The State of California has launched an advisory group to assess climate risk related to how public money is being invested.
The Climate-Related Risk Disclosure Advisory Group, led by the state governor’s Office of Planning and Research in partnership with Stanford University’s Sustainable Finance Initiative, aims to further California’s leadership on addressing the immense challenges posed by climate change.
“There is no question that climate change is having an immediate impact on California’s fiscal and economic health,” said California governor Gavin Newsom. “This effort will improve our understanding of climate risk from an investment perspective, ensuring California leads not only on climate policy, but on safeguarding public dollars in the face of increasing climate risk and advancing an equitable recovery.”
California has experienced first-hand the physical and financial impacts of climate-related crises, including recurrent drought conditions, the devastating wildfires of the past three years, and the extreme heatwave of 2020. Increased state budget risk from climate disasters and the economic losses felt by local governments across the state are examples of the clear economic impacts of climate change.
“For every dollar we spend mitigating climate risks, we can save at least six dollars in disaster response, so understanding and adapting to these risks is not just smart policy – it’s our fiscal responsibility,” said Kate Gordon, advisory group co-chair, director at the Governor’s Office of Planning & Research and senior advisor to the governor on climate.
“California has already established itself as a national and global leader in fighting the climate crisis, and understanding climate risk disclosure will advance this effort and set an example for the rest of the United States and the world.”
The Advisory Group, as part of California’s cross-government framework for urgently addressing and mitigating the impacts of climate change, will focus on identifying best practices across national and international climate risk disclosure, and on the unique challenges and opportunities that might arise when applying climate risk disclosure to a public sector decision-making context.
As well as co-chairs Kate Gordon and Alicia Sieger, of Stanford University, the advisory group consists of 19 experts drawn from academia, institutional investors, and financial service providers.