At the intersection of climate change, big data, artificial intelligence and machine learning, there is extreme potential. Expert insights are required for organizations to understand and utilize the best available technology to assess and manage their climate risks and opportunities. This post highlights few tools on our radar.
“Explore the sustainability of the world’s biggest companies”
S-Ray is a tool that monitors the sustainability of over 7,000 of the world’s largest corporations, by systematically combining over 200 environmental, social and governance (ESG) metrics with news signals from over 50,000 sources across 20 languages. It rates companies on the normative principles of the United Nations Global Compact: Human Rights, Labour Rights, the Environment, and Anti-Corruption (GC Score). The tool also provides industry-specific assessments of a companies’ performance on financially material sustainability criteria (ESG Score). Both scores are combined with a preferences filter to better understand each company’s business involvements.
You can try the tool here.
Carbon Delta: Climate Value-at-Risk
“An assessment method to quantify climate change risks in a framework that is applicable across investment portfolios.”
Carbon Delta’s Climate Value-at-Risk (VaR) measure is a forward-looking risk measure for analyzing climate-related risks and opportunities of companies. It is closely aligned with the TCFD recommendations and provides true insight in to how climate change is affecting the future business model and operations of companies. The big data software model is highly scalable and currently covers 22,000 companies linked to 60,000 investable securities. This risk measurement helps investors to comprehensively assess future costs related to climate change and understand what those future costs could mean towards the current valuation of securities. The premise of Climate VaR™ is to aggregate costs related to specific climate risks over the next 15 years and calculate what these costs might signify about financial performance into the foreseeable future.
“Blends economic modelling with climate science to help you reduce risks, identify new opportunities, and build resilience in the face of climate change.”
Four Twenty Seven provides market intelligence on the economic risk of climate change for businesses, financial institutions, and governments. This helps to understand how to quantify and monetize climate change impacts on operations as well as social factors that affect their value chain. The two tools that we want to highlight are:
- Data Products: Climate risk scores for a wide range of listed instruments in equities and fixed income markets. The analysis leverages climate data at the most granular level and scores assets based on their precise geographic location.
- Portfolio Analytics: Powered by proprietary databases and research, the instantly accessible analytics provides financial institutions with unique insights into the impacts of climate change on their portfolios.
Google Earth Engine’s Public Data Archive
“Google Earth Engine’s public data archive includes more than forty years of historical imagery and scientific datasets, updated and expanded daily.”
Earth Engine is a platform for scientific analysis and visualization of geospatial datasets. The platform hosts satellite imagery and stores it in a public data archive that includes historical earth images that dates back more than forty years. The images, ingested on a daily basis, are then made available for global-scale data mining. The searchable data catalog, includes datasets on climate and weather: surface temperature, climate, atmospheric and weather data. Users can also upload their own data for analysis in Earth Engine, with full control over access.
Earth Engine also provides APIs and other tools to enable the analysis of large datasets. The platform is free for research, education, and non-profit use; however, commercial applications require paid license.
Case Study: Studying Global Forest Cover Change
A research team from the University of Maryland used Earth Engine to survey over a decade of global tree cover extent, loss, and gain. The study High-Resolution Global Maps of 21st-Century Forest Cover Change, analyzed nearly all global land (128.8 million km2equivalent of 143 billion pixels of Landsat data at a thirty-meter spatial resolution), excluding Antarctica and some Arctic islands.
Google’s Environmental Insights Explorer
“Impact begins with insights. Explore data to make informed decisions and inspire action.”
The Environmental Insights Explorer analyzes Google Maps data to provide insights such as building and transportation emissions, rooftop solar potential and climate projections. These city-specific environmental data are accessible to the public and can be used to understand GHG emissions and opportunities for reduction.
“Predicts risks of natural perils from severe weather and climate change”
Jupiter offers separate services for predicting specific perils. Each service is built on top of the Jupiter ClimateScore™ Intelligence Platform. Services are currently available for predicting the probability of extreme temperatures (HeatScore) and flooding (FloodScore). Its pioneering cloud-based architecture links data, probabilistic and scenario-based models, and advanced validation in an integrated environment. As an example, a map of Charleston, SC (shown below) generated by Jupiter forecasts flooding from storm surges that have a 1 percent probability of occurring annually by 2030 under a high-end emissions scenario.
Ortec Finance – Climate & ESG Solutions
“Integrate sustainability across your strategic investment decision-making”
Ortec Finance’s Climate & ESG Solutions applications combines research-backed environmental, social and governance (ESG) and climate insights with the standard investment process modelling and analysis. As part of the fiduciary duty and broader responsibility of investors, climate change is a growing risk that needs to be addressed. Ortec is developing applications for climate integration with their economic scenario generator, and asset liability management, risk monitoring, and performance attribution tools. These applications support better integration of climate in the investment and allows for companies to adapt to climate-related regulations, such as reporting as per Task Force on Climate-related Financial Disclosures (TCFD).