Reporting by Mathew Carr
19-21 June, 2025 — Key example
Ground-breaking analysis by Howdens reveals that the European agriculture sector loses an average of €28 billion annually due to adverse weather, with losses projected to exceed €40 billion per year by 2050 under business-as-usual emissions scenarios.
These losses need to be built into future prices.
The future losses are so big because of government failure the past 35 years. Inaction matters.
Anthony Hobley on Linked In
Do you wonder why, despite the all the data many investment decisions are made as if climate change was not happening?
I have. This week in Sao Paolo, Brazil attending both the Sustainable Markets Initiative Brazil Event & Brazil Climate Investment Week I met many fellow travellers asking the same question.
It became clearer after discussing this conundrum with Brazils climate & nature finance community that in the absence of a forward price curve, for climate risk at the level of granularity required, the climate data we do have is often not investment decision relevant. Put another way its not translated into the one language relevant to such decision, dollars, real, euros, pounds etc.
Which is why with Brazil’s major reliance on the nature economy & natural assets the recent work by EIB & Howden for the EU to quantify the current & future cost of climate on the EU agriculture sector was of major interest. Because if you have an analytical model identifying climate costs for your sector now & in the future this creates a clear financial case for such investments.
… businesses do this all the time for a wide range of commodities & services e.g. power, oil, gas, coffee beans wheat, freight etc. Yet this work in Europe is a first of its kind. Such a model provides the framework to allow individual business, investors, countries, cities, towns & even individuals to properly price the cost of action & inaction when it comes to climate change.
The insurance sector has the capabilities to do this as Howden has demonstrated with the ground breaking study. Yet as we have previously articulated the current annual renewal model for insurance fails to incentivise the insurance sector to do this.
In the EU this model now makes it possible for individual companies & banks to price their climate exposure to specific agricultural commodities & geographical areas. Without knowing the climate cost now and how it is likely to increase businesses & investors are essentially operating blind when it comes to the costs of climate to their businesses and investments.
Looked at like this it is hardly surprising that many investment & asset allocation decisions are still being made as if climate data generated from TCFD, TNFD, ESG etc., do not exist and climate change is not happening. To quote a favourite TV series of mine from the 1970s – we have the technology, we have the capability…..so what is stopping us?
Lets build those forward climate risk price curves which are critical to make the investment case for mitigation, adaptation & resilience clear. We can build on the incredible momentum in Brazil towards COP30 Insights for nature restoration, nature based solutions & regenerative ag by building the forward climate price curve for Brazil’s natural assets & ag sector
See https://lnkd.in/eDNmjDqi
Rowan Douglas CBE Maria Netto Marcelo de Andrade Marcelo Behar Marcelo Furtado Tatiana Rosito (罗熙丹）
Hobley: centre