The rating agency has acquired a majority stake in Four Twenty Seven, a leading provider of data, intelligence, and analysis related to physical climate risks.
The buyer said the deal “solidifies Moody’s commitment to promoting transparent and globally consistent standards for evaluating environmental, social, and governance risks and opportunities.”
Last year, Four Twenty Seven developed a tool with proptech firm Geophy to project granular risk of climate change on REITs.
Four Twenty Seven will continue to be headquartered in Berkeley, California operating under its existing brand, and will be an affiliate of Moody’s Investors Service.
The addition of Four Twenty Seven enhances Moody’s growing portfolio of risk assessment capabilities and underscores its work to advance global standards for assessing environmental and climate risk factors. Four Twenty Seven will also strengthen Moody’s growing thought leadership and research on incorporating climate risk into economic modeling and credit ratings. The deal complements Moody’s recent acquisition of Vigeo Eiris, a leading provider of ESG research, data, and assessments.
Four Twenty Seven scores physical risks associated with climate-related factors and other environmental issues, including heat stress, water stress, extreme precipitation, hurricanes and typhoons, and sea level rise. Its scores and portfolio analytics feature extensive global coverage and quantify climate risk exposures across asset classes, with detailed data covering over 2,000 listed companies, one million global corporate facilities, 320 REITs, 3,000 US counties, and 196 countries. Four Twenty Seven’s data and indicators are used by asset owners, asset managers, banks, corporations and government agencies to understand and evaluate the potential climate risk they hold in their portfolios and activities.
“Four Twenty Seven has built a strong platform for quantifying climate-related exposures and producing actionable risk metrics, which are essential to understanding and informing climate risk and resilience measures,” said Myriam Durand, Global Head of Assessments at Moody’s Investors Service. “Moody’s is committed to offering global, transparent standards for assessing environmental risk, and the acquisition of Four Twenty Seven advances our objective of integrating climate analytics into our offerings.”
“Moody’s global coverage and analytical capabilities, combined with Four Twenty Seven’s comprehensive climate risk data and intelligence, provides an ideal path to continue our work helping market participants integrate potential climate impacts into risk management and investment decisions,” said Emilie Mazzacurati, Founder and CEO of Four Twenty Seven.
The terms of the transaction were not disclosed, and it will not have a material impact on Moody’s 2019 financial results. The transaction was funded with cash on hand.