Emerging awareness of climate-related financial risk has prompted efforts to integrate knowledge of climate change risks into financial decision-making and disclosures. Assessment of future climate risk requires knowledge of how the climate will change on time and spatial scales that vary between business entities. The rules by which climate science can be used appropriately to inform assessments of how climate change will impact financial risk have not yet been developed. In this Perspective, we summarize the demands by the business and finance community for reliable climate information, and the potential and limitations of such information in the context of what climate models can and cannot currently provide.
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A.J.P. and C.J. acknowledge support by the ARC Centre of Excellence for Climate Extremes (CE170100023). S.E.P.-K. is supported by Australian Research Council grant number FT170100106.
The authors declare no competing interests.
Peer review information Nature Climate Change thanks Sarah Kapnick, Tim Palmer, Christopher Schwalm and the other, anonymous, reviewer(s) for their contribution to the peer review of this work.
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Fiedler, T., Pitman, A.J., Mackenzie, K. et al. Business risk and the emergence of climate analytics. Nat. Clim. Chang. 11, 87–94 (2021). https://doi.org/10.1038/s41558-020-00984-6
Nature Climate Change (2021)
Climatic Change (2021)