Climate and Physical Risk is one of the biggest issues of our time, and companies are rushing to piece together Climate Risk strategies with the goal of staying ahead of the game as compliance and mandate requirements are quickly appearing on the horizon.
Because we recognize the importance of climate risk, Weather Source and its parent, The Weather Network/Pelmorex, have formed a dedicated Climate Risk Enterprise Solutions Group to ensure that we have the exact product and services line-up to meet the inevitable demand. You may already be familiar with The Weather Network/Pelmorex as they are the third largest weather company in the world and employ a staff of over 500 individuals, many of whom are meteorologists, data scientists and software engineers. Although we have been working on climate change and risk over the past few years, we have now created a dedicated team with a substantial commitment of resources and we are very excited about the group’s roadmap as we move forward.
The Climate Risk Enterprise Solutions Group is actively developing climate risk intelligence products and services collectively known as the Climate Intelligence Platform (CIP). Whereas our OnPoint Product Suite delivers a wealth of accurate and actionable global weather data down to hyper-local points of interest, the CIP will provide critical climate risk intelligence to help businesses and organizations navigate evolving climate risks and opportunities going forward years and decades into the future. The forward projections of climate are based on the IPCC, CMIP5, and CMIP6 climate modeling runs which have been analyzed by a team of climate scientists to show the most plausible climate change probabilities.
This new division is also actively developing Extreme Weather Climatology products that will provide a foundation for understanding and quantifying the probability of various weather phenomena under our planet’s current climate conditions. These products will act as a reference for current climate means and variances for any location including current climate trends and will also support scenario planning in regard to current climate trends.
According to NASA, scientists have high confidence that global temperatures will continue to rise for decades to come, largely due to greenhouse gases produced by human activities. The Intergovernmental Panel on Climate Change (IPCC), which includes more than 1,300 scientists from the United States and other countries, forecasts a temperature rise of 2.5 to 10 degrees Fahrenheit over the next century. The IPSS says the extent of climate change effects on individual regions will vary over time and with the ability of different societal and environmental systems to mitigate or adapt to change.
“Taken as a whole, the range of published evidence indicates that the net damage costs of climate change are likely to be significant and to increase over time.” – Intergovernmental Panel on Climate Change
As McKinsey has researched, physical climate risk is growing, often in nonlinear ways. These are growing across regions, even as the hazards and their impacts grow more intense within regions. Most of the increase in direct impact from climate hazards to date has come from greater exposure to hazards rather than from increases in the mean and tail intensity of hazards.
They found that intensifying climate hazards could put millions of lives at risk, as well as trillions of dollars of economic activity and physical capital, and the world’s stock of natural capital. The intensification of climate hazards across regions will bring areas hitherto unexposed to impacts into new risk territory.
As a result, policy makers and business leaders will need to put in place the right tools, analytics, processes, and governance to properly assess climate risk, adapt to risk that is locked in, and decarbonize to reduce the further buildup of risk.
Why should this be important to your business?
With the COP26 conference in Glasgow having recently taken place, new initiatives are being discussed regarding climate risk and what can be done globally to combat climate change. Britain’s Boris Johnson claimed he is “cautiously optimistic” over progress made at COP26 as he warned world leaders they must not think the job is done and one of the biggest takeaways is that businesses, in addition to global governments, will be viewed as custodian’s the climate and the catalyst for change. Four big takeaways from the conference to be aware of:
- Canada, the U.S., the U.K. and 21 other countries signed a historic deal to stop new direct public finance for coal, oil and gas development by the end of 2022.
- Several major coal-using nations have pledged for the first time to phase out their use, others vowed to end investment in new coal-fired power plants.
- A large scale report has found that global carbon emissions have rebounded faster than expected and are close to the record level seen before the pandemic.
- Implementation of global sustainability and zero carbon initiatives.
With these developments, companies across the globe will need to pivot quickly as they will undoubtedly be affected as mandates and compliance regulations begin to take shape.
What does this mean for your business?
As companies prepare and start to prepare to meet these compliance and regulatory mandates they will need to be focused not only on present business processes but also how they will evolve these processes in the short and long term to ensure they are in compliance. These types of exercises require tremendous data and analysis for stress testing processes and scenario planning.
How to Get Started
Climate and Physical Risk needs to quickly become a major factor in decision making, just as information systems and cyber-risks have become integrated into corporate and public-sector decision making. Additionally, companies will need to take climate and physical risk considerations into account when looking at capital allocation, green initiatives, development of products or services, supply chain management, and more.
Ensuring you have access to comprehensive weather and climate data is an integral and important first step. Which is exactly why Weather Source and Pelmorex/The Weather Network have already begun to develop the tools needed to assist companies with these efforts.
Weather Source’s OnPoint Product Suite provides global historical weather in hourly and daily format back to 2000 to present and with a 42-day forward forecast. In addition, we also have historical forecast data in pristine format in both hourly and daily format. The fact that we have a rich, statistically consistent historical data set makes the data perfect for back testing and then building predictive models to quantify and understand risk, support compliance and mandates and better forecast the impact of weather and climate all from a single source of truth.
In addition, our Climate Risk Enterprise Solutions Group will be developing the necessary tools, applications and data to assist your business with navigating the evolving climate risks and opportunities going forward years and decades into the future.
Talk to us about what we are doing and how we can assist you in your efforts moving forward.