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California joins CCRI to advance the inclusion of climate risk standards into investment decisions

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Recognizing that climate change poses not only a clear and immediate environmental risk but also a financial risk to long-term investment stability, Governor Gavin Newsom has announced that the state of California has joined the public-private Coalition for Climate Resilient Investment (CCRI).

A public-private coalition of institutional investors, banks, insurers, rating agencies and governments, representing over US$10 trillion in assets, CCRI was launched at the UN Climate Action Summit last year to form a cohesive fiscal understanding of climate risk for use by investors. This World Economic Forum-supported coalition was created to produce solutions to facilitate the integration of climate risk into investment policy and will enable California to advance the inclusion of climate risk standards into investment decisions that can mitigate the impacts of climate change.

Wild Fire Natural Disaster, San Fransico | September 09, 2020

The wildfires across California and other Western states have illustrated the threat of asset damage, operational disruption and human suffering from physical climate risks and disasters that continue to escalate in 2020. An extreme summer heatwave, compounded by the pandemic, intensified the scale and impact on critical infrastructure, including power and water supplies. In response to the rising frequency of such cascading events, the integration of physical climate resilience into mainstream infrastructure investment is the CCRI’s core goal.

“With both globally recognized already for environmental leadership, we welcome the state of California and Governor Newsom to the Coalition. We look forward to working together in order to help deploy more efficiently the flow of funds for investment in infrastructure projects, enabling a transition to a more climate-resilient, low-carbon, sustainable economy.”
John Haley, Willis Towers Watson CEO and CCRI Chair

In addition to the state of California joining CCRI, Governor Newsom has launched the California Climate Investment Framework, which integrates the climate risk strategies of the state’s three largest pension funds, worth US$700 billion in investment assets, into a state-wide approach to sustainable investment going forward.

“California is putting our money where our values are. With this new framework, we’re leveraging our state’s investment power to reduce financial risk while capturing the enormous opportunity and innovation offered by the transition to a clean economy.”
Governor Gavin Newsom

Since launching last year with 35 institutions and US$5 trillion in assets under management, CCRI has quickly grown to include 58 members, with over US$10 trillion in assets. During this period, CCRI members have been working collaboratively to develop risk-informed cashflow modelling practices for investors and infrastructure prioritisation tools for governments to help focus resources where they are most needed.

About the Coalition for Climate
Resilient Investment

A United Nations Climate Action Summit (UNCAS) and COP26 flagship initiative, The Coalition for Climate Resilient Investment (CCRI) represents the commitment of the global private financial industry, in partnership with key private and public institutions, to foster the more efficient integration of physical climate risks (PCRs) in investment decision-making.

CCRI aims to create a more resilient global financial industry in which key incentive structures foster an accurate pricing of physical climate risks (PCRs) in investment decision-making, resulting in more resilient economies and communities across the world.

The Coalition brings together private companies, governments and inter-governmental bodies, including many of the world’s leading financial businesses and asset managers that collectively manage more than US$20 trillion in assets.