Humanity is changing the climate which affects the oceans, especially through rising sea levels. Financial institutions need data to know about the physical risks to their coastal assets from sea-level, in order to make adaptation decisions.
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Large asset values and significant infrastructure sit in the pathways of tropical cyclones. Financial institutions and asset managers need data to know about the physical risks to their coastal and inland assets from tropical cyclones. Then, they can make informed and successful adaptation and retrofitting decisions.
The Federal Reserve recently conducted its inaugural climate scenario analysis with six of the nation's largest banks, aimed at evaluating their climate risk management practices. It revealed significant vulnerabilities, as well as common challenges with data quality and modeling methods.
Tropical cyclones can be an asset manager’s nightmare. From zero to catastrophe in a matter of days, leaving huge swathes of infrastructure as rubble in its wake. While the physical risks might have been understood fairly well in recent decades, tropical cyclones and their risks are being modified by human-caused climate change.
The Sustainable Development Goals and climate change action are often separated, with action on one risk potentially causing other problems. By combining sustainability and climate change efforts, we can effectively mitigate overall risk.