WTW launches climate risk technology tool

A new tool that quantifies the financial impact of climate change and evaluates the impact of climate risks on an organisation’s customers and supply chain partners has been launched by WTW.

According to WTW, the new service, Climate Quantified, is a Software as a Service (SaaS) online tool “using ground-breaking technology capable of quantifying the financial impact of climate change with an unprecedented level of precision”. It offers ‘anywhere, anytime’ access, transparently assessing how and when physical and transition risks impact a company’s operations and assets, through to their revenue and enterprise value, said WTW.

The broker said: “Assessing where a business creates value, and their exposure to a changing operational landscape from climate risks, brings a new level of clarity to support strategic and operational decision making.”

Climate Quantified analyses the interactions and interdependencies between climate risk factors and their impact on business models, including physical risks, supply chain vulnerabilities and regulatory changes. WTW said this offers a far more robust analysis of financial risk impact when compared to the more limited screening and assessment of emissions alone.

Peter Carter, head of climate practice at WTW, said: “Whether assessing the impact of drought, tropical cyclones, river floods or commodity price changes, Climate Quantified is class-leading in its ability to measure the physical and transition risks impacting a company’s assets and products. By combining advanced, high-resolution climate data with our in-house risk engineering, WTW offers a sophisticated solution that quantifies risk in financial terms.”

WTW said the service supports chief risk officers and chief sustainability officers with a focus on building resilience to physical risks and managing the transition to net zero. Climate Quantified:

• Enables companies to quantify the financial impacts of climate change on a portfolio of assets and products, whether owned or belonging to a third party (e.g. supplier);
• Quantifies asset property damage, business interruption and exposure value today and under future scenarios associated with drought (and water stress), tropical cyclone, riverine flood and commodity prices;
• Measures the impact of transition risk on revenue and costs, plus the impact of managing or passing those costs through to customers, for each product category and scenario;
• Supports business planning, due diligence, strategic decision making and compliance with evolving regulatory requirements (e.g. CSRD, IFRS).

Ben Fidlow, global head of core analytics at WTW, said: “Companies face increased losses from physical risk and are assessing the need for investment and transformation for the move to a low-carbon economy. Armed with a clear, transparent and real-time view of the financial risks to their business provided by Climate Quantified, companies are well placed to anticipate and respond quickly to emerging risks, make better investments, reduce their reliance on vulnerable locations, strengthen supply chains and protect their people. The outcome is to ensure capital is allocated at the right time to protect against climate-driven uncertainty and volatility.”