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There should be no boundaries when it comes to enhancing climate risk analytics

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Climate and Resilience Hub|Climate Risk and Resilience

By Geoffrey Saville | November 12, 2021

Climate risks require a collaborative approach to accelerate innovation and develop tools and models that create a comprehensive view of the risks.

Having spent my career working on climate and weather-related applications and services in the public and private sectors, it’s both gratifying and encouraging to see such attention on COP26. There is a palpable air of excitement and steely resolve in those attending the event to push climate agendas and promote new innovations. This is a feeling that I last felt nearly six years ago on my journey to Paris to contribute to events surrounding COP21.

Despite the delay in both action on climate change and the postponement of COP26 due to the pandemic, considerable progress has been made. COP26 should now provide the forum for governments and state actors to negotiate the transboundary issues related to climate change impacts and how they can contribute to progress, regardless of their levels of economic wealth or development.

I use the term “transboundary” here to acknowledge that carbon emissions do not care for borders or political leanings, and so solutions must equally be connected and collaborative. This is the essence of the Conference of the Parties or COP events. It also sets the stage for private sector companies to share their experience, knowledge and tools with each other and with the public sector, so that advances made in assessing risks and better managing the costs and opportunities associated with a warming climate can be realized. 

An analytics renaissance

Climate change is a wicked and complex problem, but we are witnessing a renaissance in climate risk analytics based on scientific developments over the last few decades. Tools that have been traditionally used by the insurance and reinsurance industry are being adapted to use information from the latest climate models. These methods will not be perfect, as no model is the truth, but they can provide a springboard for greater innovation and a starting point as companies and governments tackle the impacts of climate change and attempt to mitigate future warming.

There may be many grand statements of intent at COP26, and platitudes will be shared generously, but the event should shine a spotlight on amazing scientific advances in the last few years. These are synthesized in the Sixth Assessment Report from the Intergovernmental Panel on Climate Change (IPCC – AR6) that is being released in stages (Working Group 1 is already available) as well as in the progress made by regulators and environmental, social and governance (ESG) initiatives across multiple industries and regions of the world. Thousands of scientific papers are analyzed in the IPCC assessment reports, reviewed by experts from all sectors to provide feedback to help provide industry experience and identify the needs of policy makers and private sector decision makers at events such as the COPs.

It is a truly interdisciplinary problem. As the risk community seeks to understand climate impacts in a holistic sense, incorporating physical risks as well as the socioeconomic factors, it is important for tools and data to be made available to the wider community in an open and transparent way. This allows greater innovation and contribution from academic institutions as well as greater access, connectivity and opportunity for collaboration among private and public sector users.

There are of course many choices to make and challenges to overcome, such as how to balance a carbon-focused approach to mitigation versus a holistic approach to tackle all sustainability issues together. Among the questions:

  • How might we improve ESG metrics to evolve into useful frameworks for climate risks?
  • Can we encourage genuine reductions in emissions and consumption rather than using the myriad of offsetting schemes?
  • How might different levels of carbon taxation affect different industries?
  • What is the threshold for different industries or companies to appreciate and realize the win-win of taking action to reduce emissions while developing more sustainable business practices and a better, cleaner and more just world?

The first challenge, I would suggest, is to work together. Through working together, we can enable more appropriate use of data from climate models and the development of new industry-impact metrics to create integrated solutions for decision making.

Author

Head of Weather and Climate Risks Research

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