Climate change poses a serious risk to businesses globally, but which of the facilities are at the highest risk, and in what ways? And how can users best protect their business and ensure users prosper in the future?
FM Global answered these questions for policyholders by introducing two new first-of-their-kind climate resilience products: the FM Global Climate Risk Report and the FM Global Climate Reporting Aid. Both are available to FM Global clients, which include many of the world’s largest organizations, including one of every four Fortune 500 companies.
Climate-related losses
Climate-related losses at commercial properties with the highest climate risk are 30 times more likely to occur and be 180 times more severe than at properties with the lowest climate resilience, according to FM Global research.
“We’ve analyzed losses from climate risk and the value of climate resilience,” said Randall E. Hodge, executive vice president, of staff insurance operations, at FM Global. “These new climate resilience products provide our clients with informed guidance from which they can prioritize their climate-risk-mitigation investments, ultimately leading to a more resilient tomorrow.”
Risk prioritization
A client’s score is based on both actionable risks, those that can be mitigated by actions
The Climate Risk Report scores each client organization based on the actions they have taken to address climate risk and their unique exposure to events like floods, windstorms, hail, and wildfires.
A client’s score is based on both actionable risks, those that can be mitigated by actions like installing flood barriers, and inherent risks, such as exposure to extreme weather. This information helps CEOs, CFOs, chief sustainability officers, risk managers, and other business leaders prioritize their most critical investments in climate resilience.
Climate Risk Report
The Climate Risk Report is based on billions of property-risk data points FM Global has collected in more than 60,000 engineering visits each year to client sites. The report is also underpinned by artificial intelligence, machine learning, and predictive analytics to help clients prioritize their risk improvement efforts.
The Climate Risk Report complements FM Global’s recently announced Resilience Credit, a 5% premium offset to FM Global policyholders. Those companies can invest the credit which totals approximately US$300 million across FM Global’s client base in priorities identified in their Climate Risk Report. It has the potential to help those organizations reduce total loss expectancies from those exposures by more than US$120 billion.
Help with ESG reporting
Climate Reporting Aid is a guide that helps clients disclose acute and chronic climate-related financial risks
The second new product, the Climate Reporting Aid, is a guide that helps clients disclose acute and chronic climate-related financial risks to investors and the public, according to widely-adopted frameworks like the International Task Force on Climate-related Financial Disclosures (TCFD), consisting of representatives from across the G20.
“We are learning from our clients, and in particular from their chief sustainability officers, that this data is very valuable in completing these financial disclosures, and that data can be difficult and costly to obtain otherwise,” said Hodge.
Climate risk disclosure
Climate risk disclosure is an integral component of reporting on environmental, social, and governance (ESG) factors, a pressing responsibility for global organizations. Data from a custom Climate Risk Report can support reporting on climate-related opportunities and planned actions toward greater climate resilience.
The Climate Risk Report and Climate Reporting Aid also will be provided to policyholders of AFM, FM Global’s middle-market business unit.
A set of climate resilience products
These new products bolster a climate portfolio that includes the publicly available FM Global Resilience Index. The online index ranks the relative resilience of the business environments of nearly 130 countries and territories and includes interactive climate risk and ESG filters.
Predictive Climate Change Impact Report that will provide insights on clients’ unique chronic risk based on the evolving impact of climate change on perils such as drought, extreme temperatures, increased precipitation, intensifying winds, and rising sea levels.