Climate Hazard Exposure - How Climate Models Play Their Part

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We firstly look at the climate hazard exposure. We then look at the financial impact of that exposure and we apply it to assets and companies. So things like extreme heat, wildfires, water stress, droughts, sea level rise and so on and so forth. There are areas of the world that are exposed to these issues in different ways. And what we're doing is looking at the map of the world and we're estimating how those climate hazards will change through time on the different scenarios.

The U.N. climate conference known as COP27 kicks off next week. Adaptation to a changing climate will be an important part of the talks.

In this episode of the ESG Insider podcast, we look at how companies and investors are using climate modeling to measure and manage the future financial impacts of climate hazards such as wildfires, drought and flooding. According to a new S&P Global Sustainable1 dataset, 92% of S&P Global 1200 companies will have at least one asset highly exposed to physical hazards by the 2050s under a business-as-usual high-emissions scenario.

We speak to David Carlin from U.N. Environment Programme’s Financial Initiative, where he leads the Task Force on Climate-Related Financial Disclosures (TCFD) program for banks and investors.

We also talk with our colleague Steven Bullock, Global Head of ESG Innovation and Solutions at S&P Global Sustainable1, who says the increasing demand for climate data created with the help of climate models reflects the growing recognition that ESG is a driver of corporate business value and financial risk.

And we hear from Alban Pyanet, partner at consultancy Oliver Wyman, about how climate modeling helps financial institutions manage climate risk.

Listen to our previous episodes discussing how central banks are using climate stress testing here: https://www.spglobal.com/esg/podcasts/how-central-banks-help-combat-climate-change-an-interview-with-ngfs-chair-ravi-menon

We'd love to hear from you. To give us feedback on this episode or share ideas for future episodes, please contact hosts Lindsey Hall (lindsey.hall@spglobal.com) and Esther Whieldon (esther.whieldon@spglobal.com).

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