Category: MARCO

Analysing the European climate services demand – drivers of adaptation and recommendations

Analysing the European climate services demand – drivers of adaptation and recommendations

By Richard Bater

Climate change results in specific and uneven impacts that are dependent on the sensitivities of each sector and asset. Moreover, the risks associated with climate change raise implications throughout sector value chains and across asset lifecycles, from planning and design to commodity pricing and trading. The interconnected, geographically dispersed nature of much of today’s economic activity means that climate risks can rapidly cascade through global value chains, transforming and transmitting physical risks in one place into material, liability and other risks in other places.

The MARCO (MArket Research for a Climate services Observatory) project assesses the vulnerabilities and needs of different climate service markets, and the conditions that could enable the market to flourish in future. The overriding purpose of this analysis is to help climate-proof Europe through addressing gaps and vulnerabilities in Europe’s capacity to adjust to a new climate reality, and guide development of climate services that better meet these needs.

In partnership with LGi, Acclimatise has led a multi-national consortium to undertake deep-dive studies regarding demand for climate services for a range of sectors and regions across Europe. This work has resulted in a method for conducting risk-based market analysis of demand for climate services that can be replicated in any sector or region. Drawing on the insights of more than one hundred stakeholders, the sectors analysed by the project span Copenhagen real estate to Austrian alpine winter tourism, and also includes the first integrated analysis of the implications of climate change for legal services and its potential demand for climate-related information. Collectively, the sectors and regions covered by the studies account for €247.9bn of economic output and support 2.25 million jobs.

The full set of studies and synthesis report can be found at the end of this article.

Key results

It is shown that decreasing precipitation and higher maximum temperatures pose a risk the greatest number of sectors and regions studied. It is essential to note, however, that physical exposure and vulnerability to hazards are only one indicator of potential demand; compliance-driven climate risk disclosure obligations are likely to result in more generalised uptake of services catering to such needs.

Across sectors, the studies highlight two important lapses in governance that lead to climate risks being unmanaged. First, users often demonstrate a ‘proximity bias’; a tendency to attend to near-term risks or base decisions on historical experience, rather than on an awareness of risks expected to materialise now and in future. This can result in climate risk being viewed as a discrete, ‘horizon’ issue to be dealt with later, rather than a stressor of today’s risks that calls to be dealt with sooner.

This can give rise to at least three challenges. First, the unevenly felt and – with time – diminishing influence of climate events of decision making means that risks may lack systematic solutions, and may quickly slip down the agenda as other priorities come to the fore. Second, an absence of either experience of extreme climate events or legal duties to manage risks can result in latent risks being unmanaged and opportunities unexploited. Third, in either case chronic climate risks may be left entirely unexamined and unmanaged, despite these potentially resulting in higher liabilities being accrued in the long term.

Second, an absence of clear responsibility for managing climate risks, particularly in sectors typified by long or complex value chains, can result in risks to people or property being left unclaimed and therefore unmanaged. This can ultimately increase aggregate net risk to asset owners, reinsurers, and wider society.

Other key findings include:

  • Sectors best served by climate services are: water, energy, agriculture, urban planning, education, and forestry. These sectors tend to be ‘strategic’ or well provisioned by existing weather service providers.
  • Overall, there is a very low demand-side awareness of what climate services are, the benefits they may bring, or where they may be sought.
  • Far-sighted organisations are recognising that addressing climate change can help – rather than hinder – the realisation of existing strategic goals.
  • Studies identify several drivers of climate service use, as shown in the table below:
Why adapt?
Contribute to building the resilience of communities and ecosystems
Optimised risk pricing
Ensure resilience of operations, products, and services
Reduce the cost of material inputs
Ensure business continuity and realisation of strategic goals
Bolster credit worthiness, investor appeal, and insurability
Mitigate liability risks
Enhance intangible / reputational value
No-/low-regret adaptation fortifies organisation
Exploit emerging opportunities

Despite these advantages, across sectors the studies show that organisations are more likely to produce climate services and be ahead on building resilience if have one or more of the following attributes:

  • They have a long-term investment in their organisation or project;
  • They have direct experience of dealing with the impacts of climate hazards;
  • They own or operate large-scale fixed assets, often strategic in nature;
  • The public sector has a stake in the organisation, resulting that public policy priorities are brought to bear on an organisation’s governance and planning.


The market for climate services is in a state of flux, with evolving soft and hard regulatory frameworks driving demand for new types of climate services from new sectors:

  1. The EU High Level Expert Group on Sustainable Finance, the European Pensions Directive IORP II, and the Finance Stability Board’s Taskforce on Climate-related Financial Disclosures is bringing about change in the regulatory environment;
  2. Directors’, trustees’, and professional duties are evolving in light in respect of climate related liability;
  3. Climate change is increasingly viewed as a material financial risk and C-suite issue, as investors and others increasing expect to know the extent of corporate exposure to climate risks and the steps being taken to manage those risks;
  4. Increasing understanding of the material and reputational benefits of building resilience, such as improved operational performance over asset lifecycles and better managing investments in higher-risk assets (both transition and physical risk).

MARCO’s sector studies identified several recommendations to strengthen and harmonise the resilience building effort across Europe as well as better guide the climate services sector develop and scale advanced climate services that meet user needs:

  • Legislate for a clear, comprehensive, and harmonised legal framework for climate resilience that bring forward the time horizon for action on climate-related risk;
  • Design or upgrade plans, rules and standards that activate the framework at sectoral and regional levels in a coordinated but differentiated fashion;
  • Increase awareness – on both the demand and supply sides – about climate impacts at the level of specific sectors and regions;
  • Implement climate resilience strategies and measures at the level of each organisation;
  • Delineate responsibility for climate change adaptation or mitigation at the level of each organisation or project;
  • Continue to optimise climate services that meet the needs of end users;
  • Climate services should be demand-driven whilst being science-based. Prospective users are sensitive to the reliability and credibility of climate services, therefore appropriate quality assurance should be considered (e.g. professional charters).

Sectors covered:

  • Real estate (Denmark)
  • Mining (Europe)
  • Legal services (UK / global)
  • Renewable energy (Denmark)
  • Critical energy infrastructure (Germany)
  • Water infrastructure (Spain)
  • Urban infrastructure (Germany)
  • Agriculture and forestry (France)
  • Winter tourism (Austria)

You can access the MARCO Synthesis report here.

For more information, please visit You can also find MARCO on Twitter: @marco_h2020

MARCO Coordinator: Thanh-Tam Le, Climate-KIC

Partners: Climate-KIC (France), Acclimatise Ltd. (UK), Technical University of DenmarkFinnish Meteorological InstituteHelmholtz-Zentrum Geestacht HZG (Germany), INRA(France), Joanneum Research (Austria), kMatrix (UK), LGI Consulting (France), Smith Innovation (Denmark), UnternehmerTUM GmbH (Germany).

Duration: November 2016-November 2018. EU contribution: EUR 1,520,303.75

Cover photo by Mathias Eick EU/ECHO CC BY-SA 2.0
Reflections on Adaptation Futures 2018

Reflections on Adaptation Futures 2018

By Laura Canevari

This year, Adaptation Futures opened its doors in Cape Town from 18 to 21 June. As the city faced the strongest drought in decades, delegates gathered in the South African capital to discuss how climate-related problems, such as the one Cape Town is facing, can be solved and managed.

Starting on the Gold Coast in 2010, the biannual conference has been frequented by a growing and largely diverse community of individuals and organisations from around the world who are all committed to developing responses to the impacts of climate change across a wide range of themes.

During this year’s conference, strong emphasis was placed on the role of community- and network-led initiatives in Africa as well as on the role of international financing institutions bridging the adaptation-development gap.

Mobilising the private sector

Efforts to demystify international climate finance continue, and voices from the private sector were heard, expressing the need to build a stronger business case for adaptation solutions.

For example, it was made evident that in order for the private sector to invest in Ecosystem-based Adaptation and Nature Based Solutions, metrics need to be developed that help translate environmental and societal adaptation benefits into indicators of adaptive performance on which to monitor progress and success. Accordingly, we need to re-integrate the time dimension into these discussions and acknowledge that not all adaptation options are formulated to produce immediate results, and that a mix of short, medium and long-term solutions is needed.

From satellites to court rooms

On Wednesday, Acclimatise, together with Space4Climate and GEO, organised a World Café on applications of Earth observation data, collecting the efforts from 13 organizations facilitating discussions around 14 case studies on agriculture, cities, financial institutions, insurance, and health. Our combined efforts highlighted the need to combine EO data with socio-economic data in order to develop adequate narratives about the experienced impacts of climate change. A summary of the session can be found by clicking this link.

On Thursday, during a session focusing on “Resourcing Adaptation”, Acclimatise reflected on the results from two Horizon 2020 projects, MARCO and EU-MACS, noting that in order to mobilise private sector investment in adaptation, we need to develop adequate services for sectors where the demand for climate information is increasing.

In our presentation, we discussed the climate service needs of the financial and the legal sector, noting how increased attention and action on climate related legislation and litigation, as well as the emergence of voluntary and mandatory financial disclosure frameworks, have triggered an exponential increase in the need to develop climate services for these two sectors.

Consolidation and innovation: two key areas for future development

At Cape Town, the conversation remained generally vibrant across the halls and in parallel sessions, but there is scope for improvement on at least two fronts. On the one hand, future conferences under this biannual series should strive to motivate participants to consolidate knowledge emphasising the need to formulate better initiatives in the future. Last week, we saw numerous case studies showcasing “success” stories, however, mostly without in-depth analyses of adaptation-enabling factors or descriptions of the mechanisms that could be used to replicate and scale up solutions. Equally, there is still a lot of room for innovative ideas and solutions. An exploration on how other fields are innovating may help to uncover some hints on how to remain innovative in adaptation: words inundating the web such as artificial intelligence, blockchain, and the circular economy were missing from debates, yet they could enrich discussions around adaptation.

As noted in the opening plenary by Patrick Child, Deputy Director-General of the European Commission’s Directorate-General Research and Innovation, climate adaptation requires partnerships between researchers, innovators, and administrators. Partnerships that combine the experiences and skillsets of different actors are highly needed and should be framed around specific aspirations on adaptation outcomes. Efforts over the next two years should focus on nurturing these types of partnerships in order to create an enabling environment for adaptation innovation and consolidation.

Cover photo by Marlin Jackson on Unsplash.
Low awareness of climate risks hampering resilience of critical infrastructure sectors claims new study

Low awareness of climate risks hampering resilience of critical infrastructure sectors claims new study

Low levels of awareness of climate risks and the availability of climate services are significant barriers to climate adaptation in the electricity sector, according to new research from Germany. However, the research also finds that the underlying market opportunity for climate services remains strong.

Damage to a critical infrastructure, its destruction or disruption by for example natural disasters, will have a significant negative impact on the security of the EU and the well-being of its citizens. Focussing on the German electricity sector, the report found that stakeholders in the sector claimed to need seasonal forecasts and decadal predictions, the latter aligning closely with energy companies’ time frames for strategic planning. However, despite this, there is currently a low level of demand for climate services from the sector.

The report found that four major barriers prevented the uptake of climate services:

  1. low awareness of the climate-related risks,
  2. low awareness of the benefits climate services can provide,
  3. mismatches between the required and the available timescales and spatial resolution of data and
  4. a lack of trust in the reliability of data.

In order to overcome these hurdles, the report recommends that considerable work needs to be done in the first instance to increase the visibility of the climate services industry and how it can contribute to the climate resilience of key sectors. It proposes that a ‘Climate Service Provider Store’ is created to provide information about where appropriate climate service providers are available.

Additionally, the case study recommends that work continues to ensure that seasonal and decadal forecast become ever-more accurate and that regional cooperation between industry networks and climate services providers are strengthened.

The case study was led by the non-profit research organization HZG under the MArket Research for a Climate Services Observatory (MARCO) programme of which Acclimatise is a proud partner. MARCO, a 2-year project coordinated by European Climate-KIC, hopes that research such as this will help to remove the barriers to the growth of the climate services industry across Europe.

Download the full case study “Critical Energy Infrastructureshere.

Download an infographic highlighting the key findings of the case study here.

Cover photo from pxhere (public domain).