Frequently Asked Questions
Discover all the common questions we encounter at Climate X, relating to who we are and the climate solutions we provide.
Climate Risk relates to the potential impact of climate change on the global annual economic output. The warming planet is a key risk to global financial institutes, with a need to understand the direct risks climate change poses for clients and portfolios to safeguard financial businesses. Moreover, indirect impacts of climate change on the financial sector can occur through regulatory policies organisations must comply with.
The risks of climate change can be divided into two categories: Physical Risks and Transition Risks. These two types of risk can impact financial stability in different ways.
Physical Risks refer to the physical impacts of climate change in the form of natural disasters and damage to homes, business disruption and loss of lives. Physical Risks could be both acute and chronic.
- An increase in the frequency and severity of extreme weather events drives acute physical risks. Examples are storms, flood, wildfire among others
- Chronic physical risks are related to more progressive and longer-term shifts in climate patterns over time. Examples are rising average temperatures and ocean acidification.
Transition Risks refer to societal changes arising from a low-carbon economic transition. This includes clean energy technological advancements, shifts in consumer sentiment and investor sentiment, and climate policy interventions that can have risky carbon-intensive financial exposures. For example, regulators could promote emission reductions through new policies, while investors challenge firms that are not factoring the effects of climate change into their business decision-making.
Climate Risk Data
The easiest ways to access our proprietary climate risk data are:
- via our online self-service platform Spectra, or
- via our customisable API to easily integrate data with your existing systems to power dashboards and widgets.
Spectra is our front-end user climate risk data tool delivering location-specific risk ratings and loss estimates for extreme weather events linked to climate change through to the year 2100 under multiple warming scenarios (RCPs & SSPs).
Assess your portfolio in a matter of minutes when using Spectra:
- Upload a .csv with up to 500k addresses
- View your portfolio overview as well as asset-specific risk assessment
- Download your PDF bespoke report [see a sample report]
- Export the data as a CSV or feed the data into your existing software/BI platforms (Tableau, Power BI, QlikView, etc.)
Spectra's report is generated on-demand and includes all the data and methodology that support the results.
When using Spectra, you earn access to actionable data for climate resilience:
- Score and risk volume distribution at an asset and portfolio level for 17 physical risks, including various attributes for each risk, including confidence, probability and severity (e.g., the depth of a flood in metres or the rate of subsidence in cm)
- Scenario-linked transition costs, including EPC mapping at an asset and portfolio level for UK & EU regions, with retrofit costs.
- Physical and Transition risk annual losses in monetary value and percentage
- Company-wide business disruption risk, factoring decline in labour productivity and infrastructure disruption.
For residential properties, we provide data at flat or unit level.
We can account for flood defences as an adaptation measure for each scenario and timeline. In the platform settings, you can choose to see a 'defended' or 'undefended' flood scenario.
We have a transparent methodology approach and include our source documentation with every report. We also provide confidence scores for each hazard.
We use a combination of CMIP5 and CMIP6 models and select the best-performing models depending on the variable or hazard of interest. We use a mix of remote sensing, publicly available databases and machine learning for our loss modelling.
All our model outputs have been validated by comparison with real-world data, modelling phenomena of the past to evaluate how well our model reproduces real-world events. Our methods are developed and vetted by world-renown academics and research institutes. As part of our report, you always get our methodology and regional accuracy.
Based on the disaster risk used by the IPCC, we break down an asset's Expected Annual Losses due to physical risks as follows:
- Hazard: extreme weather events affected by climate change in their probability and magnitude. This means that extreme weather events could become more or less likely and damaging, depending on the hazard and the geographical area.
- Exposure: we calculate the asset's exposure to a specific risk based on location.
- Vulnerability: asset vulnerability depends on elements such as asset type (building, infrastructure), use (commercial, residential, office etc), and properties (age, building materials).
Our loss methodology for transition risk is aligned with CCREM (Carbon Risk Real Estate Monitor), and it calculates the total cost of excess emissions vs the C-rating emissions cost, from the current year to the target.
Climate Risk Reporting
Yes, with our data, you'll have a portfolio and asset-level view of climate risk across a variety of asset classes and functions, suitable for internal risk reporting. Running a risk report would take you less than five minutes.
Yes, our granular climate data can be used for effective regulatory compliance and alignment with the evolving landscape - for example:
- TCFD & EU Taxonomy
- ECL / ICAAP / IASB / IFRS S2
- GRESB / CRREM / Article 8/9
- Stress testing/scenario analysis requirements
- Annual Reports
While Spectra boasts one of the most advanced and friendly user interfaces capable of loading over a million assets at a time, it is designed to give you the information that matters to you; our data can be extracted from our climate risk engine via:
- .csv data files: This method boasts comprehensive data and asset-level with losses detailed right down to hazard type per asset.
- Business Intelligence Platforms: Tableau, Power BI Enterprise, QlikView, etc.
- Enterprise API: Get practically unlimited data you want right into your existing in-house platform(s).
Climate X and the team driving it
Climate X is a climate risk data and analytics provider that helps organisations become more resilient by quantifying the probability and severity of weather events at an asset level, decades before they happen.
Climate X has developed Spectra, an enterprise-wide solution serving service retail, wholesale, risk, and finance teams in the banking and real estate industry through one platform, and as one provider.
The CEO of Climate X is Lukky Ahmed, who is also co-founder with Kamil Kluza. They combine 30 years of experience working internationally for leading Global Banks and Tier 1 consulting groups such as HSBC, Barclays, Accenture, Lloyds Banking Group and others.
We have two primary locations, with our Headquarters located in London, UK.
- UK address: 21 Great Winchester Street, London EC2N 2JA.
- US address: Rockefeller Center, 1270 Ave of the Americas, New York NY 10020.
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