Originally planned as a roundtable in conjunction with the Investor Summit on Climate Risk and Ceres 2020, the webinar addressed how open data initiatives and community-based open source models and tools can accelerate the transition to climate sustainability by improving integration of climate risk and opportunity factors into investing, banking and finance, financial sector supervision, corporate decisions, policymaking, etc.
The webinar was facilitated by Truman Semans, CEO of OS-Climate, and Hewson Baltzell, President of Helios Exchange and Co-Founder of MSCI ESG Research. Scott Nicholas, Linux Foundation Senior Director for Strategic Programs, and Gary Rahl, OS-Climate Board Member and Managing Director at Deloitte, joined the speakers for Q&A.
Speakers:
- Bob Litterman, Founder of Kepos Capital, Chair of the Commodity Futures Trading Commission Climate-Related Market Risk Subcommittee, and Vice Chair of WWF
- Rene Ramos, Risk Management Executive, JP Morgan Chase
Michael Tiemann, VP of Open Source Affairs at Red Hat/ IBM
Ton van Welie and Lisa Eichler, CEO and Co-Head of Climate and ESG Solutions at Ortec Finance - Julie Pullen, Director of Product for Jupiter Intelligence
Josh Green, Founder of S&P Global Panjiva - Ekaterina Gratcheva, Lead Financial Officer, Finance, Competitiveness and Innovation Global Practice at World Bank Group
- Ana Pinheiro Privette, Senior Program Manager with Amazon Sustainability
Discussion topics included:
- What are the gaps and barriers to providing decisionmakers the data and tools they need? Numerous new commercial data and analytics products have come to market. Why do we also need community-based open source data and analytics? Given the urgency of the need to accelerate climate transition, what can open source initiatives achieve that traditional competitive market development alone won’t address quickly enough?
- How do open data and community-based initiatives work? What are keys for success? What’s the business model? What can be learned from breakthroughs in multiple sectors?
- How do open source and commercial opportunity fit together? What’s the business case for data and technology providers to contribute? What’s the business case for users to contribute?
- What promising open data and open source modeling and analytics efforts for sustainable finance are currently underway? How can they succeed?
- Open source seems anathema to many investment professionals and data/analytics providers in the hypercompetitive financial services market. However, open collaboration between competing firms was crucial in the development of modern risk management. Open source software has been widely adopted in parts of the financial services sector (e.g., 100% of commercial banks in the Fortune Global 500 use RedHat solutions), and leaders across the industry are using it to advance innovation. What are the concerns? What are lessons from past and present open source initiatives?
- Asset owners and asset managers are besieged by “multi-stakeholder” climate initiatives. What’s different about community-based open source projects, such as those of the Linux Foundation?
VISION
OS-C is establishing an Open Source collaboration community to build a software platform that will dramatically boost global capital flows into climate change mitigation and resilience.
Through a non-profit, non-competitive organization, OS-C will aggregate the best available data, modeling, and computing and data science worldwide into an AI-enhanced physical-economic model that functions like an operating system, enabling powerful applications for climate-integrated investing in a world where the future will be very different from the past.
INVESTORS, COMPANIES, AND COMMUNITIES ARE OVEREXPOSED TO CLIMATE-RELATED RISK. . .
The OS-C technology platform will accelerate development of scenario-based predictive analytic tools and investment products that manage climate-related risk and finance climate solutions across every geography, sector, and asset class. The OS-C Open Source organization will enable alignment of the stakeholder community on priority data and modeling needs, focus shared resources on executing those priorities, and accelerate adoption.
. . .AND UNDEREXPOSED
TO CLIMATE-RELATED OPPORTUNITIES
GOAL
Our goal is to rapidly accelerate the shift of global investment away from relatively GHG-intensive and climate-vulnerable companies, technologies, and infrastructure into mitigation, resilience, and adaptation that is financially sustainable and high-impact — especially in developing countries — as well as to enable design of better policy that effectively engages capital markets in addressing climate change.
CLIMATE CHANGE & OUR RESPONSES CREATE
SECULAR TRENDS THAT IMPACT EVERY SECTOR,
ASSET CLASS, & GEOGRAPHY
PROBLEM
Can not rigorously quantify the impact of most climate-related factors on risk and return, aside from carbon, energy prices, and a few policy drivers – failing to capture dozens of key variables in technology, public and private policy, resources, consumer and B2B preferences, climate and weather, and the macroeconomy.
MOST ANALYTICS & STRATEGIES
FAIL TO INTEGRATE MANY KEY FACTORS
BEYOND ENERGY & CARBON —
TECHNOLOGY, POLICY, RESOURCES, CONSUMER PREFERENCE,
CLIMATE AND WEATHER, & MACROECONOMICS
Interviews with 120+ representatives of asset owners, asset managers, and investment managers confirm immediate and growing need for better tools, driven by TCFD, France’s Article 172, UNPRI, CERES, shareholder resolutions, etc.
Investors, companies, and governments need to be able to predict the way climate-related changes will interact and affect economies, industries, companies, and assets.
BUT THE COST OF DATA, MODELING, SOFTWARE DEVELOPMENT,
AND COMPUTING FOR THE TOOLS THE MARKET NEEDS
ARE TOO HIGH FOR ANY FIRM TO DO IT ALONE
Solution
Through Open Source governance, collaboration structures, and licensing, OS-C is developing an AI-enhanced platform to fully integrate climate risk and opportunity factors into investment decision-making and accelerate creation by 3rd Parties of superior investment vehicles.
OPEN SOURCE PHYSICAL-ECONOMIC MODELS
GLOBAL DATA COMPENDIUM & DATA COMMONS
SCENARIO-BASED PREDICTIVE ANALYTICS