The ESG Initiative at the Wharton School

Wharton Risk Center Annual Workshop

Climate Change and the Transition to a Carbon-free Economy: Managing Risks and Harnessing Opportunities

December 3, 2021

Climate change presents physical risks that may have a significant impact on the financial, housing, and insurance markets. Climate change also poses transition risks, as the economy shifts to carbon-free energy sources. Emerging markets in carbon credits and for new energy finance create new opportunities for firms to promote a smooth transition to a carbon-free economy. This conference featured panels on the intersection of climate change and financial markets and the financial system, the housing market, insurance markets, and emerging markets for renewable energy finance and carbon credits.

Panel 1: Climate Change, the Financial Sector, and Financial Regulation

This panel discusses the issue of climate risk as a financial risk. We will consider how firms in the private sector are both managing climate risk and harnessing opportunities and the roles that financial regulators in the United States and the EU are and ought to be playing to address climate change.

  • Kalin Anev Janse, CFO, European Stability Mechanism
  • Brian Lehman, W’02, Managing Director, Head of Green Economy Banking, JP Morgan Chase
  • Elizabeth Lewis, Managing Director and Deputy Head of ESG, Blackstone
  • Moderator: Sarah Light, Associate Professor of Legal Studies & Business Ethics, The Wharton School

Panel 2: Climate Change and Insurance Markets

As the planet warms, disaster insurance is going to become ever more critical in order to secure financial resilience in the face of escalating extreme events. Yet, these same trends also raise questions of continued affordability and availability of insurance. The insurance sector also has a role to play beyond adaptation in helping to support the decarbonization of the economy. Panelists discussed the impacts of climate on the industry and the multi-faceted roles the sector can play.

  • Francis Bouchard, Managing Director for Climate, MarshMcLellan, MMC Advantage
  • Robert Muir-Wood, Chief Research Officer, RMS
  • Isabelle Santenac, Global Insurance Leader, EY
  • Swenja Surminski, Deputy Director and Head of Adaptation Research, Grantham Research Institute on Climate Change and the Environment at the London School of Economics
  • Moderator: Carolyn Kousky, Executive Director, Wharton Risk Center

Keynote Address:

Marisa Drew, W’92

Chief Sustainability Officer & Global Head Sustainability Strategy, Advisory and Finance

Credit Suisse

Panel 3: Climate Change and U.S. Housing Markets

Climate change represents the fundamental existential threat to the $36 trillion U.S. housing market. This panel discussed to what extent mortgage and housing markets are incorporating information about climate risk, how investors in real estate and financial markets are influencing the path of adaptation and changing risk perceptions, and what tools policymakers have at their disposal to mitigate growing risks and help the most vulnerable communities.

  • David Burt, Founder & CEO, DeltaTerra Capital
  • Daryl Fairweather, Chief Economist, Redfin
  • Miyuki Hino, Assistant Professor of City and Regional Planning, University of North Carolina at Chapel Hill
  • Moderator: Ben Keys, Rowan Family Foundation Professor of Real Estate, The Wharton School

Panel 4: The Future of Carbon Markets

This panel focused on the EU Emissions Trading Scheme, the California cap-and-trade market, and the Regional Greenhouse Gas Initiative. Panelists discussed how well these markets are performing, what kinds of reforms might be needed, what investors believe about future carbon-allowance prices, and the lessons that these systems can learn from each other, among other topics.

  • Casey Dwyer, W ’17, Andurand Capital
  • Katie Dykes, Commissioner at the Connecticut Department of Energy and Environmental Protection
  • Alex Rau, Environmental Commodity Partners LP
  • Emily Wimberger, Rhodium Group
  • Moderator: Arthur van Benthem, Associate Professor of Business Economics and Public Policy, The Wharton School