 Climate Change Committee's webinar on Climate Risk and Adaptation Financing a Resilient, Climate Resilient UK. We'll wait for up to a minute before we start in earnest, so thank you for joining us. So as I said, good morning and welcome to the Climate Change Committee's webinar on Financing a Climate Resilient UK. I am Ege Özdemiroğlu, I'm an Environmental Economist, a Director of EFTEC and a member of the Climate Change Committee on the Adaptation side, and it's in that capacity that I have the pleasure of welcoming you to this webinar. This is one of the deep dives the Committee has organised following the publication of Climate Change Risk Assessment in June this year, and it gives us the opportunity to contribute to the conversation and action. Today we're covering Financing a Climate Resilient UK. We will start by a short presentation by David Steyl, who's an economist at the Committee's Secretariat. David is going to take us through the key messages and coverage of the Climate Change Risk Assessment in this topic in terms of the need for adaptation, the need for investment in adaptation and returns to such investment. However, this topic is relatively new for the Committee, so we have gathered three panelists to help us unpick the what's wise and how's, and the panel consists of Helen Avery from the Green Finance Institute, an intermediary if you like in the marketplace, Sam Evans from Greater Manchester Combined Authority, a representation perhaps for the providers of investment opportunities, and Robert Hall from Federated Hermes, an investor but also playing roles as buyer, seller and intermediary. And perhaps we will find in this discussion that those roles are actually much more fluid than we think for everyone involved. After David's introduction we will have a panel discussion and we will have time to come back to your questions and commentary from yourselves if you're in the Zoom webinar. Do please use the Q&A function and you can also vote up the questions that you'd like asked. I will try and incorporate the questions as we go along in the panel discussion as well as the Q&A section at the end. So thank you for joining us and we now go over to David to give us his presentation. Thank you David. Thank you Ed Shea. So in this presentation I'm just going to provide a brief overview of some of the key parts of the CCC Adaptation Committee's advice to government as part of the third UK climate change risk assessment. Next slide please. So the assessment draws on a very broad evidence base made up by a technical report of seven thematic chapters. The findings from these chapters were distilled through several national summaries and fact sheets, drew on supporting research on valuation and projections of flood and water and many other dimensions and the committee gave its advice to government in the form of one advice report which synthesized all the other findings in the assessment. Next slide please. So one of the key findings of the assessment is that the level of urgency of adaptation has increased since 2017. Of the 61 risks and opportunities assessed as part of CCRA-3, a higher proportion relative to the previous assessment was scored as more action needed. The reasons for this change one was that the new evidence since 2017 suggested that the level of risk was higher than previously assessed and the second related reason is that as a result the gap between the level of risk and the level of current and planned adaptation has widened. Next slide please James. The committee identified eight high priority areas of further adaptation in the next two years. These were selected on the basis of the urgency of additional action. The gap in UK adaptation planning, the opportunity to integrate adaptation into forthcoming policy commitments and the need to avoid lock and import planning especially as we recover from the COVID-19 pandemic. The first four of these high priority areas relate to different aspects of the natural environment and then the other four include the collapse of supply chains and distribution networks, failure of the power system, increased exposure to heat in homes and other buildings and multiple risks to the UK from climate change impacts overseas. Next slide please James. In addition to assessing the risks and thinking about the benefits of adapting now, the committee also reviewed the evidence on the adaptation gap in the risk assessment and looked at how adaptation is being implemented. From that it drew out 10 principles for effective adaptation. Some of these principles are about good long-term planning such as integrating adaptation into other policies and planning for both two and four degree warming levels. Others are about making decisions that maximize benefits over costs including avoiding locking and also assessing and addressing inequalities and ensuring that any adaptation actions don't exacerbate existing inequalities. All of these principles need to sit within a vision for a well-adapted UK so that there's a clear aim and they need to be underpinned by proper funding, proper resources and key metrics. Next slide please James. Other key messages relating to the funding of adaptation included that there are several financial barriers to taking action, varying by sector. There are new initiatives and financial products which are helping to address some of these funding barriers but these need to be scaled up to meet the extent of action required. Green finance offers the potential to fund adaptation actions with wide range of benefits across climate change mitigation, adaptation and biodiversity protection and government has a primary role to play in ensuring that adaptation is integrated, adaptation and resilience are integrated into our financial system and existing economic plans. Next slide please James. We are building a better, we're missing a slide here but I'll just talk about it instead, so we're building a better and better understanding of the economic benefits of adaptation actions. The evidence from CCRA3 suggested that adaptation has strongly positive benefit to cost ratios. The benefits that we looked at included a mix of financial revenue generated, financial cost avoided and non-financial or non-market social benefits. Across the board acting early typically has much larger benefits than delaying and taking action after an impact has already occurred. That concludes my presentation so I'll now hand back to Etche. Thank you very much David. I think that what we want the panel to be is a conversation so you won't see any more slides during this webinar and I'm very pleased to say the panelists are willing to share their experiences but also tell the committee what they would like the committee to do as well as everyone else, all the other stakeholders in this field to contribute to. David's final point about a mix of returns was going to be my first question to the panel. We might have outside the finance investment field, we might have the perception that investors are only interested in financial returns and perhaps only interested in financial returns now or certain returns in future but the picture is not that for adaptation there's mixed returns as David listed. What's the interest? How are you going to cope with these mixed returns? How are you going to cope with complexity and uncertainty when you invest in adaptation? Perhaps we start with Robert on this one as working for an investment firm and other panelists will come in as they see fit. Okay thanks, thanks Etche and thanks David for that presentation that was really fascinating actually and I think this is a classic topic where trying to summarise in five minutes is extremely difficult. It's only a starter. Yeah I'll try and speak in bullet points and not be totally comprehensive otherwise there's no other chance to speak but in simple terms I think if we're talking about for instance kind of nature-based solutions I know that's particularly up the topic at the moment and we're interested in at least being a lot of work on. Investors are not quotes just interested in returns. Investors do however operate within I think firstly there's different types of investor so things that often are kind of I think less understood than they could be different types of investor with different hurdle ranks so different return requirements but all investors tend to operate within institutional and kind of quasi-legal parameters that restrict their choices and I think there's an entire kind of structural logic underneath quote-unquote private investment in particular things like fiduciary duty which often I think those on the other side of deals don't quite understand. I think there's an idea that there's a kind of discretionary choice going on with an investor about how can I maximize my return on this and if I don't get x I'm not interested. It's always a little bit more nuanced than that and with nature-based solutions that can increase climate resilience it's a particularly unique I think kind of emerging asset class. The nuance there lies in so is there a hurdle rate? Is there an established expectation of return? No so you're right HAA there's kind of these different rates of return different profiles with different kind of supernatural asset classes. Are investors willing to expect willing to accept a below market rate of return for investments in nature-based solutions? Yes but it depends on which market and how you're defining it so for instance you're looking at this as a I will I will stop here as I go down a rabbit hole but if you're looking at this as a kind of natural infrastructure or if instead you're looking at it as a kind of like an enterprise level kind of private equity view they come with different rates of return. There is no simparence to that but the quick answer is investors are not just driven by return in this space and I think those investors that are managing to make feasible direct investments into nature increasing climate resilience are able to do so and are able to make it feasible because they understand I think a couple of things. One the points that they were talking about this kind of ripple effect of indirect benefits, co-benefits and social impacts. I think where investors are able to quantify those tier one, tier two, tier three impacts and be able to value them that begins to suddenly some of the asset you're looking at has a different profile than if you're just looking at kind of a direct price or market realizable price. So I think quick answer is yes investors are willing to invest in nature probably for below what we think was a market rate of return but they are not willing to forego return. The nuance is in negotiating that middle ground and of course in understanding the risks it's underneath that. I'm sure we'll come on to the role of the state later and public funding and how you can use public finance to leverage and reduce scale in the jargon private investments into nature so I won't touch on that now but it's not black or white, it's feasible but it's always nuanced and it's particular to the investment, it's place specific and it's as the customer's different. That's a start for ten. Good to hear it's not black and white and a definite no or yes. Helen or Sam would you like to come back or add on to that? Helen I see you're off. Sure yeah I totally agree with Robert that every investor is different and I personally would like to see more sort of philanthropic funding coming in to take a slightly more impact investment type role of taking those low returns I think that's a gap that we have at the moment I'm not quite sure why that's not happening but I mean to the point it's really sort of a market imperfection isn't it that the benefits to society of some of these interventions just don't generate additional cash flows and therefore they're not captured in the financial turn and there was a report I think it's a couple of years old that looked at some of the business cases of private investment solicitation like 80% have provided benefits beyond the investors so how do we we capture that and those positive externalities aren't just you know the things we think about like social benefits health benefits and they're also you know technology spillovers sort of learning some of the learning that comes out of these projects is is really valuable and so I think it's you know totally agree with Rob there are some models that I'm sure we'll talk about especially when it comes to using public sector finance to de-risk some of these but there are models out there of private investment where they've managed to sort of capture a value of those positive externalities and there's one I'll just give you really briefly and then I'm sure Sam's got a lot of examples from Manchester but it's a really old one it was 2001 the government of Malaysia they developed this concept of a mixed use tunnel and allowed for traffic flow under normal circumstances and then acted as a stormwater diversion after heavy rains and that road was a toll road in part so that helped sort of pay for the sort of development of the tunnel in the first place so there's sort of nifty ways of sort of using positive externalities in more creative ways when you're structuring a private finance deal but I'm sure we'll talk about more later. Yes Sam thank you Helen. Yeah I think Robert and Helen have I think made some really good points there I think from a kind of local authority local government perspective we see different as Robert was saying different it's not black and white there's different types of investors with different drivers and different interests and as a local government I think we are trying to find a role in bringing those different investors together and recognizing some of that and as has been said I think the role of impact and philanthropic investment in buying those social impacts and those benefits that don't generate cash flow is particularly important and I think we'll come on to the role of government finance in reducing some of that risk but those are certainly the models that we are looking at within Greater Manchester of incentivizing and bringing in funding into adaptation is bringing those different parties around the table and having conversations about returns, benefits, impacts and how that can be made to work in a project, a program basis and I think there is we are seeing increased interest in those those sort of non-tangible, non-monetizable benefits within local areas and the appetite and particularly thinking about carbon for companies to invest in local projects so that have a local impact within their communities and valuing those wider benefits, the learning that Helen mentioned, the social benefits, educational benefits within the area as well and seeing those wider and the value of those wider benefits where they are operating. Excellent so I'm hearing that it's important to know who you're dealing with and it's the same isn't it when you're looking into a new market you think everyone is the same but there are different many different types of investors and how you're packaging a deal together and that kind of leads me to my next question who is then financing adaptation at the moment can you give us some examples how are they doing it why are they doing it it'll be good refreshing to hear the good examples we can return to the barriers after that. Can I can I very very cheeky and just come back on the last round of responses and then Peter if you'd like to segue into your answer it was just I think all the other answers helped to kind of clarify things and the point I was trying to make I think one of the interesting things about this area is sometimes your first question the suspicion of the role of private capital I think the innate suspicion actually is a bit is in itself a kind of cultural obstacle that ironically prevents capital and a bit of impact investing often the work I'm doing is attempting to establish feasibility of impact investment models and if you want to scale this up you cannot just rely on philanthropic funding if you want to go just one notch down the scale you're into impact even impact investing requires you know you can't be losing money so if you're actually on the fiduciary duty you can't be end up in a negative equity knowingly even if you're an impact investor so if we start from the point of an impact investor wanting to do good quote unquote often when we talk about we talk about the use of public funds let's say a local or authority level but it could be national it could be in any in any regional level you like it's it's it's this phase de-risking gets gets used a lot and it's an accurate phrase it's de-risking because it's providing some certainty of a kind of a realizable price or a realizable return but it makes it sound a little bit I think like it's kind of doing a favor of facilitating the the purely facilitating returns to private capital actually the way what's quite special about this asset class is that often it just involves you call it private capital and public capital but people are both sides of the deal sitting down together and attempting to value in in in kind of real life in real world impact real world terms to those numbers of tiers I described as what's the direct impact what's the indirect impact and one of the big things I think is quite interesting is it actually requires at the level of public authorities and I say this is somebody who used to do cost benefit analysis within public sector so I have some some sympathy a fundamental re-conceptualization of the use of public funds and a de-siloing of all these different the different kind of divisions within local authorities so you got your local health part and then you might have your other part and then everyone's dealing with a little different piece of experience of life and actually local authorities and the public purse can ultimately save on this avoided cost base that David save a lot of money but is it about private capital attempting to convince the public purse to facilitate massive returns to private capital by de-risking it's actually more accurate to say what we're looking to do is simply find a way to realize the real financial benefits of this activity that are simply not being priced at the moment because economics and economic theory and the way that you know two foreign officers with local authorities work is then simply not methodologically and instrumentally capable of actually valuing that and and on a net base is understanding the avoided cost at a place level not in a divisional level that's actually one of the key things that you could do to unlock that massive scaling but it's the innate suspicion of private capital I think in the first instance is combined with the methodological kind of siloing within local authorities that is kind of blocking this at the moment shall I segue into the actually answer your question but I'll do 30 seconds yes give us a good example where we can break those silos yeah well the you mentioned impact investing why are people why am I attempting to establish kind of a feasible model for this wise federated home is interested in this space well it's it's it's in honest it sounds tried but it's to have an impact so firstly to what extent we're aware of some of the obstacles so to what extent is it possible for a private investor to invest in nature such that they deliver in a way that I think public authority stakeholders want national trusts want wildlife trusts want the kind of this kind of decade old kind of community that has established under the nascent work to establish the UK's market and ecosystem services and that's covered as a very you know it's very wary of potential kind of a bad version of this market now we thought how can we how can we do the good version to what extent can we make that feasible and still generate a return or not end up in negative equity and that doesn't mean you have to end up sacrifice the fidelity of the ecosystem services so we do it for impact environmental impacts ecological impact specifically we're interested in when we talk about carbon sequestration I think again we're into this murky territory of the scale in the offset market but actually even if you it the approach we take is one based on if we take it with we say with climate science so what I'm actually looking at is I look at carbon budgets and no matter what scale carbon budget you're looking at there is carbon removals implied and obviously what the CCC is so everyone's very familiar with that but what I'm talking about isn't an offset strategy it's a carbon removals technology strategy and to what extent can private capital play a part in providing those carbon removals that are implied by the budget that's one of the key reasons so carbon sequestration is a driver again we're into the nuance of are you a cynical offset generator with no mind is it not is it linked in any way to a carbon budget or are you just trying to generate as many as possible or is it can you kind of describe and define what it is you're trying to do in the context of proper carbon budgets quantified the carbon removals are you trying to certify these products so that everyone could be aware of what you're doing is it black box are you looking through it so we can have a transparent impact product generating social impacts environmental impact carbon sequestration biodiversity net gain I would say environmental net gain whilst making the lower level of acceptable institutional return that's that's the quick summary thank you Robert Sam I'd like to come to you next because for an example because Rob mentioned local authorities public sector alert but also the importance of doing this kind of return analysis at a location specific level and that's where you work in do you have any examples of how you're tackling this challenge yes yeah and just just to come back on Robert's points previously I completely agree and we are you know within Greater Manchester trying to bring together different investors to have those sorts of conversations at a place that will break down some of those misunderstandings and perhaps barriers to to having those those conversations and suspicions and I do think that the way local authorities have been kind of forced to operate over the last 10 years or so hasn't helped that sort of siloization and government is the same in terms of its siloization of budgets for specific interventions without bringing bringing those together in terms of examples from Greater Manchester we're looking at some of the some of similar things to what and what Robert mentioned there so we have in the last six months set up a Greater Manchester environment fund and that is there is a kind of long-term strategy to start and be a vehicle that can start to bring in these different types of investment public philanthropic moving that shifting that dial towards impact and mainstream investment and growing the market for investment in the natural environment within Greater Manchester and providing a charitable vehicle that's able to to bring in those and those different sources of investment and direct them into the projects that we know are out there and that need but need funding and that's also bringing in capacity to help develop develop these projects and project development is maybe something that we talk about later but that's you know developing the project so that they are can be can be taken to investment and is real is a real challenging gap in this in this space and so we're developing particularly focusing on developing a model around capitalizing on biodiversity net gain which will obviously when it when it comes in and we're bringing it in sooner in Greater Manchester than nationally we'll start to create a market for nature recovery for habitat restoration and stacking that alongside alongside carbon offsetting our peatlands within Greater Manchester so we've got quite for an urban area expansive degraded peatlands where there's significant opportunities for habitat restoration for carbon sequestration and for those wider benefits that we talked about as well for education for water quality for flood risk reduction so we are over the next 12 months or so developing hopefully developing a model that then we can demonstrate that that works and hopefully scale that up to other parts of Greater Manchester and take that learning elsewhere so that's where we see particular opportunities for us around biodiversity net gain and carbon sequestration areas where those can be brought together and there's live work going on on the ground in parts of Salford and Wiganland to start that process. Thank you we will watch them. Helen do you have any examples to add? Yeah I think it's just worth pointing out that we really don't have much insight into private investment in adaptation actually just because you know some of it is part of other deals there's infrastructure that doesn't get accounted for there's not sort of disclosure transparency around adaptation as opposed to mitigation where we have got a lot more insights so I think we clearly need a lot more I'm not saying no I think there's loads I just it's just it's hard to get a grip on what is actually out there and there are some really interesting examples I think worth noting I always think stormwater retention credits as a market in the US has been really interesting the natural capital finance facility of EIB offered a loan to Athens to reduce its urban heat islands that was this interesting model though using public sector finance for a loan and I think in the UK the use of local climate bonds or community municipal investments is worth exploring around adaptation in particular and then the river wire that everyone's talking about at the moment in the UK I mean that model is an adaptation model really because it's reducing flood risk and there are organizations paying for those benefits that are allowing investors to come in and then the other one I heard about recently was parametric insurance so a cattle farmer in Africa and typically in a drought season his cattle may die and the insurance company has to pay up so the insurance company has developed technology where they track the moisture in the grassland and when it goes before it blows certain amount then they'll send the farmer water and feed so they can keep the cattle alive making the farmer much happier and the insurance company much happier it's a complete win-win so there are examples out there they're just few and far between and it'd be great to sort of just have more eyes on them and start capturing more of that so we can we can get it out there and have more thinking around it but I think there is not a shortage of smart people who are working to come up with some solutions if we can just sort of lift those up a bit more and obviously what we're looking for is scale in the end. Yes this sort of calculation of examples was something that I was also going to raise because I saw for example in the woodland carbon code in the UK you have a carbon registry of people who are using the code and buying offsets but there isn't that kind of a database of people investing in adaptation and presumably it could be possible to create such a database whilst respecting commercial confidentialities just to sort of spread spread the examples shared the love maybe it's something DFI and committee could talk to each other about setting up something like that there is a question related kind of related to in my mind anyway in the Q&A here is that obviously there is a target for mitigation there isn't a target for adaptation would having a target for adaptation however you might want to define it help motivate more investment into adaptation. Yeah we've been having those conversations within the CA just in the last week really and the focus that obviously the mayor setting a 2038 carbon target has had. I think it potentially would help but it is complicated and I think one of the benefits of action on adaptation is obviously all of those other multiple benefits that we were talking about and that makes talking about the natural environment quite complicated because because of those wider benefits not just for the innate value of nature but you know all of those environmental benefits of carbon flood risk management water quality and for you know educational amenity recreation and mental and physical health so it becomes setting a target for all you know because the projects potentially these projects will be tackling all of those to a degree it makes setting a target quite complicated and also potentially dilute some of the benefits for us of talking about all of those other benefits that adaptation action brings and so it's not an easy task just to set something like that because you do risk missing the kind of wider benefits and the wider picture. I mean I think it would be really helpful for obvious reasons because it starts sending the signal out that we need to sort of do more. I do have a bit concerned about the number of different targets out there and if they don't quite align then what does that mean and which one do we go with first? I'm just thinking if you have an adaptation target that might inspire MBS in one area and then you've got mitigation targets that don't match that with what we're going for and so I yes and no I think would be the answer from me. Robert. Yeah really interesting I think I agree with what both Helen and Summer said really I think on it sort of diluting some of the underlying pillars if you like actually compose it and targets relating to that I think that's definitely a risk I think sometimes I hate to say it but I think sometimes the phrase kind of climate resilience can be a bit vague and people don't really understand in definitive terms what we're describing. I'll try and give a tangible example as a way of just describing my own thinking there's some work going on there so I'm a member of the Yorkshire Climate Commission and in some of the thinking some of the thinking going on there is around or at least let me speak personally so that other commissioners don't get annoyed but my own idea in terms of trying to develop a financing platform or financing the just transition that would include mitigation and increase in resilience I tend to find that it's helpful to have one hard target in your head so I quite like net zero I mean I quite like net zero there's a kind of overarching framework underneath which you've got kind of I suppose I'd always I'd always link mitigation and resilience and adaptation I know again it's going to focus on all of this underneath these thematic kind of headlines if you like these phrases for targets it has to be specific I call them asset classes but specific targets and specific quantifiable kind of actions that you need to take so we haven't talked about the built environment today but the way I always think about this is kind of actually we're talking about resilience it's the kind of nexus between the natural environment and the built environment to a larger because a lot of the things we're talking about are about that within the built environment I'm kind of encapsulating kind of people's everyday lives the way that they experience place so that's really what we're talking about and so within that you can begin to define this actually helps from a kind of investment point of view you can begin to define specific areas like retrofit of housing or design of new build and we talked about heat islands all those kind of things relating to the built environment and then of course they interact with an FM schemes natural management schemes and other nature-based solutions one of the things that I tried to do a while ago is to try and the environment agency was doing a amazing bit of work on an FM scheme in Yorkshire and one of the things we're trying to do is to combine I think what you're chatting about is actually a natural capital account with a hydrological risk model and then in some way try and internalize that into a into a bit into a building's insurance model it didn't work in that particular context for interesting reasons to do with the insurance market which I won't go into but I think the point is is that actually when you're talking about investments into nature-based solutions for instance some of the issues around the fact that sometimes you can end up in a kind of negative equity space without public funding an alternative solution to that is blending okay a novel asset class where you will blend you create a security that is it wants a kind of a debt investment into nature-based solutions and let's say property retrofit you do on a place-based level so we're talking about place-based impact investing there is a way to invest in multiple different assets within a particular place all thematically linked and all interacting related to climate adaptation resilience and incidentally by the way that just tend to have an effect on the return so you can blend the return it becomes more attractive I won't go into the details of why because that's the secret source but that's my thoughts rambling on that question so perhaps what what I'm hearing from from you but maybe because that's what I think as well is that maybe adaptation is is not so easy to link to one target like net zero because adaptation is in every part of life in every sector in every every environment natural or or not but it is possible perhaps there's a suggestion in the in the q&a to actually think about the committee's recommendation that think about two and four degrees what do two and four degree worlds mean for your goals for your area of activity and how what do you need to do to adapt to a world worlds like that that could be an overarching message perhaps that sort of satisfies Helen's yes but and this kind of local local approaches we're trying to spread people's sort of scope of analysis we're not trying to narrow it down to one benefit there isn't an adaptation benefit there are many adaptation benefits perhaps you're nodding that's good although we don't all have to agree if we all agree all the time that wouldn't make a fun panel this panel I'd like to maybe go on to something more kind of difficult in the sense that we talked about uncertainty we talked about multiple benefits data etc so and it's still very small percentage even if we don't know how how much money is being invested in this we do know it's a very small percentage of all investment what's what are the key barriers you think that we need to identify sorry address as priority to move more investment into this area and how you would recommend to live again and I mean there are so many barriers and policy regulatory financial barriers information barriers technological barriers they've got loads at the moment so I think it's sort of going through them one by one and then working together to unbox them is is really what we need to do I do think you know the more we're aware of climate risk then the more you can start to answer these questions so it sort of starts with this how do you sort of build the demand where you just you push everyone understanding their climate risk more and I mean one of the if you think about some of the market imperfections are driving these barriers you've got not pricing in positive externalities the the other is that is this lack of data and this of asymmetry of information at the moment so you've got you know maybe the financial sector understands climate risk more than if you're a rural business or a farmer maybe you don't understand it there's a mismatch at the moment so that's something I think that needs to be addressed people understanding the risk of climate change on their own home and then there and then in the business and then I think the other is you know we just well there are two things this is just kind of barriers and then I think there are solutions that maybe will come on to them but you know the imperfection of financial markets are looking for short-term returns perhaps when these are long-term issues and I'd love to hear Rob's thoughts on that for sure so they're just a couple as a sort of starter for ten okay thank you no I all typically good points and I and I agree with the more endangered territory on the last one so I was speaking of personal that personal capacity so it's not looking at the question I think there are different there are different types of asset class and different asset classes have different temporal profiles so it depends which type of investor is appraising and a long-term investment we're mostly talking about unlisted markets private markets quote unquote and I do think that there is a tolerance for there is a tolerance for longer time horizons I think one of the main issues though is that if we're going to be absolutely in this space some of the time rises we're talking about a kind of a century so so it depends what you mean by long term so if you're saying long-term and you're thinking 10 20 years I'm thinking yeah that you know that that's it's plenty of capital that it would be if you're still going to consider for a century that is unusual I think that's when we get into the very technical space of you can you can facilitate the same effect contractually but I won't go into that kind of rabbit hole and unlisted are the main obstacles I think I think I really a really key one I would have obstacles to negative word I think a really really positive thing that could happen that would help to unlock this would be if I kind of had an image in my head of how would we would be what's the relationship we like to have with local stakeholders and how would we like to if we were if we were given free rein we said we want to be able to scale up these markets massively what we want to happen I do think they need to be that they'll always be kind of region region specific and you can pick the scale even the landscape scale or this local authority scale or it's kind of catchment scale there's different levels but there's some element of kind of you know it's not we're not talking about national strategy you're talking about region specific plans lots of work going on I think be led by various government agencies as well around kind of local recovery strategies but some kind of I'm imagining some kind of mapping of every local authority a kind of GIS mapping and then that'd be done with ecologists and relevant experts who would then be able to essentially create this kind of colour coded map for opportunities for investment into things like paintland or woodland or whatever it might be nfm schemes hydroxyl risk models all overlaid and then the bit that we're missing would be there'll be certain opportunities that would be realized quite quickly I think as a result of that assuming that there is again a kind of that the carbon markets quote unquote that the price of carbon actually goes up to where we all think it needs to be or at least where as I said before kind of integrated assessment modeling and climate science seems to assume it'll have to be which is you know much higher than it is today again definitely one of the missing pieces though there would be it would it would it would it would be need to sit down with together with the relevant local stakeholders and it will be local authorities and come to a view on how to price and value the benefits that is a key that's that's one of the key unlocking mechanisms if if I won't say all local authorities not about local authority I think also to sound like when my starting point I was trying to craft strategies and the things that we're looking into has very much been cognizant of the 10 years that local authority just had austerity and I think this is kind of I you know going to you don't want to be going to a local authority saying please can you pay us some money for a half defined nature based solution when you haven't got money to do very very basic service so very aware of that and so it's not about saying can you please facilitate x y and z but it's actually about can we can we sit down together and work out if you're actually saving money is the local can we save can can local authorities save money through through kind of minority financing a scale this kind of mitigation resilience work and I think the answer is probably yes it's just it requires that it's just a change of thinking it's just an ability to meaningfully believe in those kind of tier three tier four benefits um I think other other other things that are not obstacles but um I haven't completely right about about kind of the regulatory obstacles and these things that exist but I think um something that's interesting of late which I which again is a rabbit hole I won't take us right down but is carbon codes so we sponsor um we're we try to get involved as much kind of academic research as we can because we value in its own terms and I'm a bit of a sood anyway but um one of the things with carbon codes I think is that there's a good story which is they're multiplying rapidly and that's fantastic but one thing I have noticed and I think this is legitimate is that as these markets are beginning to kind of pick up when you mention the woodland carbon code actually there's a kind of a there's a moment of which I think some of these organizations that manage the carbon codes that have been historically quite small so they come into a lot of pressure activities are increasing massively and there's a concern that perhaps they are facilitating the wrong kind of activity and I think one of the potential obstacles would be the what we call the regulatory perimeter but kind of carbon codes confusing financial additionality with climate and not ecological additionality and more broadly you could just say the carbon codes kind of react reactionism I think from within driven by legitimate concern but done too quickly within these codes that actually determine outcomes over a talent and said like you know a century very very long period of time that's the kind of thing that could do it could seem very small like a very small technical detail that could fundamentally undermine the ability of capital to have some sort of certainty over the contractual certainty over these very very very long time period interesting actually you both mentioned thank you very much Rob you both mentioned about the availability of data and I'm sure that map idea that you put across is going to be someone's project PhD or or initiative soon if anyone's watching wants to do that I need some money to pay for it please do come and speak to me if you want to build a GIS at the whole excellent I think there are there are some models and that's another barrier that there is a lot of data in sitting in somewhere and there are a lot of these models but it's hard to to disseminate them and if you can't do this at the very UK level or global level can we do it locally Sam is that part of your barriers as well it is yeah I think I think Helen outlined some of those barriers those key barriers and as Robert was saying it's really about the capacity and a role a local role in bringing all of bringing all of that together to bringing people around the table to tackle those barriers the local areas role in setting you know setting the priorities understanding the the the landscape what is what is required where to tackle the the adaptation risks that need to be need to be mitigated to develop the projects to support the development of the projects that can that can do that to bring different partners together around the table and to understand their drivers and priorities across different organizations and data sharing is a key thing in that in understanding what drives them what drives different organizations and their priorities we find that you know all the organizations are operating to different you know different planning horizons different planning timescales and are developing plans to tackle adaptation but again two different timescales you've got water companies developing their drainage and wastewater water management plans to one time scale timescale will be developing a local nature recovery strategy next year in response to the environment bill coming at this from a from a slightly different perspective there's also you know river basin management plans the ea's environment agencies investment program more general infrastructure investment all happening at different time frame scales being driven by different priorities underpinned by different data and and the role of local areas in bringing those stakeholders around the table together to share that information to really understand priorities and drivers is absolutely crucial to doing that and as Robert was saying that understanding the real value of the different ecosystem services and why the benefits in a particular area and understanding the real value and starting to put a price on on those and so it's really about that that convening that capacity and those conversations that that bring those those interest groups together at the right scale to discuss and bring forward projects that are actually going to deliver on the ground so we are working on on on a natural environment agriculture field at least on the sort of principle of public money for public goods and but we're thinking about that in terms of kind of environmental public goods but perhaps i'm hearing bringing stakeholders together sharing information is a public good in itself and perhaps there is a room for investment not perhaps actually i think there's a strong strong gap for investment in that of public money thank you so much for for answering engaging my questions and i think we picked up some of the q and a's from from our participants i'd like to go to david actually because there are a couple of questions in the q and a that require his clarification from from ccc's messaging david thanks actually and yes thank you to everyone for their questions one of the questions we received was just asking to clarify what i meant by locking by locking i mean where decisions that are made now can create additional costs or irreversible change in the future so some particular examples of this would relate to assets with long lifetimes of sort of infrastructure and buildings where if we don't ensure those assets are resilient to the impacts of climate change and consistent with net zero goals then those costs are locked in effectively and then another question was on the focus on two and four degrees and if that meant the 1.5 degree target was gone and now the reason why we say two and four degrees is because that's what most of the historic climate impacts literature looks at and in fact because of the uncertainty in climate projections there's considerable overlap between 1.5 and two degrees so just to clarify knowing consistency there thank you thank you very much that's very important point to clarify um the i want to go to the first the most voted question in the q and a um i have to david denoun asks um and i think perhaps it comes to you sam at least first um in in finance and pensions the role of how our pensions invested there are also other questions they are asking we're talking about investing in adaptation but we're busy investing in things that actually make adaptation even a bigger challenge so start with pensions i know you're not a pension expert but what's the view from the local authority and robin hallen you can come in as well yeah um not not one of my sort of areas particularly of expertise but i i know the government has has you know brought in measures to ensure that that trustees are um legally required to assess and report on financial risk of climate change within there within their portfolio so i think it's at a national level that that these sorts of issues of of pension funds investment and the considerations that need to be brought to bear there are are that's the sort of right level for that there has been um a degree of divestment within greater Manchester although it is a you know it is along with the along with the airport one of the particularly difficult issues and that we have to you know that we have to we get criticised for and have to manage um and it is one about which there are sort of regular conversations going on about how that aligns with our with our with our 2038 target but also obviously of the the duties of the the pension fund to its members so not a uh a particularly straight answer but one that you know is a complicated issue one that is having live discussions and and with with leaders across across greater Manchester to to work through thank you Helen would you like to come in or Rob general in the general point of comparative investments if you like or or the pension point go on Helen i mean i'll just i mean rob will know more than me i'm a bit further away from pension funds but my sense is that um when tcfg is mandated then that will obviously help to although you know a lot of people are disclosing voluntarily what their risk is it doesn't mean that they will then change their investments unfortunately that's what we all hope it is tcfg it doesn't mean it's going to happen but disclosure can certainly help and then also on its heels um i think that that there is a lot of push i i know around deforestation free pension funds at the moment which i think we really need to be thinking about because it's i don't know if that my sense is no that the data that we have the projections of where we're heading in terms of warming um whether that takes account for carbon sinks remaining the same or whether it's taking into account a reduction in carbon signatures we're heading at the moment and that is my so that's what keeps me up at night i suppose as well so that deforestation i would like to see a lot more stricter uh rules around that with import portfolios but i'm a bit further away from it and then probably yes i'm a lot um yeah so as i sort of take things for granted on this i always explain to the audience so when i said an institutional investor we we manage pension fund that's mostly what we do is that we are and actually one of the nice things about one of the things that i think would be a good outcome on nature solutions that we were talking about today with the you have this virtuous circle where you have a place-based strategy and you have those actual local authority pension schemes investing in increasing the climate resilience penetration of those areas and generating a suitable level of return so when i'm talking about the kind of how to make it feasible it's how to make it feasible for pension funds exactly that um yeah i mean i think my own personal theory changes i think it's a really good question because i think if you want to change the world most quickly increasing the transparency or increasing people's awareness and salience of what is going on with their pension is probably uh you know part of a global revolution and creating a global and one world government for the fastest way to having some kind of change in the world i think there's lots of bits and pieces going on initiatives that go down to try and increase the kind of people you know give people more salience so the fact they have this allocation and the things that have been done with it i think that's a really good thing we do a lot of work on deforestation um very competent of that um as well as lots of other bits and pieces um so so i don't know if the question was specifically can pension funds be doing more i think pension funds are doing okay i mean i've got bias but i think actually you tend to find uh that local authority pension schemes and institution other institutional pension schemes i have to say um tend to be um very switched on actually about this and they're asking questions like Adam was saying about well can you what can you show me your scenario analysis for various different temperature outcomes and the implications there around requirements for investments into carbon six for instance um so i think i think actually they're the kind of end investors that are at the moment driving this alongside philanthropic thank you and i guess there's a question about the time frames um and i guess pension investments are interested in longer term time frames where you can the investment time frame can match more easily to climate projection time frames is that right the way i understand that so this is the world of what's called asset allocation and how this is determined and how pension schemes calculate where and what they allocate their capital to and for how long is extremely complicated but it has i can i guess a simple single measure which is the liability that the pension scheme has but but in broader terms yes they can invest for for longer quote unquote time frames i was actually thinking as sam was speaking that maybe instead of attempts to go through everyone's individual time frame and see how they aren't aligned one of the things we're already talking about a kind of a market for nature in terms of the underlying asset classes so i hesitate to add another market but one of the ways you could simply to sort of get round this this is you could imagine grand Manchester or anyone else sorry to pick on your other time so i'm going to grand Manchester having its own essentially a kind of a place specific platform we've got a platform but it would basically be a secondary market trading units of each of the underlying and that means it doesn't matter if the water company had a different timeline someone else because it just generates liquidity and people can move it and out of those units and each one representing basically a token or a credit or a portion of those investments just an idea sure sam's building one of those in his spare time it's a part of your day job no so i'm not spare time um but yes i think there is there is a link there to kind of natural capital accounting that you mentioned rob in that understanding what you have what assets you have that anyone can invest in and what are those assets doing for you and for everybody else and how is that benefit provision going to change under different climate futures um perhaps it it's it's easier to do when we just concentrate on what we're investing in rather than trying to please everyone and please everyone satisfy everyone's need for certainty or evidence um you can't please anyone everyone all the time right is that whatever the phrase um cool okay we're we're very close to the end um i hope we picked up some of the questions there were a lot of very interesting questions um we couldn't have covered all of them in one hour but it seems it's a it's a lively and interesting discussion and i'm sure the committee would continue want to continue to engage in this topic as much as we can um i want to close with um one final question to each one of our panelists and david if you want to come in as well um and robert you mentioned that climate resilient uk may not be a clear picture for everybody or it might mean different things to different people but whatever it means to you um what would be your priority investment um what would you invest as a priority um to achieve a climate resilient uk good question very unfair question okay purely personal and this is my own bias i suppose as a as a dalesman but um i would increasing uh increasing significantly by by uh you know orders of magnitude the um what the quantity of proper extensive green space so kind of like a kind of a almost like a national park style scale green space and the integration of that with with uh urban development so the the ideal kind of green village if you like i think integrating integrating nature with our urban environment as quickly as possible is a world that i would very much like to live in sounds good um not sure i think for me yeah um equitable access across different communities to quality sufficient green space that is also um reducing their exposure to to climate risks it's it's reducing their exposure to flooding into heat whilst also providing them with with spaces for their you know physical mental health and enjoyment thank you sam that's also sounds great halloween yeah i like i like sam's can i just go with sam's and but as a bit of a left field i suppose i would invest in um the data and education piece i just don't think we have done enough to let people know the kind of risks we're facing that we know but i i would say 80 of my friends and family don't know which and like they're educated people they don't know and i just don't think we've done a good enough job of it so i will throw that in that's where i would put it in thank you very much for indulging me in that last very big question and challenge um thank you so much for uh to our panelists and and david as well for joining us today and all of you for attending um i have to wrap it up now and we could talk for for much longer but uh on that data and vision issues that the the deep dive webinars continue the next week is um on 6th of october the next webinar is on role of business and i hope and i'm sure we'll pick up some of those these topics um there as well and have a great rest of your day