Woodard & Curran is supporting a global industrial client in assessing and mitigating physical risk related to climate change. Our approach combines climate risk algorithms, climate model downscaling, data management, resilience strategy, and engineering capabilities to deliver critical insights about the client’s climate-related liabilities as well as actionable recommendations for asset hardening, long-term compliance, and business continuity.
In line with our recommendation, our client began a pilot program to perform a broad evaluation of climate risks and opportunities in early 2020 and incorporated these findings into its business risk and planning process. However, the company’s substantial and globally distributed portfolio merited a more localized and quantitative approach that would support prioritization of capital spend.
The best tool to quantify climate change impacts for a globally distributed portfolio like our client’s facilities is Global Climate Model (GCM) output. Woodard & Curran has developed a library of GCM ensemble output and statistics from the Coupled Model Intercomparison Project Phase 5 and Phase 6. Our team leveraged these data to analyze individual facility locations based on essential climate variables and climate stressors.
In keeping with the Task Force for Climate Financial Disclosures, the project team evaluated the worst-case climate scenarios to determine the potential climate change impact at each facility. We quantified and tabulated relative risk due to individual climate stressors and statistics for all facilities evaluated and ranked them from highest to lowest to support prioritization of risk mitigation actions.
With hundreds of facilities in 70 countries, spread across six continents, the volume of climate data we collected and analyzed on behalf of our client was immense. To ensure the client could quickly access meaningful and relevant information, Woodard & Curran developed a data visualization dashboard with geo-referenced site locations and interfaces to the risk rankings.
Using the dashboard, our client can query the evaluated facilities and climate risk database toward a detailed and comprehensive understanding of climate change’s impact on the global portfolio. The dashboard interface allows on-the-fly analysis of all evaluated sites filterable by dimensions like climate stressor, region, and outlook term. In addition, the client’s metadata for each facility was incorporated, allowing climate risk rankings for business units, geographies, market sectors, and facility types.
Satisfied with the report and interface our team created, the client has requested further assessment of its 10 highest-risk sites. Woodard & Curran is performing refined vulnerability assessment using downscaled climate risk engine tools, and leveraging information gathered to propose a resilience strategy for each targeted facility.
While initial assessment was localized to the point of understanding overall climate risk for each facility, this refined assessment differs in its ability to pinpoint vulnerabilities in specific areas and assets within the client’s facilities. For example, because of design, position, and elevation within a plant, critical equipment in one part of a facility may be at greater risk of failure than other assets.
With these detailed reports in hand — and the data within incorporated into the existing dashboard tool—the client is empowered to make informed decisions in the planning of capital improvements to enhance resilience and sustain business continuity. Given our familiarity with the data, facilities, and our client’s goals, Woodard & Curran’s in-house engineering experts are available to partner with at-risk facilities to identify solutions, estimate engineering and construction costs, and design resiliency projects.