August 28th, 2024
An interesting TEDx talk examining h0w – by leveraging massive data stores that can be parsed and used predictively in the same way investors rely on these insights for stocks and interest rates – climate risk can turn into financial opportunity:
The risk profiles of many real estate markets are rapidly increasing globally. Insurers and mortgage brokers are taking note and adjusting their offering based on widely available climate data and predictive analytics. John Macomber suggests that consumers and businesses should be leveraging this data, as well. As impacts of increased flooding, drought, wildfires, and storms are hitting people’s wallets, he points to the opportunities to make smart financial decisions weighing resilience and risk. By leveraging massive data stores that can be parsed and used predictively in the same way investors rely on these insights for stocks and interest rates, climate risk can turn into financial opportunity. And we can make better collective decisions about where to live and what to reinforce, adapt, rebuild, or abandon.
'Black Swans' are highly improbable events that come as a surprise, have major disruptive effects, and that are often rationalized after the fact as if they had been predictable to begin with. In our rapidly warming world, such events are occurring ever more frequently and include wildfires, floods, extreme heat, and drought.
'Green Shoots' is a term used to describe signs of economic recovery or positive data during a downturn. It references a period of growth and recovery, when plants start to show signs of health and life, and, therefore, has been employed as a metaphor for a recovering economy.
It is my hope that Black Swans / Green Shoots will help readers understand both climate-activated risk and opportunity so that you may invest in, advise, or lead organizations in the context of increasing pressures of global urbanization, resource scarcity, and perils relating to climate change. I believe that the tools of business and finance can help individuals, businesses, and global society make informed choices about who and what to protect, and I hope that this blog provides some insight into the policy and private sector tools used to assess investments in resilient reinforcement, response, or recovery.