Muni Bond Issuers Urged to Improve Climate Disclosures, White House Moves to Gut NOAA, Spatial Finance Startup Acquired, and More

Event Announcement

Improve Climate Disclosures, Muni Bond Issuers Warned

Issuers in the US$4trn municipal bond market should include climate resilience plans in their public reporting if they want to maintain their supply of investor capital, sustainability group Ceres has said.

In a new report, the nonprofit warns that good climate risk disclosure by public entities could become “the price of admission” for capital market access. While municipal bonds have historically been viewed as safe bets, escalating extreme weather risks are injecting “uncertainty” into the market, Ceres explains. For example, in January, credit rating agency S&P Global downgraded bonds issued by the Los Angeles Department of Water and Power because of pressures brought about by the region’s devastating wildfires.

“State and local governments are on the front lines of climate change, but current disclosure of these risks … remains inconsistent and inadequate,” said Steven Rothstein, Managing Director of the Ceres Accelerator for Sustainable Capital Markets. “As extreme weather events threaten infrastructure, property values, and government revenues, climate disclosure is an opportunity for municipal, county, and state governments to be better prepared to meet these risks.”

Ceres recommends that cities, local governments, and other public organizations issuing municipal debt work closely with bond counsels — who represent investors — to develop transparent disclosures that describe the climate risks that could impact their ability to repay creditors. These disclosures should also explain current and future actions taken to mitigate climate risks, including adaptation and resilience investments. Ceres adds that public issuers with over US$1bn in outstanding debt should produce standalone climate reports that align with the Task Force on Climate-related Financial Disclosures (TCFD) framework, outlining their climate governance, strategy, risk management, and metrics and targets.

The group also urges state and federal policymakers to offer “stronger guidance, data sets, and training resources” to enhance municipal bond issuers’ disclosures.

In Brief

Climate-vulnerable nations aren’t receiving the most adaptation finance from the World Bank, a new analysis from the Center for Global Development shows. Those countries that have high vulnerability and low adaptive capacity — including the V7 group of most vulnerable nations — get proportionately less adaptation funding per capita relative to those with higher adaptive capacity. While adaptation finance for such countries is increasing, especially for climate-resilient infrastructure, support for climate-resilient agriculture remains low. Indeed, just 9% of World Bank adaptation finance for the V7 is for agriculture, despite this sector making up a quarter of the group’s GDP on average. The Center for Global Development calls for more resources to be allocated to the World Bank International Development Association (IDA), which disburses finance to the poorest countries, better project preparation support, and a strategic pivot toward resilience in fragile, vulnerable states. (Center for Global Development)

The US Office of the Comptroller of the Currency (OCC) has withdrawn from a joint regulatory effort to guide banks on managing climate-related financial risks. In a statement, Acting Comptroller Rodney Hood said the principles “are overly burdensome and duplicative” and claimed that existing OCC risk management expectations already encompass climate-related threats like severe weather and natural disasters. Separately, the OCC Chief Climate Risk Officer, Yue (Nina) Chen, exited her role at the agency in March. (Office of the Comptroller of the Currency)

The UK Pensions Regulator (TPR) has told small defined contribution (DC) pension schemes that don’t improve their handling of climate risk to consider merging with larger entities. A survey published by TPR shows that trustees at larger schemes are far more likely to integrate climate risk into investment governance, while many small schemes lack the expertise or resources to do so. Roughly 17% of DC schemes had dedicated time or resources to considering climate risk overall, but this share rose to 92% for large schemes and dropped to just 25% for small schemes and 4% for micro schemes. To protect retirement savers, TPR is ramping up scrutiny of climate risk management by pension schemes, urging trustees to upskill and explore joining better-resourced funds if they can’t meet expectations. (The Pensions Regulator)

JP Morgan Asset Management (JPAM) has closed a US$1.5bn climate and nature fund leveraging the expertise of Campbell Global, a specialist timberland investment manager acquired by JPAM in 2021. The fund invests in sustainably managed timberland that supports both carbon sequestration and timber production. Its current holdings span 212,000 sustainably certified acres in the US, managed to deliver both ecological and financial value. (JP Morgan Asset Management)

White House Moves to Gut NOAA Climate Research

The Trump administration is taking steps to eliminate the climate research arm of the National Oceanic and Atmospheric Administration (NOAA), according to a draft budget proposal.

The move is part of a wider plan to slash the agency’s funding by around US$1.67bn, roughly 27% of its current level, according to Reuters. If they go ahead, the cuts would likely hobble America’s ability to monitor and predict extreme weather events and undermine states’ and communities’ efforts to promote adaptation and resilience.

Climate advocates criticized the plan. “Cutting federal climate research won’t eliminate the threats from intense heat waves, unprecedented hurricanes, or devastating flooding — it will just make our nation far less able to prepare for them,” said Ticora Jones, Chief Science Officer at the Natural Resources Defense Council (NRDC). “This is like turning off your headlights while driving at night on a winding road. Not knowing the dangers ahead doesn’t mean they don’t exist.” A spokesperson for the White House Office of Management and Budget told Reuters that no final funding decisions had been made.

The budget proposal eyes cuts of US$485mn to the Office of Oceanic and Atmospheric Research (OAR), home to NOAA’s climate research efforts. “At this funding level, OAR is eliminated as a line office,” the draft states. It would also close down the agency’s climate, weather, and ocean labs and cooperative institutes. There are 10 NOAA research labs across the country, including the Physical Sciences Laboratory in Colorado, which works on advancing the prediction of water availability and extremes, and the National Severe Storms Laboratory in Oklahoma, which focuses on improving the lead time and accuracy of severe weather warnings and forecasts.

The White House plan would also gut NOAA’s climate research grants program, which awards around US$70mn a year to scientists, and scrap the collection of regional climate data and information.

Congress is ultimately responsible for the budgets of federal agencies, meaning the planned cuts to NOAA may not go forward as the White House has outlined if enough lawmakers stand opposed.

Former agency head Rick Spinard wrote on Sunday that if the cuts went ahead, Americans would feel the impacts in short order. “Your weather and climate forecast …will begin to degrade immediately. The cost of goods will rise and commercial shippers will have to spend more money to transport their products safely and efficiently. Your insurance rates will rise as insurers can no longer effectively manage the risks of losses,” he claimed.

The Reinsurance Association of America has also written in defense of NOAA, saying the agency’s work with the industry helps “protect American lives and property before and after a natural hazard event.”

In Brief

The Trump administration is cutting funding for the US Global Change Research Program (UGCRP), a move which could effectively halt work on the federal government’s quadrennial National Climate Assessment (NCA). Officials say NASA cancelled a contract with ICF International, a consultancy firm charged with coordinating the UGCRP and multiple federal agencies that draft the report. The cancellation jeopardizes the next NCA, due in 2027. The most recent edition, released in 2023, found that “current adaptation efforts and investments are insufficient to reduce today’s climate-related risks and keep pace with future changes in the climate.” (Politico, Science) 

President Trump issued a sweeping executive order (EO) last Tuesday directing the Department of Justice to challenge state-level ‘polluters pay’ laws, which force fossil fuel firms to finance adaptation and resilience measures. New York and Vermont are among the states to have either passed or initiated such legislation, which the Trump EO calls “extortion.” Within 60 days of the order, Attorney General Pam Bondi is directed to submit a report to the president on her efforts to stop these laws and recommend any legislative actions needed to halt their enforcement. (The White House)

Twelve senators in the northeast have called on President Trump to abandon reported plans to eliminate the Federal Emergency Management Agency (FEMA) Region 1 office, which serves New England. The senators warn that shrinking the number of regional offices would weaken disaster response and recovery by removing personnel with deep local knowledge. (Senator Peter Welch)

United Nations experts are urging Switzerland and other European nations to accelerate climate adaptation and mitigation action in line with a 2024 European Court of Human Rights ruling that found Switzerland’s inadequate climate policies violated human rights. That ruling concerned a case brought by a group of individuals and the Verein Klimaseniorinnen Schweiz, a climate advocacy organization working on behalf of more than 2,000 women of 64 years and older. The court made plain that states must do their fair share to cut emissions and protect vulnerable groups, like older women, from climate-related harms. The UN experts say that the Committee of Ministers of the Council of Europe, overseeing implementation of the decision, require more information on adaptation progress, and invited them to draw on UN guidance to “to ensure that adaptation measures do not reduce the vulnerability of one group at the expense of others, future generations or the environment.” (United Nations Office of the High Commissioner on Human Rights)

Earth Finance Acquires Google-Backed Spatial Finance Startup

Geospatial tech startup Climate Engine has been acquired by Earth Finance, a sustainability strategy and finance consultancy. The tie-up is intended to enhance Earth Finance’s ability to provide climate-related financial risk management data and services to its clients.

Climate Engine specializes in so-called “spatial finance” (SpatiaFi) — the use of satellite and remote sensor data for operational and financial resilience. Their insights enable companies to estimate, and adapt to, material extreme weather and climate shocks. The company was founded in 2014 with a grant from Google’s Geo For Good, and has an ongoing collaboration with Google Cloud.

"The integration of SpatiaFi into the Earth Finance platform will help our clients better understand the complex interconnections between climate, nature, and economic activity so we can develop go-forward strategies that minimize risk and maximize business and financial benefits," said Garrett Kephart, Co-Founder and CEO of Earth Finance.

On its website, Earth Finance says the acquisition will bolster its adaptation and resilience capabilities. The Seattle-based consultancy was founded in 2022 by Kephart, a climate policy veteran, together with Bryan Weeks, a former senior officer at Washington-based Russell Investments, and former Washington State Senator Reuven Carlyle. The company raised a US$14mn seed round in 2023. Last year, it acquired Denver-based global water consultant Water Foundry.

In Brief

Google Research has unveiled Geospatial Reasoning, a framework that combines generative AI with new geospatial foundation models to accelerate problem-solving in climate resilience, disaster response, and more. The framework leverages Gemini, Google’s large language model, allowing users to ask questions about geospatial data using natural language. This makes it easier for organizations confronting climate-related disasters and extreme weather events to perform real-time damage assessments and visualize risks. Early partners — including Airbus, Maxar, and Planet Labs — are testing Geospatial Reasoning to extract faster insights from satellite imagery and bolster climate adaptation capabilities. (Google Research)

Insurtech and consultancy CelsiusPro Group has raided the Disaster Risk Finance (DRF) unit of WTW to enhance its Climate Resilience Solutions team. The five new hires have joined Global Parametrics, an arm of the company focused on developing parametric risk transfer solutions. The new team brings expertise in public sector and humanitarian DRF, strengthening CelsiusPro’s offering of tech-enabled parametric solutions for underserved, climate-vulnerable regions. (CelsiusPro)

The Scottish city of Glasgow will house a new climate tech accelerator program, called ‘Powering the Future’, which will provide tailored support to 30 climate tech startups —helping them scale from concept to commercialisation. The program is backed by Sustainable Ventures, a climate startup ecosystem, with support from Barclays Eagle Labs and Glasgow City Innovation District. Powering the Future offers venture tools, expert mentorship, and investment access to overcome funding and infrastructure hurdles. (Sustainable Ventures)

RESEARCH

The growing void in the US homeowners insurance market: Who should bear the rising cost of climate change? (npj Climate Action)

A way to shield your portfolio from climate change (Chicago Booth Review)

Assessing physical climate risk in private markets: A technical guide (Principles for Responsible Investment)

Addressing debt distress in developing countries: A blueprint for debt-for-climate-resilience swaps (E3G)

When helping can hurt: How efforts to adapt to climate change can backfire for vulnerable populations (University of Colorado Boulder)

Thanks for reading!

Louie Woodall
Editor