Getting your organization’s climate risk assessment right

According to research at Nature, many organizations encounter obstacles when embarking on a climate risk assessment and cannot get a full picture of where their organization stands in the ever-changing climate. Businesses mustn’t underestimate potential climate hazards. Climate volatility can present huge costs in terms of repair, shut down and supply chain problems. So how can businesses conduct a transparent, more comprehensive, climate risk assessment?

In the current climate crisis, every organization should have a far-reaching climate risk assessment to aid climate planning. Every news outlet around the world is reporting on the urgency of climate change – leading scientists recently commented about the world heading into ‘uncharted territory of destruction’ – with governments and businesses not changing fast enough. However, as Nature research shows, there is a systematic underestimation of climate risk across the board, mainly because of hurdles such as access to data, and knowledge and also because it’s hard to do.

Where can businesses start? The first step is choosing the right climate intelligence platform. Organizations need to have the best climate insight or intelligence provider – this is the foundation to a comprehensive climate strategy. This climate intelligence should provide them with information about the climate hazards facing their assets across various locations and assets, over different timelines and climate scenarios simultaneously. A clear illustration of how a portfolio or supply chain could be or is exposed over time is critical to implement changes and make the right decisions, quickly.

Next, look at what the main characteristics of your assets are: the aspects that make them most vulnerable to climate hazards – it’s important to get to the root of potential challenges. To do this, companies may start with an overall value for their risk, such as combined physical risk which takes into consideration flooding, heat stress, precipitation, extreme wind and drought. This allows them to pinpoint their most vulnerable assets to prioritize action.

Finally, looking at the policy decisions that affect how your organization is impacted by climate change, should help the process. An example of this would be the climate-related regulations that are now in force in a number of countries including the UK, with other countries such as the US likely to follow soon.

However, as simple as it might sound, sourcing credible and comprehensive data to fulfill these three steps and integrating them into your day-to-day operations is challenging. That’s why selecting the best climate intelligence partner to support this process is essential to creating an accurate climate risk assessment – revealing the real level of climate risk exposure to a portfolio.

Our climate intelligence product, EarthScan™, can help your organization integrate the finer details, providing rich data on vulnerabilities across all assets – building a full picture of climate risk exposure across multiple climate hazards, timeframes, and climate scenarios simultaneously. When compiling a climate risk assessment, it’s a foundational element.

Start building your climate risk assessment today by requesting a free summary of your portfolio's climate risk created by our physical climate risk experts.