Aon climate change consultant Thomas Dent-Jones. Image: Aon
Aon climate change consultant Thomas Dent-Jones discusses how new tools can be used to address risks and find new opportunities for businesses.
While the climate crisis has become a bigger concern for most individuals, organisations are also taking note of the potential impacts it can have for business.
The changing environment can lead to supply chain disruptions, heightened risk of natural disasters and income issues as consumers focus their income on more climate-friendly businesses.
A recent climate report by Aon suggests natural disasters caused $313bn in economic losses last year, pushed largely by flooding events, drought and hurricane Ian.
While the potential impacts are growing, so are the tools that can be used to prepare for them. Thomas Dent-Jones is a climate change consultant with Aon, helping various clients diagnose the risks of the climate crisis.
He said data analytics around climate has “evolved rapidly over the past decade”. Not only has it grown to be a high priority for businesses and the public, but there has also been a “proliferation of climate model providers” that can provide data and insights for various sectors.
“This is coupled with the continuous development of models to provide likelier and more realistic outcomes – a vast improvement over their simpler box model origins,” Dent-Jones said.
“Several models now can take data provided by clients to show the impact on their assets, generating imagery showing where potential impacts are and providing summary statistics based on the data that went into the model.”
Dent-Jones said these models can be used to show what is driving loss within an organisation, to help them create “robust climate strategies”.
The data can also be used to create easy-to-understand dashboards by using data visualisation tools, to make it easier for those with “very little understanding of climate science to gain insight to their organisation’s risk”.
“However, there is still analysis that must go alongside this as the output of both the climate and financial aspects of these models are not certain,” Dent-Jones said. “We can use these analytics to identify trends, enhance risk mitigation, understand more about past and future risk, and understand new opportunities.”
Helping businesses prepare
Dent-Jones said these various tools and services can help “triage a client’s assets”, by assessing where the greatest potential impacts are and discussing methods to mitigate these risks.
Aon’s climate consultant gave an example where the Climanomics model was used to assess 500 building assets of a banking client. He said this data was then used to help the client make “informed decisions about climate risk”.
“What was rewarding, was that the risks identified already aligned with existing events (for example, flooding in Seoul or heat stress in Paris) showing that climate change impacts are already evident and being experienced by clients,” Dent-Jones said.
While the climate crisis has threats for businesses in the short term – such as new legislation and reputational damage – Dent-Jones said increased disruption is expected to create more costs in the long term.
When asked about tips for businesses, he said his “best piece of advice” is to start looking at the impacts the climate crisis could have and “act now to place it at the centre of your business model practice”.
Some measures to achieve this goal include creating an overview of climate-related risks and opportunities, disclosing the future impact of these risks, assessing these risks and creating “suitable metrics and targets to continue to evaluate and monitor businesses risks and opportunities”.
“Changes in global climate are resulting in greater economic losses year-on-year, and until organisations properly address climate strategy, they are not going to be able to address the climate crisis,” Dent-Jones said.
“This means focusing on where the greatest potential risks are (including property risk, risks in supply chain, legal risks, etc) and then managing and assessing that risk going forward.”
Dent-Jones also noted the benefits businesses can get from having a climate strategy, with many reporting a benefit to their brand value and others noting a positive financial impact from doing so.
In recent years, many companies have been pushing to get B Corp status, in order to show a commitment to sustainability efforts.
Future tech developments
Dent-Jones believes it is possible for organisations and humanity as a whole to mitigate the worst of the climate crisis, but “only with action now”. He also said the crisis could lead to benefits such as technological improvements and a push for resource efficiency.
“Humanity has proven to be remarkably resilient to change and has adapted to changing environments and climates throughout our history through to antiquity,” Dent-Jones said.
“Undoubtedly, climate change will affect some countries more severely than others and we must work to make sure that wealth inequalities do not leave some people suffering from climate gentrification.”
He said climate analysis presents benefits for all industries, but believes the technology industry in particular has a “huge opportunity” ahead of it.
“For example, we can use technology to assess damage from meteorological events within 48 hours, enabling us to rapidly measure damage,” Dent-Jones said. “Additionally, improvements in technology will benefit from climate data analytics by highlighting areas where our technology can be improved, therefore reducing the impact of climate change events on businesses in the future.”
Recently, IBM and NASA teamed up to try extract new insights from climate data, by combining AI models with large amounts of Earth observation data.
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