What can you do with climate intelligence?
In 2022, 10 climate-driven severe weather events incurred more than USD3 billion in damages – each. We are amid a climate crisis and it has become normal for climate disasters to headline the news. Apart from the devastation to our planet and communities, what does this mean for business? Simply put, it means organizations need to protect their assets, portfolios, and supply chains, and have resilience strategies in place, now and for the future.
Extreme weather events such as heatwaves, floods, and hurricanes can destroy infrastructures, buildings, and supply chains – in some cases, completely halting critical business operations. This massively impacts the global economy. A 2022 study highlighted that heatwaves alone have cost the global economy about USD16tn since the 1990s.
That is why it is essential to have access to science-backed, decision-useful climate intelligence (CI). It is only by getting climate intelligence across their entire portfolio and supply chain that organizations can truly see what climate risks might impact them and implement the appropriate adaptation measures.
What is climate intelligence?
Climate intelligence is business intelligence for managing asset-level climate risk and opportunity – informing business decision-making. The World Economic Forum (WEF) explains it as “historical, current and predictive information on our natural and built systems used to power insights for climate mitigation and adaptation”.
Having the best climate intelligence partner is important for organizations for them to truly assess their climate risks and make informed decisions about their portfolios, individual assets, and supply chain. Climate intelligence that is shared across the board then becomes a single source of truth companywide, acting as the foundation for collective climate actions.
Why use climate intelligence?
Using climate intelligence, organizations can make gathering information for mandatory climate-related financial disclosures and reporting purposes a more uniform, consistent process. They can get on-demand, updated climate insights, that span the three climate scenarios and multiple timelines – helping them to act quickly.
With Cervest Ratings™, a globally comparable, portfolio to asset-level rating system for interpreting and understanding climate-related risk, companies can evaluate each property or supply chain provider for climate risk, to inform out mitigation and adaptation measures. This climate intelligence can be shared when communicating with investors, stakeholders, and shareholders.
This decision-useful climate intelligence has many long-term benefits and also helps companies with:
1. Pinpointing adaptation spending
Organizations can build more robust assets by pinpointing climate adaptation spending. Examples of this could be installing flood protection measures around at-risk assets, factoring in the risk of extreme heat in outdoor projects (thus limiting working hours), or improving irrigation for high drought-risk assets and taking action to reduce water output.
2. Avoiding maladaptation
The definition of maladaptation is poor or insufficient adaptation. Maladaptation occurs when actions meant to reduce climate change impacts create more risks instead. Being best informed of the climate risks that could impact individual assets and having access to science-backed climate intelligence helps to avoid maladaptation.
3. Putting a price on climate risk
Retrofitting at-risk assets is costly and organizations need to know whether this type of climate protection is worth the investment. Combining Climate-Value-at-Risk (CVaR) metrics into the flooding and extreme wind ratings, Cervest Ratings can help companies to estimate the likelihood of climate risk and physical damage to assets. CVaR metrics allow asset managers to identify the level of physical damage forecasted for a particular asset, in time increments of five years up until the year 2100.
4. Avoiding stranded assets
Climate intelligence also helps leaders to avoid having stranded, uninsurable assets. They can find future alternatives for potential out-of-commission assets, such as new suppliers or physical locations – as they have the knowledge to plan ahead.
5. Creating contingency plans to reduce climate-related supply chain disruptions
Accessed on 600m+ assets globally, Cervest’s climate intelligence ensures decision-makers are aware of the climate risks and opportunities surrounding all assets and their supply chain. With these insights, they can approach high-risk suppliers about the mitigation and adaptation measures they are taking.
Accessing climate intelligence through EarthScan
Businesses can gather CI in a range of ways, both human- and technology-generated, but not all approaches will be standardized or deliver decision-useful information. Cervest’s climate intelligence product, EarthScan™, enables organizations to screen thousands of assets for physical climate-related risk and report on the greatest risks and opportunities on-demand.
For the first time, customers can analyze, rate, and report on the physical climate risk facing their assets, share directly with stakeholders, clients, investors, and other shareholders, and meet fast-changing reporting regulations with report-ready, science-backed insights and automated climate risk reports. EarthScan equips businesses, governments, and NGOs with the CI they need to make confident, informed decisions that enhance the resilience of their assets. It creates the most comprehensive picture possible of climate-related risk.
Read more in our What can organizations do with climate intelligence? ebook, to find out why climate intelligence is so crucial throughout climate change.
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