Feb 26, 2021
Investor pressure is growing for companies and financial
institutions to assess and disclose their exposure to climate risks
such as wildfires, sea-level rise, hurricanes and other extreme
weather events. But in a new report, a handful of climate
scientists in Australia warn that many existing climate models are
extremely nuanced and were not designed with a business-specific
application in mind.
In this episode of the ESG Insider podcast, we explore the
challenges of using climate models in physical risk assessments. We
speak with two authors of the report: Tanya Fiedler, who is a
lecturer in the discipline of accounting at the University of
Sydney, and Andy Pitman, a professor at the University of South
Wales.
We also talk with Steve Bullock, Global Head of ESG Product Innovation and Analytics at S&P Global Trucost. Trucost assesses risks relating to climate change and natural resource constraints with aim of translating those climate models and other data into information companies can use. Steve says financial market participants need some insight into the magnitude of these risks so that they can begin to take action.
"Given the urgent need for action, having a blurry photograph of risk exposure is certainly better than having no visibility at all," Steve tells us.