Why Climate Services for the Financial Sector?

The global climate is changing and local variability in climate can be surprising. This entails both risks and opportunities for the many different actors in the financial sector. So far, the rising attention for climate in the financial sector tends to overlook physical risks. The progress in climate science and modeling, the vast and growing amount of open data, and the opportunities to combine and analyse a large variety of data provide ever-expanding possibilities to better assess impacts of climate change and climate variability on projects, assets, trade, and production.

A climate service is the transformation of climate-related data – often together with other relevant information – into customized information products, offered as such or embedded in consultancy and/or education.

For the financial sector, it gets now ever more attractive to exploit the new information to sharpen risk management and identify potential for new financial products. For example, the insurance sector is doing that already, although for that sector still, a vast potential is unused. So far, the most advanced users of climate services are international development banks. These guidelines are specially written for all other sub-sectors for whom climate services are still a new information product.