Bank Error Transcript

John Robson:

It's hardly surprising these days to encounter some unsubstantiated claim that bad weather is getting worse due to “climate change”. Whether it’s wildfires, floods, droughts or hurricanes, the vultures dependably swoop with ill-informed glee. But we were nevertheless astonished to read “Hurricane activity in the Gulf of America/Gulf of Mexico (and off Mexico’s west coast) is perhaps the most important natural disaster risk for investors focused on the region. Not only does the risk last six months each year, but the frequency and intensity of these storms are increasing due to climate change.”

We wouldn't have been surprised if this verbiage had come from Greenpeace, or the UN Secretary-General or the David Suzuki Foundation. We don’t expect accuracy from any of those sources. But it was from a leading Canadian bank, misinforming their clients that a great wind would soon blow their money away. And it’s one thing when activists indulge in PR fun and games. But it’s quite another, and weird, when it’s a bank engaging in climate disinformation, with real savings and investments on the line.

So, for the Climate Discussion Nexus, I’m John Robson, and this is our “Fact Check” on Scotiabank’s Focus on Hurricanes.

Here at CDN one of the themes that we keep coming back to is the gap between rhetoric and reality on climate, including when it comes to hurricanes. The problem isn’t just that the reasoning is wrong, it’s that the facts are wrong. And in this case, simply put, the data show that hurricanes in general, including the Atlantic basin which includes the Gulf of America, or Mexico, are not increasing in either frequency or intensity.

And the data also show no discernible, reliable link between fluctuations in their activity and climate change.

And it’s not a state secret. It’s well-known and we among others have often written about it. So how did Scotiabank not know?

The document in question is in their “CAPITAL THAT WORKS” “Focus On Series”, and it’s a note saying “An Above-Normal Season Is on the Way”.

And just for starters, “on the way” isn’t a fact, it’s a prediction. So what's it based on? The Bank does of course have a valid point that if hurricanes are increasing, then “The impact on economic activity, sectors/industries, and, of course, equities, can be profound. Unsurprisingly, property and casualty insurers stand to face higher claims due to hurricane activity, while construction and home builders typically experience a surge in new business.”

But, to quote the Spartans to Philip of Macedon yet again, “If”. So, why does the bank think that hurricanes are increasing?

Again, they do note that “This year, the NOAA has placed a 60% probability on an above-normal hurricane season. This means we can expect 13 to 19 named storms and six to 10 hurricanes, of which three to five are likely to be major (Category 3+).” And since, we observe yet again, half of all things are above average, from weather to driving ability, and half are definitely below average, it is not wildly beyond the realm of possibility that NOAA’s cautious venture that this year is ever-so-slightly likely to be a bit busier than a typical year could pan out.

Even so, assuming bankers take a green-eye-shade approach to such things not a green-zealot approach, surely they should have checked what the trends are, including whether there’s a trend for the usual suspects to over-predict hurricane seasons.

Because of late they certainly seem to have. In 2024 they predicted an unusually active one and the reverse occurred. And that’s not so long ago you have to look at microfilm to discover it. Especially because it also happened in 2023. And by “it” we don’t just mean a quiet season. We mean a quiet season after loud predictions.

Which prompts an acerbic observation that for all the cheap shots about CDN and other skeptics being in league with big companies to burn up the planet, Scotiabank doesn’t even seem to read our readily-available, accessible material on such topics, let alone fund it. Maybe they should, instead of giving sums we can only dream of to people who hate them and want them destroyed.

So, here’s the link to subscribe, Scotiabank guys and gals, and here’s the one to donate.

No really, because before telling clients “the frequency and intensity of these storms are increasing due to climate change”, it might have been prudent to, say, take a look at the actual tally of hurricanes thus far as opposed to some lab-coated bureaucrat’s prediction. And if they had, we say again, checked CDN before believing alarmist propaganda, they’d know that we’ve had the quietest start to a season since 1970. Which is the kind of real-world information a real-world investor might reasonably desire and might reasonably expect you to provide.

And another thing. Before we even get to the climate science, we need to talk about economics, the sort of thing that a naïve observer might imagine that banks specialise in, perhaps to a fault. Because as Roger Pielke Jr. and others have catalogued, in detail, and as we have again reported regularly, damage from natural disasters is not getting worse and therefore it can’t be getting worse because of climate change or anything else including eye of newt.

It is getting more expensive, because there are more people in the world and they’re getting richer. But someone losing $2,000 out of $100,000 is not more severely afflicted than someone losing $1,000 out of $10,000. So what matters, and we shouldn't have to explain this to an investment advisor, is losses as a share of global GDP. And speaking of Pielke Jr., whose relentless data- and statistical-analysis-driven critiques helped put NOAA’s lurid “billion-dollar disaster” clickbait out of climate-alarmist business as a parody of bad statistical practice, his correction of their chart to take growth in GDP into account shows a downward slope in the adjusted value of disasters in the U.S. since 1980. But even the original shows that tropical cyclones are not increasing.

And just as an increase in storms would have real-world consequences, so there are real-world consequences to mistakenly believing in one, including foregone opportunities and misplaced ones. As the Manhattan Contrarian, energy expert Francis Menton, observes, and maybe he should be an investment banker: “It was only two years ago, in 2023, that I was writing posts compiling long lists of quotes from climate activists warning that all assets used for production of coal, oil and gas were about to become obsolete and ‘stranded.’ After all, wind and solar were (supposedly) cheaper and cleaner for generating electricity, which could then power anything and everything. Therefore anyone stupid enough to make further investments in producing fossil fuels would lose everything.”

But actually, he points out, the reverse is true: it’s renewable investments that are crashing, and one reason why is that as lurid predictions or even claims of worsening weather turn out to be inaccurate, there’s less policy pressure for radical measures, including subsidising alternatives.

At this point if someone’s accusing us, if not the bank, of being too focused on economics, and wailing “What about the human cost?”, Menton also just pointed out that the number of worldwide deaths due to climate-related disasters just hit a record… a record low.

“During the first half of 2025, a new record was set for the number of deaths caused by climate and weather disasters. Can you guess what that record was? If you read left-wing media sources, and believe anything they say, you might think that the recent record has something to do with a large and growing number of deaths. … you might be surprised by the actual record that has been set: The first half of 2025 (January to June) has seen the fewest number of deaths from climate and weather disasters of any first half year this century.”

And, by the way, his source was “Roger Pielke, Jr.’s Honest Broker Substack”, to which the bank’s analysts might also usefully subscribe though, unlike our material, it’s not free.

And turning now to the science, if you download the Scotiabank report, in response to an indignant complaint that didn’t come from us, it added the anodyne “though there is debate within the scientific community” and linked to a piece from the MIT Technology Review that proceeded to say “scientists have found that warming temperatures are causing stronger and less predictable storms” before stammering that “It might seem that there are far more storms than in the past, but we don’t really know for sure. That’s because historical records are limited, with little reliable data more than a few decades old…”

You ain’t foolin’. So we have no reason to suppose we’re getting stronger storms, or “less predictable” ones, whatever the latter is meant to mean in the face what historical data we do have. For instance, was “Saint Marcellus’ Flood” of January 13, 1362 predictable? Had the Bank heard of it? We had.

Actually that “Den Store Manddrukning or “Great Drowning of Men” if you’re not Danish was the second such disaster, because there was a “First St. Marcellus Flood” on January 16, 1219. So, can we predict floods on his feast day? No. Nor can we say whether there were others because of that business about limited records.

As for the future, the MIT piece eventually admits that “Some climate models suggest that climate change will increase the total number of storms that form, while others suggest the opposite”. So even if we’re told that scientists have found that blah blah blah, actually the models disagree and the data is unclear. Mostly.

What’s not unclear is that in recent years, as Scotiabank again would know if they spent more time with the Climate Discussion Nexus and less with the watermelons, there has been no increase in the number of cyclones worldwide or in their ferocity. The latter, measured as “Accumulated Cyclone Energy” or ACE, is important because obviously if there were 10% fewer storms but they were on average 30% stronger it would be fair to say that they’re getting worse. But, it’s not so.

Of course, as with everything, half of hurricane seasons are below average. So now, with a hat tip to the late Donald Rumsfeld and his unknown unknowns, we have to produce a firm, even apodictic piece of ignorance.

As we wrote way back in 2024, in July, the accurate tally of Atlantic hurricanes that we do possess over the last century or so (because regular surveillance flights began in the mid-1930s, and satellite records in the late 1970s) so that data that we can rely on tells us that… there’s a lot of natural variability. And statisticians can tell you that the more of that the more variably there is, the harder it is to discern trends and the longer it takes.

In the case of Atlantic hurricanes, both the total number and the number of majors jumps around, year to year and decade to decade, in ways that tell you … that these numbers jump around. Climate alarmists may fling terms like “thousand-year event” at us, but unless you have dependable records going back thousands of years, in the plural, that’s just bad statistics and hokum. And don’t banks take great pains on statistics? If not, they probably should.

And if they also took a statistician or two on board in place of propagandists, then they’d discover that due to the high natural variability in hurricanes, we won’t know whether any reliably observed pattern over the last 50 years represents a trend, in any direction, until we have hundreds or even thousands of years of reliable records. No matter how much we wish we had them for investing or even for polemical purposes.

In the absence of that kind of data, we may want to rely on whatever is out there for at least a rough estimate. And again, if Scotiabank wanted to spelunk, then they should have subscribed to our free newsletter, where they’d have received ample anecdotal evidence of horrendous hurricanes going back hundreds of years.

Obviously nobody wants to get hit by a hurricane, or have their expensive asset hit by one. Or three. Or ten. But if the best available advice is that they’ve always been a problem, they’re hard to predict and they hit hard when they hit so dig a deep foundation, then you should say so. You should not curry favour with implacable enemies by misleading well-meaning friends or well-paying clients.

So, there’s our free fact-check, Scotiabank. At least free to you because thousands of other people who value our work as much as you should have been kind enough to help support it, as you should. And please understand that our conclusion is that what you said wasn’t just wrong, it was obviously wrong and that there was nothing hard about discovering that it was wrong.

So, subscribe to our newsletter. Watch our videos. And stop throwing cash at trendy anti-capitalist causes who mislead you and your clients and cannot be appeased with kind words or cold cash. Send it to us, because they’ll say you did anyway and because we have the facts you need. And need badly, it seems.

Seriously. Here’s that donation link again. You’re welcome.

Don’t let the winds of advocacy blow your tongues around, or your clients’ money away.

For the Climate Discussion Nexus, I’m John Robson, and that’s our fact check on Scotiabank’s hurricane claims.