Acclimatise participates in Geneva Association 2019 Climate Change Forum

Acclimatise participates in Geneva Association 2019 Climate Change Forum

By Robin Hamaker-Taylor

The Geneva Association, the global association of insurance companies, held its 2019 Climate Change Forum on July 11 and 12 in London. Titled, ‘Advancements in Modelling and Integration of Physical and Transition Climate Risk’ the Forum aimed to build a roadmap for advancing both physical and transition risk modelling for insurance, investment and asset management decisions.

Acclimatise’s Chief Technology Officer and Co-founder Dr Richenda Connell participated in the Forum, presenting the broad range of ways that both chronic climate change and extreme events can affect the performance of investments. In her presentation, she challenged the perception that physical climate-related risk to investment performance is just about property damage from extreme events. She emphasised that physical climate-related risks need to be evaluated along the full investment chain, including at the macro-economic level, and throughout a company’s value chain. Though the insurance sector already has a well-established set of risk analysis tools and models for extreme events damage, the Forum suggested these could be improved by better integrating insights from other sectors and experts such as this.

Maryam Golnaraghi, Director of Climate Change and Emerging Environmental Topics at the Geneva Association commented: “Mainstreaming climate risk is becoming a high priority for Boards and C-level suite executives with implications for accountability, corporate strategy, risk management, operations, investments as well as disclosure and reporting. There is a unique opportunity to enhance climate risk modelling and stress testing by leveraging the latest climate science. This Forum was an important step toward achieving consensus among leaders from 10 sectors on aligning priorities on a research and development agenda for the future.”

Several other lessons emerged from the 2019 Forum pertaining to the further development of the next generation of risk models, as highlighted by the Geneva Association. Cross-sectoral collaboration is necessary for this to happen, for example, and there is a need for common definitions to enable collaboration. Terms such as resilience, scenarios, and stress-testing may have different meanings for different stakeholders, so a mutually agreed definition should be reached. It emerged that the need to bridge the gap between science and technological development and financial and business decisions remains as pressing as ever. Finally, discussions at the Forum suggested that surveying existing climate risk modelling initiatives and identifying potential areas of cooperation are important next steps.

Cover photo by Robert Bye on Unsplash.

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