Climate X: Making climate risk data useful and usable for the financial sector

Increasingly the financial sector is interested in understanding their risk to the impacts of climate change. This is driven both by governmental regulation that requires financial services to declare their risks due to climate change, as well as a desire to mitigate risks to profits that climate change poses.

To generate useful and accurate risks assessments users need access to high quality data of the projected changes to hazard due to climate change. However, there is typically a gap between scientific research and what our clients need to understand their risk. Many of the most damaging hazards, such as flooding and subsidence, are not directly modelled by climate models and require specialist hazard knowledge and well as climate data to assess. Scientific studies often focus on large scale changes or small regional studies, whereas clients need consistent high-resolution data across multiple regions. Additionally, a risk portfolio covers a wide range of climate related hazards, which all must be considered when understanding and attempting to mitigate risk. Users will often not have the inhouse knowledge to use data generated by the scientific community directly or the expertise to assess how this relates to the risks posed by different hazards. Therefore, the financial sector is turning to external data providers for this information, such as Climate X.

This talk will cover how at Climate X we make reliable and robust risk assessments of climate hazards that are presented in a way that is usable and useful for the financial sector as well as various other decision makers. The focus will be on how we use open-source climate model data to generate our heat risk metric. This will cover the definition of the metric, how it is calculated and how we how we present the data to users including accuracy and uncertainty. I will also present overview of the other hazards that we provide and the need for an interdisciplinary team to cover the broad range of physical hazards related to climate change.