Climate Searchlight

Our project aims to develop a web-based tool - Climate Searchlight - which allows investors, asset managers, asset operators and other stakeholders to make informed decisions regarding the climate risks that may affect asset portfolios or individual assets in the future. The tool will provide relevant information that will help the user to identify and assess the impacts of physical and transition risks relevant to their specific assets under different potential future climate change scenarios (e.g. RCP 4.5 (1.5 oC) and RCP 8.5 (2.3 oC)):

\*Physical risks -- higher global warming will result in increased levels of physical risks (e.g. flooding, extreme heat, high winds, drought, etc.) which will have significant impacts on physical infrastructure, productivity levels and global supply chains.

\*Transition risks -- reducing the future extent of climate change will require policy measures, technology uptake and social changes which will disrupt business and their underlying business models and revenue streams.

DNV has two comprehensive datasets/algorithms which are used for modelling physical risks and transition risks, C-GEAR and the Energy Transition Outlook (ETO) Model respectively. Both of these are large, data intensive and complex models which are continually updated. The project will therefore provide an opportunity for DNV to bring to market a user-friendly climate risk analytics software tool, Climate Searchlight, which will allow users to screen both the physical and transition risks which their assets face so that they can make informed investment decisions regarding the most appropriate climate adaptation measures and decarbonisation pathway options.

The tool also aims to raise awareness of climate related risks within client organisations and ignite business change through recommended actions and next steps.

DNV will run this project with support from the Beazley Group, an international provider of insurance and underwriting services. This will provide us with the opportunity to thoroughly test and prototype our product with a member of our target user-base to ensure that its specifications and outputs meet the needs of the users. In addition, DNV will develop a white paper to guide stakeholders on how to systematically model climate risks in their decision-making frameworks.