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Waves crashing into the Dawlish coastline during the Dawlish flood event

Can digital help identify and quantify climate risk to buildings and infrastructure?

David Viner - global practice leader, climate resilience

Set against the backdrop of July 2019 being confirmed as the warmest month recorded on Earth, as well as the highest recorded temperature in the United Kingdom, and a litany of other profound events across the globe, there is a recognised need to build resilience to climate change into our critical infrastructure. In order to do this, it is essential that the risks from climate change are fully understood and monetised, and start-ups have a unique opportunity to support these efforts.

Climate change represents an increasing risk to our global infrastructure, including wastewater treatment facilities, which are commonly built in flood plains adjacent to rivers and estuaries; transport infrastructure that’s exposed to excessively high operating temperatures; and key coastal assets such as ports and energy generation facilities exposed to chronic long-term sea-level rise and acute storm surge events.

While asset owners and investors understand the range and magnitude of climate hazards they have faced in a historical context, the increased rate of global heating means that the impacts of climate change are increasing in both severity and frequency. The past can no longer be used as a guide to the future.

Despite their understanding of the costs of historical events, many asset owners and operators have minimal visibility of their quantitative risk exposure to future climate change. There are several key areas where innovation from digital start-ups can help us:

  • Understanding the scientific context of future climate change; the regional and local impacts of climate change in both an acute context and chronic longer context. For example, what key thresholds such as temperature levels are likely to be broken, and how will the frequency of severe impacts change, such as the shortening of the return period of severe precipitation events.
  • Defining the qualitative storyline of how the future may evolve for their asset portfolios. How will climate evolve in conjunction with other socio-economic factors such as population and economic growth, demographics and usability of assets? For example, as the move away from the internal combustion engine gathers pace, will certain assets be placed under increasing use (public transport) and others become less viable (aviation)?
  • Mapping the interdependencies between owners’ assets and the upstream and downstream supply chains. While an owner can build resilience for their own assets, they are usually dependent on upstream supply and downstream demand, so failure of the power network can cause direct or indirect impacts on assets.
  • Effective evaluation of future plausible scenarios and pathways. This will allow asset owners to understand the dynamic nature of climate risk and enable the prioritisation of investment on critical components.
  • Quantification of the risks that climate change impacts pose. This should not just be at the asset damage level, but the second and third tier costs associated with service and business disruption, and wider community-level costs, developing effective resilience options and quantifying their benefits.

Reporting of climate risks is explicitly promoted under guidelines issued in 2017 by the G20 Task Force on Climate-related Financial Disclosure (TCFD). There is increasing pressure from investors and regulators to assess, understand, disclose and subsequently reduce climate risk exposure through investment in asset resilience.

There are many individual tools and frameworks to help but no integrated service to help asset owners examine risk profiles at a facility or service level more holistically. It is well established that targeted investment will reduce potential physical losses, service failure and business disruption, but this requires quantified data to commercially justify investment.

To effectively undertake climate change risk assessments for multiple and diverse assets with complex (and sometimes) unknown interdependencies, developing a digital model to link high-quality climate data with high-quality digital data regarding assets is crucial. This will help asset owners understand, quantify and subsequently monetise climate risks – and prioritise resilience investment. Digital innovation is crucial if we want to succeed.

Mott MacDonald Digital Ventures is sponsoring the Accelerator at NCE TechFest. We have set digital innovators five key infrastructure challenges to explore where their skills and expertise can bring benefits to our industry. If you think your digital tools, services or expertise can help, apply for the Accelerator now.

David Viner

Global practice leader, climate resilience

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