Canadian data and analytics firm Riskthinking.AI believes that the financial impact of climate change is mispriced. To tackle this, it has built a climate risk solution that aims to help companies and financial institutions measure and manage climate risk and opportunities.
Riskthinking.AI seeks to provide forward-looking data and analytics to measure physical risk, transition risk, and financial impacts. The aim is to have all "credible climate projections of the future" accounted for - from the "most optimistic to the most pessimistic" - as opposed to a single forecast, it says.
To do this, Riskthinking.AI built two data platforms. The first consists of high spatial resolution climate and economic uncertainty projections for tens of risk factors at every location on Earth. The second consists of physical asset data that currently covers 13,000 parent companies, 200,000 subsidiaries, 40 global commodities, public infrastructure, such as highways, utilities, and water sources, and more.
This data and analytics are accessed via its software platform, VELO®, or a secure Application Programming Interface (API).
Ron Dembo, founder and CEO of Riskthinking.AI, said: "The power of our stochastic approach is that it uncovers blindspots others miss. In 2022, our methodology captured more than 90% of record-setting extreme weather events."
Dembo says users are able to analyse climate risk across entire corporate value chains, from supply chains to corporate subsidiaries and customers. In addition to factoring in extreme weather, the tool aims to help businesses understand how carbon prices and new regulations could also impact their strategy or investment decisions.
"We go way beyond a 'tick the box' solution to one that guides corporate strategy," he adds
Later this year, the firm plans to launch a suite of applications, the first being VELO.s2 in September 2023. VELO.s2 supports companies to comply with regulations aligned to International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures.
Dembo adds: "Collecting and organising data on global supply chains, operations, and the locations of customers is an incredibly difficult undertaking. I'm amazed by how our team of climate and data scientists, financial and software engineers, and AI specialists have worked together to solve this problem.
"I am especially humbled to experience the enthusiasm from our clients, some of the most esteemed companies in the world, who have chosen to augment their climate risk capabilities with our solution."