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Physical Climate Risk

Protect performance and strengthen resilience with our data-driven expertise that identifies, quantifies and manages physical climate risks to your assets, operations, suppliers and financial value.

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Increasing physical climate risks – from droughts, heatwaves, floods, storms and wildfires to rising sea levels and water scarcity – can damage your assets, disrupt your business and lead to loss of financial value. Physical climate change impacts are also amplifying your existing property damage and business interruption exposures, with correlated liability risks, such as directors’ and officers’ exposures, also impacted.

Wherever you are on your climate risk journey, you can underpin your risk management strategy with our climate risk solutions, address the risk-amplifying effects of climate change and outsmart uncertainty.

Optimize your approach with our powerful combination of physical climate risk experts, advanced physical risk data and sophisticated analytical frameworks that translate physical climate hazards into financial metrics.

Supporting your physical climate risk journey

We work to optimize your strategic response to climate change impact. You can transform your climate risk stance from reactive to proactive with our natural catastrophe risk consultancy services, including in-depth physical risk analysis, climate hazard and natural catastrophe predictive modeling, vulnerability and catastrophe/climate risk engineering loss and resilience assessments.

Our cutting-edge analysis defines your financial value at risk from physical climate risks.

We’re dedicated to helping you:

Identify your exposures to acute, event-driven risks – such as cyclones and hurricanes – and chronic risks related to longer-term shifts in climate – such as rising temperatures and sea levels – across your operations and value chain.

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Quantify the impact of physical climate risks on your business, operations and financial position.

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Understand your vulnerability to climate change and evaluate your adaptation and mitigation measures to avoid, reduce and transfer physical climate risk more effectively and efficiently.

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Identify physical climate risks

Managing physical climate risks effectively starts with accurately identifying your climate and natural catastrophe exposures. We focus on revealing the assets, regions, operations, suppliers, projects or acquisitions most vulnerable to these risks.

We can give you strategic and analytical views of the physical risk exposures of your value chain, combining industry-recognized models with our in-house indices and the latest scientific projections. To make sure you get a comprehensive risk assessment, we’re committed to being model-agnostic. We form our own view on your risk drawing on both industry recognized datasets and our own insight

And to cut through the complexity of identifying climate change impact on your business, we combine consulting with technology including interactive models, dashboards and advanced climate risk analytics.

Climate Diagnostic

Our Climate Diagnostic tool identifies the physical climate risks facing both your organization and your partners and customers, helping you identify:

  • Which of your assets are most at risk from physical climate risk now and decades into the future
  • How physical climate risks will impact your customers
  • Whether you should be moving to alternative suppliers ahead of climate-related disruption
  • What physical climate risk controls should the business prioritize to strengthen resilience in a warming world.

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Quantify physical climate risks

Measuring physical climate risks accurately enables you to choose the most effective and efficient measures to manage them. You can quantify the impact of physical climate risks on your organization robustly and transparently with our advanced data capabilities and expert consultancy.

Climate Quantified

Our Climate Quantified tool quantifies both present-day and projected estimated annual losses due to physical risk perils. The software also measures how much of your organization’s value is at risk under different climate scenarios and timeframes up to 2050.

We model both acute and chronic risks and forecast the value at risk for a range of climate scenarios and time horizons, looking into the impact on revenue and operational time due to hazards like heat, drought and water stress. We can also identify which individual assets might drive losses under various climate scenarios and timeframes up to 2050.

Our advanced Physical Value at Risk (PVaR) analytical framework enables you to define the impact of physical climate risk on your organization’s revenue and cashflow, providing a powerful lens to more clearly assess risk finance and resource allocation decisions.

Transparency on our underlying data sources and methods enables you to answer your stakeholders’ physical climate risk questions with greater confidence, including:

  • How will the intensity and frequency of physical climate risks increase over time?
  • How will these physical climate hazards impact your premises, operations, supply chains and workforce?
  • What is the financial impact of physical climate risk on your bottom line?
  • What is the financial impact of diverse physical climate risks on your portfolio of risks, individual assets and value chain partners?

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A visual to showcase the reports produced by this tool. For illustrative purposes only.
Climate Quantified - physical risk report

An example of the physical climate risk insights produced by the tool. For illustrative purposes only.

Manage physical climate risks

What measures will help you avoid, reduce, transfer or more effectively retain risks from physical climate change? Explore the optimal solutions to address your physical climate risks with our analytical deep dives into your resilience, cost-benefit analyses and strategic advice on your mitigation and adaptation measures.

We focus on reducing your overall physical risk metrics or examining the site-specific risk management measures you could take.

To help manage your physical risks most efficiently, we can integrate your existing asset protection measures into our analyses, working with your operational and/or HR teams as required.

We’re focused on helping you navigate climate risk and opportunities with our sector specialists and tailored solutions, helping you cut through the complexity of managing the impact of physical climate risk on the business and make more informed, better-value risk management decisions.

Our physical climate risk management expertise can help you:

  • Develop effective adaptations, working closely with your operational teams, providing cost/benefit analyses of mitigation and adaptation measures compared with reduction-in-risk metrics
  • Understand the adaptation and mitigation measures to avoid, reduce and transfer risk for key exposed sites, calling on climate risk and resilience engineering deep dives
  • Prioritize non-insurance risk mitigation controls and action plans, such as business continuity plans, recovery plans and crisis management readiness
  • Achieve risk and insurance optimization with coverage gap analysis to drive decisions on risk financing/transfer and alternative risk transfer solutions
  • Inform a more proactive approach to negotiating with insurance markets, particularly if you face challenges securing enough capacity for your physical climate risks.

Supporting climate disclosure reporting

Our physical climate risk analytical insights can both support your ability to integrate physical hazard management into your wider business strategy and help you meet evolving physical climate risk reporting requirements. These include International Financial Reporting Standards Standard 2 (IFRS S2), the EU’s Corporate Sustainability Reporting Directive (CSRD) and the Securities and Exchange Commission’s (SEC’s) climate proposal.

Outsmart physical climate risk uncertainty

We can help you quantify the impact of 20 different acute and chronic physical risk hazards across different emissions scenarios and over timeframes up to 2050. To understand underlying physical risk drivers and help you implement optimized risk management choices, we focus on physical hazard indices, rather than specific events.

Our analytical framework and robust climate scenario planning help risk professionals speak the language of finance and strategy. With transparent and credible data insights, your organization can better align physical climate risk management with financial strategy, giving business leaders the confidence to allocate resources to the optimal reduction, mitigation or transfer measures. We foster assurance and collaboration through transparency – we’re ever-ready to share the raw physical climate risk information and assumptions with you and your stakeholders.
With our risk analytics and expert consulting, you can make the calls that make your risk spend work harder, whether you spend it on physical climate risk reduction, mitigation or transfer. And by enabling you to present a scientifically robust insurance view on the impact of physical climate risks on your organization, you can present your physical risks more persuasively to insurance markets.

For a smarter way to manage physical climate risk, contact our experienced specialists.

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