Why businesses need an ‘air service’ equal to the climate.
The findings are published in a prestigious journal, Nature Climate Changeand calls on businesses, the financial services industry and regulators to work more closely with climate scientists.
Both local and international regulators and governments are increasingly demanding that workplaces assess and disclose their sensitivity to the physical effects of climate change, such as increasing drought, fires, and rising sea levels.
“People make strategically important decisions on a daily basis and raise debt or capital to finance them, but the decisions may not have looked at climate risk properly,” said Dr, lead author from the University of Sydney School of Business. Tanya Fiedler.
“To assess the physical risks of climate change, businesses rely on climate models that are open to the public but complex. The problem arises when this information is used for financial risk assessment purposes, as the methodologies of those conducting risk assessments can be ‘black box’ and in some cases are secretly traded. This means that the market cannot create a picture. “
The paper’s co-author, Professor Andy Pitman of the University of New South Wales, said: “Businesses want to know which assets and operations are at risk of flood, cyclone or wind damage, but they use this information to provide information. global climate models are a struggle. Of course, there is a lot of useful information from climate models, but using it in work risk assessment requires a bespoke approach and a deep connection between work and climate models. ”
Professor Pitman, Director of the ARC Climate Extreme Center, added: “The type of model, how it is built, how changes in greenhouse gases are represented, and many other issues eliminate inattention. the time period is considered and how “independent” the different models are from each other. ”
A paradigm shift is needed to bridge the gap between science and trade.
Christian Jakob, a professor at Monash University and one of the co-authors of the study, said: “Climate modeling needs to be raised from a largely research-based activity to a level close to operational weather forecasting – a material and practical level. worth it for the job. ”
Without such an approach, the newspaper highlights some of the unintended consequences of misuse of climate data.
University of Sydney specialist Dr. “As with any form of decision-making, businesses can operate under a false sense of security that arises when non-professionals come to the conclusion that they can be protected,” Fiedler said. He said Accounting Discipline.
“Our research offers a new approach that is deeply intertwined between governments, business and science to create relevant information. Until that happens, the best bet is to go to a source – climate modelers. ”
Reference: February 8, 2021, Nature Climate Change.
DOI: 10.1038 / s41558-020-00984-6