sector, the salmon farming industry will have to overcome some significant barriers in the medium term to transition from current coastal farms to innovative technological solutions, such as offshore farming, if it is to continue to increase production supply through to 2030," he said.

Planet Tracker argues that the industry should embrace off-shore closed cage systems ­- floating, enclosed farms sunk at depths where sea lice cannot survive in the open sea ­- and onshore recirculating aquaculture systems. Both technologies, however, are more expensive that existing farming methods and will require "substantial" investment to be rolled out at scale, it said.

As such, Campanade emphasised how the report "seeks to demonstrate to investors that investing now in making the industry more sustainable will stabilise mid-term operating cost margins, enabling profitable growth to continue whilst mitigating environmental risks, as the industry is looking to expand beyond coastal operations to install more onshore and offshore-farming capacity".

A relatively small number of private and institutional investors are exposed to the financial and environmental constraints highlighted by Planet Tracker's report, given that salmon production is a highly concentrated industry. Just four countries - Canada, the UK, Norway, and Chile ­- accounted for more than 90 per cent of global salmon production in 2017. And just 10 publicly traded salmon companies with a combined market capitalisation of $28bn produce more than 50 per cent of all farmed salmon.

In today's report, Planet Tracker lays out a series of recommendations that it claims could allow farmed salmon companies to reduce production losses over the decade to come. It said that companies should report on compliance with environmental regulations and industry guidelines; maintain an effective and auditable Environmental and Social Management system that explains salmon losses; deploy remote electronic monitoring systems with live data feeds accessible to investors; increase research and development spending on environment risk mitigation, such as disease and sea lice control measures; and strengthen control of third-party audited transparency and traceability for all feed sources.

A relatively small pool of investors also hold considerable sway in pushing the salmon industry towards a more sustainable and profitable future, the report notes. Just 20 investors account for more than $15bn in holdings in the sector.

As such, Planet Tracker recommends that investors should manage their exposure to risk by demanding a raft of improved reporting, measurement and assessment measures from companies, while also advocating for marine spatial planning to maximise sustainable famed production and mitigate environmental risks.

Campanale's work at the Carbon Tracker think tank has gained considerable traction amongst top investors by highlighting how many carbon intensive companies are over-valued and exposed to considerable climate-related risks. Today's report suggests that the aquaculture sector could face very similar challenges if operators and investors fail to tackle escalating environmental risks. 

'This is the moment': MPs and campaigners call for multi-billion pound net zero recovery drive

'This is the moment': MPs and campaigners call for multi-billion pound net zero recovery drive

Cross party Environmental Justice Commission sets out demands for 'faster, further and fairer' net zero transition

The UK must accelerate the transition towards net zero emissions in the wake of the coronavirus pandemic by ramping up its decarbonisation goals for 2030 and investing a further £30bn each year in 'shovel-ready' green infrastructure projects, a cross party group of politicians, academics, and business figures have urged.

The Environmental Justice Commission, an expert group established by think tank IPPR last year, today set out a host of proposals for delivering a net zero emission economy, urging the UK government to now move "faster, further, and fairer" to combat climate change and environmental destruction, while putting citizens' livelihoods and wellbeing at the forefront of efforts to recover from the coronavirus crisis.

The wide-ranging report urges the UK to strengthen its climate action efforts in order to spur wider international action ahead of the crucial COP26 summit next year. Specifically it calls for Ministers to commit to decarbonising the economy at a quicker pace over the coming decade, adopt new targets to reduce the UK's global environmental impact, and place a stronger onus on delivering a 'Just Transition' for citizens.

Members of the Commission include co-chairs Laura Sandys - a former Conservative MP - and Green Party MP Caroline Lucas, as well as economist Kate Raworth, climate scientist Dr Emily Shuckburgh, and environmental lawyer and activist Farhana Yamin, among a raft of top green figures.

Lucas, the Green Party's sole MP and former leader, said enacting the blueprint set out by the Commission offered an opportunity to fix a broken economic model she claimed was driving environmental destruction while also failing "the majority of people across the UK".

"We can build back better - but only if we embed an agenda of rapid decarbonisation within a broader social and economic justice agenda, and ensure that those communities most affected by change have the power to lead and shape it," she said.

Prime Minister, Boris Johnson, has promised to prioritise low carbon investment in the UK's economic recovery plans, while similar statements from Business Secretary Alok Sharma further indicate the net zero agenda remains a core focus for the government as the country rebuilds from the pandemic. Few concrete spending proposals or recovery plans have so far emerged, however, and the full extent of the economic damage wrought by the pandemic remains unclear. The Department for Business, Energy and Industrial Strategy (BEIS) was considering a request for comment on the new report at the time of going to press.

The UK has one of the best decarbonisation track records of any major economy over the past decade. However, even before the Covid-19 outbreak, the country was on course to fall short of its interim decarbonisation target in the fifth carbon budget for the 2028-2032 period, which is based on the previous 2050 climate target to cut emissions 80 per cent that has been supplanted by the new net zero goal.

The Commission is therefore today calling on the government to set a stricter emissions reduction goal for 2030 in line with a net zero decarbonisation trajectory and the Paris Agreement's 1.5C global warming pathway. It adds that such a goal should be backed by annual investments of at least £30bn in green infrastructure over and above current spending plans.

In order to help spur an immediate economic boost investment should be directed towards 'shovel-ready' green projects that create the most jobs, such as energy saving measures, tree planting and peatland restoration programmes, work to improve and expand the rail network, and the rolling out of electric vehicle charging infrastructure, the report argues.

Another £5bn should also be invested in a national 'Just Transition Fund' to support regions most heavily impacted by the shift to a net zero economy, it said, citing IPPR estimates that hundreds of thousands of jobs in carbon-intensive industries are situated outside London and the South East. A Net Zero Just Transition delivery body should be established to manage the process, it added.

The calls for renewed green infrastructure spending echoes similar recommendations from the Committee on Climate Change, which has written to the government urging ministers to direct economic stimulus towards green 'shovel ready' projects such as energy efficiency measures, renewables, and EVs. The independent advisory body is expected to present more detailed recommendations on how to drive a green coronavirus recovery to Parliament next month.

IPPR's Luke Murphy, head of the Commission, said investing billions of pounds in green projects was a "no-brainer". "This is the moment for big, bold action by the government to deliver on its promises to decarbonise the UK economy and restore nature," he said. "Investing right now in projects like insulating homes, planting trees and infrastructure to increase walking and cycling will create jobs and help kick-start the economy after the Covid-19 crisis. It will also help us tackle the next crisis that we know for sure is coming our way."

Elsewhere, the IPPR Commission's report also calls for a revamp of governance across Whitehall by carrying out an audit to ensure all government activities, policies, rules, and decision-making conform to the UK's net zero and Paris Agreement obligations. That should include revising the Treasury's so-called 'green book' guide to state spending to embed net zero into all decisions taken by the department.

It comes as the Treasury embarks on its hotly-anticipated net zero review looking at the costs of decarbonising the economy over the coming three decades.

Today's report also suggests targets should be set in law to curb the UK's global contribution to emissions and environmental damage, in order to take account of the impact of goods and services imported to and exported from the country. There have long been concerns that while domestic emissions have rapidly fallen over the past 30 years, CO2 associated with goods and products imported to the UK are falling at a much slower rate, meaning the country's 'carbon footprint' remains significant.

Shadow Business Secretary Ed Miliband - who acted as a co-chair of the Commission until he stepped down to join Labour's frontbench team - gave his backing to today's findings, arguing that a green recovery "is essential for jobs, tackling the climate crisis, and improving quality of life".

"This is the way we can build back better and create a fairer economy and society," he said. "There is real urgency for the government to respond and rise to this moment."

The report - which comes on the same day as the European Commission is set to publish details of its long-awaited climate focused economic recovery plan - joins a growing library of studies, letters, and declarations from politicians, businesses, academics, and campaigners calling on governments to prioritise climate action in their economic stimulus packages. The early indications are that many governments around the world, including in the UK, are welcoming such interventions. The big question now is will they act on them?

Research: 'Substantial quantities' of microplastics from tyres contaminating rivers and oceans

Research: 'Substantial quantities' of microplastics from tyres contaminating rivers and oceans

University of Plymouth-led study notes that microplastics shed from vehicle tyres are putting millions of square metres of UK waters at risk of contamination.

Vehicle tyres have been confirmed as a leading source of microplastic pollution in the ocean and rivers, according to scientists.

Government-funded research published today warns that roughly 100 million square metres of the UK's river network, and more than 50 million square metres of estuarine and coastal waters, could be contaminated by tiny plastic particles shed from tyres.

Plastic particles from tyres are a "significant and previously largely unrecorded" source of marine microplastics, according to the researchers, who warn pollution from tyres is being transported into waterways by air or by rainwater into sewers and rivers.

"Scientists have long suspected that tyre debris is posing a hidden threat to the marine environment. However, there have been few studies measuring abundance in aquatic environments," said lead author, and head of the International Marine Litter Research, Professor Richard Thompson. "Now we have a clearer indication on quantities we need to gain a better understanding on transport in the environment and the potential impacts on marine life."

Prior research has revealed that microplastics, or plastic particles less than 5mm long, are a serious threat to marine ecosystems, including seabirds, turtles, fish and whales. They are also ingested by humans when they consume fish and shellfish.

Professor Thompson said today that his team would now work with industry and policy makers to identify solutions that could spur changes in behaviour, product design, and waste management to curb microplastics' damage to the environment. Previous microplastic research from his team at the University of Plymouth resulted in the UK's ban on microbeads in personal care products in 2018.

However, Thompson noted that scientists still had a lot more to learn about microplastic pollution from tyres. "There are still many unknowns, and compared to other forms of microplastics we know relatively little about tyre wear particles," he said. "So it is important to continue to take steps to reduce emissions of better understood sources like fibres from textiles and the fragmentation of larger items."

The study, which was funded by the Department of Environment, Food and Rural Affairs, also contains new information about how tiny particles from synthetic fibres from clothing and marine gear are reaching the world's ocean.

Among a series of recommendations to policymakers, it argues that fabric design changes should be prioritised over filters for washing machines, pointing to a recent study that showed that normal wear and tear from clothes is as large a source of pollution as laundering.

Environment minister Rebecca Pow said today's findings would help the government identify ways to reduce marine pollution.

"Reducing plastic pollution in the ocean is one of the greatest environmental challenges that we face," she said. "This study will help us face that challenge by identifying areas for future research, such as changes to roadside drainage and textile design. The UK is at the forefront of a global fight against the scourge of plastics. In addition to the pioneering ban on microbeads and the 5p plastic bag charge, plans are also in place to end the sale of plastic straws, stirrers and plastic-stemmed cotton buds."

Today's study was led by the University of Plymouth and also involved researchers from Newcastle University, King's College London, and Eunomia Research & Consulting Limited.

COP26 Glasgow Climate Summit poised for full year delay

COP26 Glasgow Climate Summit poised for full year delay

UN widely expected to approve UK government request for crucial Summit to be rescheduled for November 2021

The UK government has written to the UN's climate change secretariat to request a full year delay to the postponed COP26 Climate Summit in Glasgow, warning that the spread of the coronavirus pandemic around the world could make an earlier date unviable.

The UNFCCC is set to consider the request in the coming days and is widely expected to rubberstamp the proposed news dates, which would see the rescheduled global summit run from November 1st to 12th, 2021.  

There had been speculation the British and Italian co-hosts for the Summit could look to reschedule the high profile meeting for Spring next year. But the progress of the coronavirus pandemic around the world, coupled with concerns over a second winter outbreak in countries already hit by the virus, has led officials to conclude a full year delay would reduce the risk of a second postponement.

"Given the uneven spread of COVID 19, this date would present the lowest risk of further postponement, andthe best chance of delivering an inclusive and ambitious COP," the letter states.

The original delay, which was confirmed at the start of April, was prompted by fears it would be impossible for all delegations to attend if some countries continued to have lockdown measures in place this autumn. These concerns were further amplified by significant logistical challenges, including the fact the planned conference venue in Glasgow has been converted into a temporary field hospital.

The UK government and other stakeholders at the talks now fear hosting the Summit in early 2021 could result in it facing similar disruption, which could threaten both the health of delegates and the ability to run a fully inclusive Summit with all countries represented.

Proposals for a virtualised Summit have been considered, but while country delegations have continued to hold talks online many observers fear the talks would struggle to deliver the landmark agreement that governments are seeking without a predominantly physical meeting.

Moreover, the diplomatic groundwork and preliminary meetings for the Summit, which are crucial for ensuring a final agreement can be reached, have been disrupted by the pandemic. As such officials now believe it would be beneficial to have more time available to reschedule meetings next year and step up efforts to rebuild political momentum ahead of the talks.

The Guardian also reported this morning that the UN is keen to see the Biodiversity COP in China, which has also been postponed from its original autumn 2020 date, precede COP26. The Chinese government is currently understood to be exploring new dates for the Summit in the first half of 2021.

The letter to the UNFCCC sets out a new timetable for the run up to COP26, highlighting how upcoming international meetings including G7 and G20 summits, the UN General Assembly this autumn, and a major Climate Adaptation Summit early next year can all be used to drive progress ahead of the Glasgow Summit.

It also stresses that pressure will continue to be applied to governments to ensure they deliver promised upgrades to national climate action plans and funding commitments made under the Paris Agreement.

"Postponement of COP26 does not mean postponement of climate action," the letter states. "We must scale up action to respond to the climate emergency. It is vital that all Parties increase ambition by submitting enhanced Nationally Determined Contributions (NDCs) and long-term strategies that chart a path to net zero; that support is enhanced and the $100bn climate finance goal is met; and through scaling up action and support for adaptation."

Observers remain concerned that a long delay could minimise the ability of the COP26 Summit to shape economic recovery plans and ensure governments continue to prioritise climate action as they seek to rebuild their economies.

But at the same time there is a recognition that with many governments already promising to deliver green recovery packages, a full year delay provides more time to encourage countries to come forward with ambitious net zero emissions strategies. The EU is today expected to unveil its economic recovery plans with the bloc's Green Deal strategy set to feature heavily. Meanwhile, China is similarly poised to unveil sweeping stimulus plans that will provide crucial insight into the government's commitment to climate action in the wake of the coronavirus crisis.

Diplomats remain hopeful that strong new decarbonisation pledges and investment plans from major economies will ramp up pressure on other governments to come forward with more credible national climate action plans.

The proposed new dates would also ensure governments around the world have clarity over the direction of US climate policy following this autumn's election, with US voters offered a straight choice between President Trump's plan to quit the Paris Agreement and Joe Biden's pledge to re-enter the Treaty and deliver a new net zero emissions strategy for the world's biggest economy.

Writing on Twitter, Nick Molho of the Aldersgate Group, welcomed the "sensible" proposal for a full year delay to the Summit.

"Given the health context, new proposed COP26 dates for Nov 2021 are sensible," he said. "To maximise chances of success, UK Gov must use the time to plan an effective diplomatic engagement campaign + lead by example by having a climate friendly recovery plan & clear net zero strategy."

He added that the government must now use the extra year of preparation time to undertake "targeted diplomatic engagement on thorny negotiation issues (e.g. financial support to vulnerable states) and [deliver] an ambitious low carbon recovery plan for UK economy".

The Cabinet Office was considering a request for comment at the time of going to press.

New guidance to help investors tackle physical climate risks

New guidance to help investors tackle physical climate risks

Institutional Investors Group on Climate Change offers members detailed advice on how to integrate climate risks and opportunities into investment processes

In the same week as the boss of one of the UK's top energy companies warned the economic impact from climate change could prove to be worse than that from coronavirus, a group of top investors has set out new guidance for how investment firms can manage escalating climate risks.

The Institutional Investors Group on Climate Change (IIGCC) has today released two new reports that set out how investors and asset managers can integrate the risks and opportunities presented by the physical impacts of climate change into their investment processes.

The reports - which have been developed with specialist consultants Acclimatise and Chronos Sustainability, and support of the Universities Superannuation Scheme - draw on contributions from a number of leading investors, many of whom have stepped up climate risk management efforts in recent years.

The IIGCC said the reports aim to build on growing investor engagement with the systemic risks presented to investment portfolios presented by climate change and the transition towards cleaner technologies and infrastructure.

The guidance highlights how research from Cambridge University shows an additional $100bn of global costs linked to extreme weather events - such as floods, heatwaves and droughts - can be expected through to 2040 alone.

It also draws on an academic study cited by investment giant Schroders among others, which uses a "conservative" projection to suggest the global economy would face estimated losses in income of over $9.5tr a year with 3C of warming, rising to over $23tr at 4C of warming.

"The ripple effect of physical impacts of climate change already with us is also clear," IIGCC said. "The high-profile bankruptcy of US utility PG&E - directly linked to the worst wildfires in California's history - exemplifies the knock-on impacts of a changing climate, which companies and investors can expect to become more common."

The new guidance aims to help investors better understand the investment implications that result from the physical impacts of climate change; take practical steps to identify, assess and manage climate-related physical risks across their portfolios; identify ways to invest in solutions that support greater resilience to climate change and protect existing investments; and draw on additional available tools and data sources to identify and assess specific risks, and opportunities, across different asset classes.

"Investors have no time to lose in understanding and acting on exposure to the physical risks of climate change," said Stephanie Pfeifer, CEO at IIGCC. "The impacts of the climate crisis are already being felt and set to become far more severe. A focus on resilience can help protect portfolios and strengthen returns, while enabling communities and the economy as a whole to better adapt to climate change."

The reports also highlight a compelling business case for enhancing the climate resilience of portfolios. They stress how adaptation-related investments can minimise volatility and the risk of losses associated with escalating climate impacts.

"Such an approach may also offer attractive rates of return and high benefit to cost ratios," the IIGCC notes. "Research from the Global Commission on Adaptation has shown that investing $1.8tr globally over the next decade across five types of investment project - covering infrastructure to crop production - could generate $7.1tr in total net benefits."

John Firth, CEO at Acclimatise, said it "pays to be prepared". "The investors that can act now to both manage physical climate risks and grasp the opportunities to invest in resilience stand to be in the most secure position in the long-term," he advised. "This guidance acts as a first step to achieving this."

The reports come just a day after the CEO of energy giant SSE, Alistair Phillips-Davies, warned a failure to tackle escalating climate risks could eventually have a greater economic impact than coronavirus.

SSE has this week written to British Prime Minister Boris Johnson setting out a "greenprint", which the company argues should shape the UK's economic recovery plans.

"Although not as immediately felt as those from coronavirus, the impacts from a failure to deal with climate change could be even greater," Phillips-Davies told the BBC. "That's why delivering on the UK's net zero emissions target by 2050, and 2045 in Scotland, is as important as ever."

SSE's plan sets out 15 policy proposals designed to deliver "extensive and efficient" electric vehicle charging infrastructure by 2025, build a net zero power sector by 2040, install 40GW offshore wind capacity by 2030 and targeting at least 75GW by 2050, upgrade UK buildings, and deliver new carbon capture and hydrogen industrial clusters.

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