March 14, 2022
Climate Change is the New Normal
We are already observing the impacts of climate change. The character of extreme weather events such as heatwaves, extreme cold spells, flooding rain, blizzards, droughts, and wildfires are changing. Thanks to climate change, the past is not a prologue for future extreme weather events. Business planning should account for forward-looking assessments of extreme weather instead of relying on their experience of past events.
Impacts from climate change will vary dramatically from place to place around the globe. It’s not one-size-fits-all. Impacts will be highly localized. Business planning must account for their specific geographic footprint. Climate Report is a Wakeup Call for Business Leaders
Climate change is transforming ordinary weather and creating extraordinary issues and new impacts on your climate-linked economics.
Extreme Weather, Extreme Costs
With extreme weather comes new and increasing costs. In 2021, there were 20 events with total costs over $1-Billion. 14 of those events cost between $1-Billion and $2.5-Billion each. At Demex, we call these extraordinary weather events “Kits” to distinguish them from larger natural catastrophes (aka “Cats”) which cost over $2.5-Billion each.
In the entire decade of the 1980’s there were 29 events costing over $1 Billion each. In the 2010’s there were 123 and, in 2020 coupled with 2021, we’ve already observed 42.
Because of increasingly volatile weather, ESG+R programs are no longer optional. Effective climate risk management is a requirement.
More and more companies are examining their exposure to climate-related risks. Credit rating agencies, government regulators, investors, and the Task Force on Climate-related Financial Disclosures (TCFD) are all directing companies to understand and manage their Climate Linked Economics. Business leaders, investors, and regulators are demanding increased transparency on climate impacts.
The Securities and Exchange Commission (“Commission”) is proposing for public comment amendments to its rules under the Securities Act of 1933 (“Securities Act”) and Securities Exchange Act of 1934 (“Exchange Act”) that would require registrants to provide certain climate-related information in their registration statements and annual reports. The proposed rules would require information about a registrant’s climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition. Under the proposed rules, certain climate-related financial metrics would be required in a registrant’s audited financial statements. Specifically, we are proposing that impacts on any relevant line item in the registrant’s consolidated financial statements during the fiscal years presented arising from severe weather events…
Delivering Climate Resilience
Our team is the first to develop a comprehensive approach to climate risk management. We’ve brought together decades of experience across tech, finance, risk management, capital markets, insurance, and climate science.
We instantly crunch millions of weather time series to assess every point around the world. We integrate big data and scalable analytics to develop actionable climate risk management across an unlimited offering of financial instruments globally.
We don’t just assess risk, we help you manage it.
- Model: Our machine learning platform creates detailed views of weather exposures across your portfolio
- Assess: Using your relevant financial data, Demex shows you the financial impact of climate extremes on your portfolio
- Manage: The Demex approach relies on a foundation of market risk pricing at every stage of your portfolio evaluation
1. Model: Your Portfolio Weather Exposure
Our machine learning platform creates detailed views of weather exposure at every location across your portfolio:
- We create parametric models for every element of your portfolio, calibrated to your individualized data
- We use market-based risk pricing to quantify the financial impact of weather variability
- We identify portfolio components where weather risk poses risk to asset value and operating income
2. Assess: Your Climate Linked Economics
Using your relevant financial data, Demex shows you the financial impact of climate extremes on your portfolio.
- We measure the changing climate at every element of your portfolio
- We appraise the baseline impact of extreme weather events on your portfolio over history
- We appraise your Climate Risk between the baseline impacts and impacts that include climate change
3. Manage: Your Resilient Portfolio
The Demex approach relies on a foundation of market risk pricing at every stage of your portfolio Appraisal:
- We integrate parametric solutions throughout the process, from modeling to assessment to management
- We create market-based risk transfer solutions calibrated directly to your portfolio data and unique weather exposures
- We deliver effective mitigation strategies balancing the cost of unhedged weather risks against the benefit of risk management
Climate Risk Appraisals from Demex directly address future business performance. Lenders appraise climate-driven shifts for risk of borrower defaults. Business owners appraise climate-driven shifts in costs and revenue. Investors appraise climate-driven shifts in projected returns across their portfolios. Appraisals form a pathway toward Demex derived parametric insurance and climate hedging for complete financial solutions. Learn about Demex Climate Appraisals
Demex developed new insurance options to protect policyholders following extreme weather. These solutions are parametric, meaning that claims and payments are automatic. Demex technology also directly integrates with insurance carriers who are developing and deploying new weather insurance. Learn about Demex Extreme Weather Insurance
Demex snow solutions for property managers drive comprehensive budget planning. We custom-fit winter weather management solutions that account for hyper-local snowfall patterns across your portfolio as well as the unique cost profile at each property. Our customers save 10-40% on snow removal costs. Learn about Demex Snow Solutions
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