Implications of indicator aggregation methods for global change vulnerability reduction efforts

Composite indices are used to assess and prioritize mitigation and adaptation strategies for addressing the impacts of global environmental change. We evaluate different aggregation tools for creating these indices and their potential effects on mitigation and adaptation efforts. We assess the association of each aggregation tool with different types of trade-offs, risk strategies, and the resulting spatial and statistical distribution of their composite scores. Four aggregation tools are investigated (Weighted Linear Combination, WLC; Ordered Weighted Average, OWA; Data Envelopment Analysis, DEA; Compromise Programming, CP) using an example of vulnerability to flooding in the eastern United States. The choice of aggregation tool affects vulnerability outcomes, decision risk strategies, and the prioritization of vulnerability reduction strategies. DEA produces the highest vulnerability scores, representing a risk averse strategy associated with pessimistic outcomes. WLC implies a neutral and fixed risk strategy. CP produces a range of outcomes from neutral (equivalent to the WLC) to pessimistic, depending on its parameters. OWA offers the highest flexibility to adjust the levels of trade-off and risk strategy, producing a range of vulnerability outcomes, from optimistic to pessimistic. The units of analysis, when prioritized across the different aggregation tools, are more consistent for the top ranked units. However, the differences in rank become substantial as the selection threshold score decreases. To obtain better informed vulnerability reduction strategies, we recommend to (i) address how trade-off and decision risk are embedded in the aggregation tool chosen, and (ii) evaluate their effect in the prioritization of mitigation and adaptation strategies being considered.     

The determinants mostly disclosed by companies that are members of the Carbon Disclosure Project

Concerns about climate change as a result of anthropic actions have led to an increase in the volume of information disclosed about it in the reports of companies that are members of the Carbon Disclosure Project (CDP). In this context, the factors most disclosed remain obscure due to both the complexity of climate change impacts and the stakeholders’ different interests. This study aims to identify which factors are most disclosed in the reports of companies that are members of CDP. For this purpose, it is necessary to investigate if the factors indicated by managers and experts are the main ones disclosed in the reports of Brazilian companies that are members of CDP, as well as to identify which companies stand out in climate change disclosure based on these factors. To this end, 463 reports submitted by 48 companies between 2014 and 2016 were examined and 32 factors were investigated using the NVivo® software. Some companies submitted reports with unified titles, which reduced the sample. The results indicate that certain factors—prevention of pollution, prevention of loss, management of environmental assets, volume of greenhouse gas (GHG) emissions, and climate change strategy—account for 50.03% of the total volume of information disclosed about climate change. The main lesson learned from this research is that climate change mitigation strategy is strongly supported by the evidence of corporate annual reports, and it has relation with the following determinant factors: pollution prevention, loss prevention, environmental asset management, GHG emissions, and the strategy chosen by the companies to deal with climate change. Due to the low volume of research related to loss prevention and pollution prevention, we have identified that little attention has been paid to these items. Based on our results, we recommend that climate change mitigation strategies begin to consider these determinant factors in their structure because both have a strong influence in demonstrating how companies are managing these factors for stakeholders. Therefore, companies can benefit from this data to manage their resources for the maintenance of the social contract (legitimacy) through the factors most disclosed, especially companies with lower scores on the scale of ranking presented. Hence, stakeholders can have access to more information on strategies that mitigate climate change and help companies improve the disclosure of the actions that contribute to reduction of GHG emissions.     

Valuing deaths or years of life lost? Economic benefits of avoided mortality from early heat warning systems

The study aims to explore the main drivers influencing the economic appraisal of heat warning systems by integrating epidemiological modelling and benefit-cost analysis. To shed insights on heat wave mortality valuation, we consider three valuation schemes: (i) a traditional one, where the value of a statistical life (VSL) is applied to both displaced and premature mortality; (ii) an intermediate one, with VSL applied for premature mortality and value of a life year (VOLY) for displaced mortality; and (iii) a conservative one, where both premature and displaced mortality are quantified in terms of loss of life expectancy, and then valued using the VOLY approach. When applying these three schemes to Madrid (Spain), we obtain a benefit-cost ratio varying from 12 to 3700. We find that the choice of the valuation scheme has the largest influence, whereas other parameters such as attributable risk, displaced mortality ratio, or the comprehensiveness and effectiveness of the heat warning system are less influential. The results raise the question of which is the most appropriate approach to value mortality in the context of heat waves, given that the lower bound estimate for the benefit-cost ratio (option iii using VOLY) is up to two orders of magnitude lower than the value based on the traditional VSL approach (option i). The choice of the valuation methodology has significant implications for public health authorities at the local and regional scale, which becomes highly relevant for locations where the application of the VOLY approach could lead to benefit-cost ratios significantly lower than 1. We propose that specific metrics for premature and displaced VOLYs should be developed for the context of heat waves. Until such values are available, we suggest testing the economic viability of heat warning systems under the three proposed valuation schemes (i–iii) and using values for VOLY commonly applied in air pollution as the health end points are similar. Lastly, periodical reassessment of heat alert plans should be performed by public health authorities to monitor their long-term viability and cost-effectiveness.     

Disclosure of climate risk information by the world’s largest companies

The risks related to global climate change are seen as threats to companies, taking into consideration their impact on the return on investment. In order to mitigate climate risk and introduce new opportunities to financiers, companies need to identify, manage, and report climate risks. The purpose of this paper is to investigate the climate risks disclosed by the 100 largest companies in the world, according to the Bloomberg and Price Waterhouse Coopers (PwC 2015) classification, and identify some characteristics of these companies that explain the disclosure level of such information. Preliminary results revealed that of the companies investigated, 14% did not disclose any climate risk information in the Carbon Disclosure Program (CDP) report. Also, from the companies that disclosed information according to the Global Reporting Initiative (GRI), 9.9% did not provide information regarding policies, actions, and strategies for mitigating the risks related to climate change. The results shown by the content analysis suggested that, in general, there is still a low level of disclosure about climate risks by these companies. The final results through econometric instruments and statistical tests indicate that the size of the company or the fact that corporations are from developed countries do not necessarily explain the level of information disclosed. However, the activity sector, the continent, and the efficiency of the Board of Directors are factors that strongly explain the level of climate risk disclosure. We conclude that more effort is needed to encourage an engaging attitude from corporations to develop actions, policies, and strategies to mitigate climate change risks and threats. In addition, the world’s largest companies should make a greater investment in climate risk disclosure.