May 18, 2016 / 4:50 PM / a year ago

Scientists, investors seek to identify financial risks of climate change

OSLO (Reuters) - A Norwegian group of climate scientists will form an alliance on Thursday with investors including BlackRock Inc and the World Bank to try to assess the financial risks of rising global temperatures.

The BlackRock sign is pictured in the Manhattan borough of New York, in this October 11, 2015 file photo. REUTERS/Eduardo Munoz/Files

The Center for International Climate and Environmental Research, Oslo (CICERO) said it wanted to help investors judge risks from global warming such as more heatwaves, floods, downpours, the extinction of animals and plants and rising seas.

The head of CICERO, Kristin Halvorsen, said the aim was to help investors and researchers to “understand each other more easily so that the financial sector can define climate risks”.

“We speak very different languages. Research and investment are two different worlds,” Halvorsen, a former Norwegian finance minister, told Reuters on Wednesday, noting that the financial sector’s main concern was the return on its investments.

Representatives of BlackRock, the world’s largest asset management company, World Bank Treasury, Swedish pension fund AP2, Nordic bank SEB and Norwegian bank DNB would be among those on an advisory board for the CICERO Climate Finance project, to be launched on Thursday.

The first meeting would work to define common projects. Some investors, for instance, are pulling out of companies that mine or generate power from coal, reckoning that reserves of coal will steadily lose value from a shift to cleaner energies.

And extreme events such as wildfires, heatwaves or floods can disrupt investments in infrastructure, ranging from road bridges to oil pipelines. But it is hard to assess risks for individual places.

“If extreme events become more frequent, what does that mean for infrastructure?” said Christa Clapp of CICERO, an expert in assessing the environmental quality of green bonds.

Ulrika Danielson, spokeswoman for AP2 which has about 300 billion Swedish crowns ($36.19 billion) under management, welcomed the plan to do more to unite research and investment.

“We look at climate change as a risk in our portfolio,” she said.

Halvorsen said interest from investors to learn about climate change had risen after 195 nations agreed a global deal in Paris last December to combat climate change, shifting the global economy from fossil fuels.

Reporting By Alister Doyle; Editing by Gareth Jones

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