Early construction project engagement critical to mitigate climate risks

A panel during Commercial Risk’s Construction Risk Management Europe Conference urged construction companies to get technical experts involved much earlier in projects to help manage accelerating climate risks.

Stuart Large, business development director at Jupiter Intelligence, said many climate events are getting bigger and/or more frequent, with unprecedented losses becoming more and more common.

“There is an unfortunate reality, which is that climate change is accelerating so these events are becoming bigger, sooner,” said Large at the event held in association with UK risk management association Airmic, IMIA, LEG and the IRM. “I think it’s really important to factor this into the design and the project when you’re planning a construction.”

Clara Anthonysamy, senior risk engineer at Allianz Commercial, agreed that experts need to be brought in much earlier to help manage climate risks.

“Everybody is on the bandwagon to collect data, but how is that data being integrated, how is it being shared within industries, and are we having a dialogue early enough?” she asked.

Anthonysamy added that most of the time she will get a flood mitigation plan during a building’s operational phase but in 50% of cases there isn’t one during construction, because perhaps because it is not considered a major risk.

“It is why it is so important to try to get the client, the broker, the insurance engineers and the technical people to speak from the very beginning,” she said. “If we as insurance companies, as engineers, are involved from the very beginning of the design stage, we can say ‘it would be good if you can specify this in the tender’, because changing designs later is too difficult and too expensive.”

The broker on the panel, Sophie Burnoud, energy lead at Aon Climate Risk Advisory Service, stressed the importance of being engaged early at the site selection stage. “The due diligence process needs to go beyond the usual nat cat modelling and take into account climate risk modelling. What will this site look like depending on specific climate scenarios in ten or 20 years’ time?” she said.

Construction risk managers on the panel said there are big changes in the way they are approaching climate risk. Steven Carney, risk and insurance specialist at Copenhagen Infrastructure Service Company, said that rather than looking at past data, companies are now “moving more to predicting what is going to be happening, using climate tools, and then building that into the future investment”.

Nathalie Vandenbroucke, risk and insurance business partner at Invesis, said it is more important than ever to consider both short- and long-term climate risks.

“We have to collaborate within the company and also with external stakeholders more and more. The ESG partners also have to be involved and participate in the risk assessment. More collaboration will lead to more and more capabilities to tackle the climate changes,” she said.

Aon was the headline partner at our Construction Risk Management Europe conference. CCi a Rimkus company, Zurich, Allianz, QBE, Swiss Re Corporate Solutions, Hawkins, HDI, Scor, Wint Water Intelligence, Descartes and Fenchurch Law were also partners.

We will host our second Construction Risk Management Asia Conference in Singapore on 17 October. To find out more click here.