On Thursday, May 20, President Biden signed a sweeping Executive Order stating:
“It is therefore the policy of my Administration to advance consistent, clear, intelligible, comparable, and accurate disclosure of climate-related financial risk, including both physical and transition risks; act to mitigate that risk and its drivers; … and achieve our target of a net-zero emissions economy by no later than 2050.”
The Executive Order extends and accelerates recent efforts by US regulators to require that companies take greater account of climate-related risks in their business activities, and requires that the Federal Government should start accounting for climate-related risks in its own activities as well.
The Gro Climate Risk Navigator was developed specifically to measure the impact of and manage the risk from climate change for every physical asset around the world.
For example, the Gro Climate Risk Navigator for the US Postal Service, which analyzes the data for 33,000 post office locations across the country, shows that climate change stands to cause the USPS to approximately double the annual carbon footprint of an average location by 2050 and increase it by approximately over 6.5 times by 2100 compared with today’s levels if there is no concerted global action.
This will be both costly to the US Government from a financial perspective and costly to our environment, but the cost and impact will vary widely by location.
The Gro Climate Risk Navigator for USPS also shows that in 2050, cooling the average post office in Hawaii and Florida will generate twice as much additional carbon emissions as cooling a post office in Indiana or South Carolina; four times as much additional CO₂ as cooling the average post office in Colorado; and over 10 times as much as an average post office in Montana.
This suggests that improving energy efficiency in post offices in Hawaii and Florida is a higher priority than in other states.
This type of prioritization is also important because there is a high level of variability of outcomes within a state. For example, the average post office in Brooks County, Texas, will generate 3.5 times as much additional CO₂ as in Lynn County, Texas.
In addition to managing physical risk to Federal assets and programs, the Executive Order extends this posture to the management of Federal suppliers, investments, and lending activity, effectively mandating that the largest lender in America will be assessing climate risk across its portfolio going forward.
Responsible and effective fiscal management will require not just aggregate data, but precise, location-specific data as well.
The scale of the challenge facing the Federal Government in following through on this policy should not be understated, and neither should the opportunity to both measure and manage both the carbon footprint and the physical climate risk of the US Government.