The recent extreme heatwaves in Europe, worsening fire risk in the UK, and floods in Bangladesh are the latest proof of an incredibly volatile global climate, and we must act accordingly. Leading scientist, Dr. Katharine Hayhoe, recently gave a warning about climate risk: “Our infrastructure, worth trillions of dollars, built over decades, was built for a planet that no longer exists”.
How climate volatility affects businesses
Our increasingly severe weather can have a devastating impact on business assets. Southwestern US is facing a megadrought. Italy has just declared a state of emergency in five northern regions due to the worst drought in 70 years. Recent research shows that Spain and Portugal are suffering from the driest climate for 1,200 years with serious implications for the future. Also, the Met Office shared that England has experienced its driest first half of the year since 1976, warning water companies to begin putting the preliminary stages of their drought plans into action.
Impacting water availability, drought can reduce productivity or even lead to plant closure in water-intensive industries such as manufacturing or energy production, resulting in heavy financial burdens for companies without appropriate adaptive measures in place.
Other climate hazards that can directly impact businesses and their assets include precipitation, wind, flooding, and heat stress. Each of these risks can affect assets in multiple locations differently. Climate hazards can seriously damage buildings and infrastructures and cause chaos and danger among transport networks. Not having a climate strategy in place can be disastrous, resulting in significant revenue loss. By investing in science-backed, valuable climate intelligence (CI), organizations can assess the physical climate risk facing their assets and prioritize accordingly.
Climate risk reporting
As all G7 nations including the UK, Canada, France, Switzerland, Italy, Japan and the USA agree to implement mandatory TCFD-aligned climate-related financial disclosures, every company needs to be ready to disclose their physical climate risk.
Yet, many organizations are facing serious obstacles when it comes to gathering climate intelligence. Our survey found that:
46% struggle with complex aggregating data
43% a shortage of actionable intelligence
38% a limited understanding of the data
Choosing the right intelligence provider who can translate multiple, disparate datasets into decision-useful insights is essential.
What climate intelligence data is needed?
Organizations need decision-useful insights to unify multiple teams, departments and regions around a shared source of truth. By building a full picture of climate risk, sustainability leaders, risk managers and analysts alike can identify the risks and opportunities across their built assets – from the supply chains and data centers that their operations rely on, right through to their office buildings and key distribution centers.
Being able to understand and share these insights is a fundamental step toward confident, informed and autonomous decision-making.
Science-backed climate intelligence insights
Cervest’s product, EarthScan™, provides science-backed climate intelligence to help sustainability leaders discover, quantify and share climate risks on assets they own, manage or rely on. By translating multiple datasets into decision-useful insights at the asset level, EarthScan provides the probability of the impact of climate change between 1970 and 2100 at a portfolio and asset level.
Users can discover their climate risk on both a combined or single risk hazard basis for five risk categories – Heat Stress (including heatwaves), Precipitation, Flooding (coastal and riverine), Wind and Drought. The Combined Physical Risk rating is a unique indicator of the overall risk facing an asset. By surfacing the greatest risks and opportunities across an entire portfolio, users can take a closer look at what specific risks are driving the rating.
EarthScan return periods - heat stress risk
For progressively richer insights, selecting a single risk hazard such as Heat Stress will produce dynamic insights on predicted heatwave temperature, duration and length over time at the chosen asset or portfolio.
If you’d like to find out which climate risks are impacting your physical assets, book a call with one of our Physical Risk Climate Experts today.
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