Climate risk and the financial sector

Climate change means that the future will not be like the past. We are already experiencing changes in the severity, frequency and location of extreme events, such as storms and heatwaves.

A changing climate brings risks for the financial sector, as well as potential opportunities. The same is true for many other sectors of the economy at national and global levels.

“Climate change poses risks for the stability of the financial system, particularly for the insurance and banking sectors”

Bank of England

Earth observation data, coupled with models and ground based measurements, can provide detailed insight into past and future environmental conditions.

Used skilfully, such data offer many opportunities to inform the financial sector about climate risk and assist decision making, such as:

  • Evaluation of risks and exposure for insurance, supply chains and manufacturing
  • Investment decisions
  • Climate risk disclosure and environmental compliance

However, the volume and complexity of the data represents a barrier to its use.

Assimila have detailed knowledge and understanding of Earth observation and climate model data. We can help you realise their value.

Space4Climate Risk Disclosure Task Group

As a member ofthe Space4Climate Climate Risk Disclosure Task Group we are:

  • exploring how satellite-derived climate data can help the finance sector in making climate informed disclosures and decisions
  • creating climate risk metrics
  • developing decision support tools
Actuarial climate index

Working with the European Actuarial Climate Index Working Group (EACI WG), the Space4Climate Climate Risk Disclosure (CRD) Task Group is:

  • developing a European Actuarial Climate Index –similar to the existing North American and Australian indices
  • exploring a probability-based index –to effectively show range of possible conditions
  • investigating a climate risk index –which would link physical climate risks economic and social exposure/vulnerability
Climate index demonstrator

Take a look at our climate index demonstrator

Use it to look at long-term changes in, for example, weather extremes such as temperature, rainfall, wind and sea level.

Such analysis tools are just the beginning, and could be developed into tailored decision-support tools.