Physical climate risk assessments - how to meet clients’ requirements for non-financial reporting in a standardised process

Abstract

The climate is changing, and not for the better – this is old news and will surprise nobody. Immediate action to mitigate and adapt to climate change is necessary on all scales from single households to the continental level, including companies.  In recent years, governments worldwide have been expanding their policies to evaluate the environmental sustainability of economic activities, particularly by asking big companies to assess both their effect on the climate and the climate’s effect on them. This has, in some cases, been formalised under official regulations, such as the ”Corporate Sustainability Reporting Directive (CSRD)” or the “EU taxonomy regulation (2020/852)” of the European Union. Advances in climate prediction have been helping generate increasingly detailed and confident information on the climate means, variability, and extremes in the future, providing a basis for the assessment of climate hazards at company locations. However, stakeholders outside the atmospheric sciences will need assistance in interpreting the data and reducing it to key information related to physical hazards. The process from climate model prediction output to actionable information, used in support of decision-making, is a new climate service provided by meteoblue AG.  While the topics for which the risk should be evaluated, for instance for the EU taxonomy, are clear, several issues remain. Firstly, climate projections at a local scale are not straightforward to obtain, and they are generally not suitable for products that need to be inter-comparable worldwide. Secondly, regulations require the assessment of single topics for which even the present hazard is unknown or the uncertainty in the future evolution remains high. Thirdly, the topics go beyond what is explicitly covered by climate models. All these issues need to be appropriately addresses and resolved in standardised processes to provide a product that is valid for any possible company location worldwide. In this presentation we will focus on how we tailor climate data to meet the clients’ requirements to be able to assess the climate risks at their locations, plan accordingly and pass mandatory company audits related to climate change.