Part of a new industry series Shipping the Future™: Climate Business Intelligence™ For The Maritime Industry
Financial Impact Modeling
Understanding the physical risks of climate change is only part of the challenge for the maritime industry. To influence investment decisions and meet regulatory and investor demands, risks must be expressed in financial terms, measuring the impact of storms, flooding, sea-level rise, and heat stress on capital expenditures, operations, and maintenance, as well as insurance costs. Climate Business Intelligence™ bridges this gap by directly linking hazard exposure to the financial performance of maritime assets, providing operators, insurers, and investors with a clear view of climate-adjusted risk and return.
Linking Hazards to Costs
By combining localized hazard forecasts with engineering data and financial models, Climate Business Intelligence™ evaluates how physical climate risks affect key cost areas.
- Capital Expenditures (CAPEX): Damage to terminals, cranes, or seawalls can accelerate depreciation and require costly retrofits or reconstruction.
- Operations & Maintenance (O&M): More frequent flooding or heat stress increases routine maintenance, downtime, and labor costs.
- Insurance Premiums: Rising hazard profiles lead to higher premiums, exclusions, or a loss of insurability, resulting in significant recurring costs.
This connection establishes a clear link between climate hazards and financial obligations, making risks both visible and measurable.
Climate Econometrics
Traditional financial models often underestimate or overlook climate risk because they rely on historical data. Climate Business Intelligence™ utilizes climate econometrics—a combination of climate science, economic modeling, and statistical analysis—to quantify risks in monetary terms across various future scenarios. For example, it calculates the probability-weighted annual loss (PWL) for a facility at risk of flooding or determines the cost of delayed cargo flows resulting from extreme heat events. These insights help decision-makers compare adaptation costs with expected losses, thereby enhancing the business case for resilience investments.
Ready to get started? To learn how ClimaTwin can help you assess the physical and financial impacts of future weather and climate extremes on your infrastructure assets, capital programs, and investment portfolio, please visit www.climatwin.com today.
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