WTW ushers in next generation of climate risk technology with launch of Climate Quantified™

Rhea-AI Summary

On June 3, 2024, WTW (NASDAQ: WTW) launched Climate Quantified™, an advanced SaaS tool that quantifies the financial impact of climate change with high precision. This tool enables 'anywhere, anytime' access, assessing physical and transition risks on a company's operations, assets, revenue, and enterprise value. It also evaluates climate risks on customers and supply chains, aiding strategic and operational decisions. Key features include measuring asset property damage, business interruptions, and future scenarios of drought, tropical cyclones, floods, and commodity prices. The tool supports business planning, compliance with evolving regulations, and fosters resilience against climate risks.

Positive

• WTW launched Climate Quantified™, an advanced tool quantifying financial impact of climate change.
• Climate Quantified™ offers 'anywhere, anytime' access, providing transparent risk assessments on operations and assets.
• The tool evaluates climate risks on customers and supply chains, aiding strategic decisions.
• It measures asset property damage, business interruptions, and future scenarios of drought, cyclones, floods, and commodity prices.
• Supports business planning, compliance with new regulations, and resilience against climate risks.
• Enhances decision-making for Chief Risk Officers and Chief Sustainability Officers.

Negative

• No specific financial performance metrics or revenue projections for Climate Quantified™ were disclosed.
• Potential high development and operational costs for maintaining and updating the SaaS tool.
• Risks associated with the adoption rate of Climate Quantified™ in the market may impact expected benefits.
• Challenges in accurately quantifying certain climate risks may still persist despite advanced technology.

Insights

Financial Analyst

Climate Quantified™ by WTW marks a significant advancement in how companies can quantify and manage climate risks. This tool could be transformative for organizations that need to understand the financial implications of climate-related risks. From a financial perspective, it could aid in strategic planning and ensuring compliance with regulatory frameworks such as CSRD and IFRS. By enabling a more accurate risk assessment, WTW may open new avenues for businesses to safeguard their assets, potentially mitigating financial losses and improving operational resilience. This could result in better capital allocation strategies, particularly in sectors vulnerable to climate change.

The release of this tool might also positively influence WTW's stock valuation. Investors are increasingly prioritizing ESG factors and a company with robust climate risk assessment tools could be seen as a safer bet. Additionally, the tool's potential to reduce business interruption and asset damage costs could enhance the overall financial health of WTW’s clients, indirectly boosting demand for WTW's services.

Market Research Analyst

From a market research standpoint, the introduction of Climate Quantified™ is timely and highly relevant. The market for climate risk assessment is rapidly expanding due to increasing regulatory pressures and heightened awareness of climate change impacts. This new offering positions WTW well to capture more market share in the climate risk assessment and management space.

Climate Quantified™ distinguishes itself by providing granular, high-resolution data and a comprehensive analysis of both physical and transition risks. This level of detail can offer a competitive edge, particularly for companies that operate in high-risk industries such as agriculture, manufacturing and energy. The ability to quantify and monetize these risks allows clients to plan more effectively for future scenarios, which is a valuable proposition in today's uncertain climate landscape.

LONDON, June 03, 2024 (GLOBE NEWSWIRE) -- WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company, today unveiled ground-breaking technology capable of quantifying the financial impact of climate change with an unprecedented level of precision. Climate Quantified™ offers ‘anywhere, anytime’ access, transparently assessing how and when physical and transition risks impact a company’s operations and assets, through to their revenue and enterprise value.

The Software as a Service (SaaS) online tool also evaluates the impact of climate risks on an organisation’s customers and supply chain partners, as a necessary component of understanding financial impact of climate risks. Assessing where a business creates value and their exposure to a changing operational landscape from climate risks brings a new level of clarity to support strategic and operational decision-making.

By analysing the interactions and interdependencies between climate risk factors and their impact on business models, including physical risks, supply chain vulnerabilities and regulatory changes, Climate Quantified™ offers a far more robust analysis of financial risk impact when compared to the more limited screening and assessment of emissions alone.

Peter Carter, Head of Climate Practice at WTW, said: “Whether assessing the impact of drought, tropical cyclones, river floods or commodity price changes, Climate Quantified™ is class-leading in its ability to measure the physical and transition risks impacting a company’s assets and products. By combining advanced, high-resolution climate data with our in-house risk engineering, WTW offers a sophisticated solution that quantifies risk in financial terms.”

Key capabilities of Climate Quantified™ that support Chief Risk Officers and Chief Sustainability Officers, with a focus on building resilience to physical risks and managing the transition to net zero, include:

• Enables companies to quantify the financial impacts of climate change on a portfolio of assets and products, whether owned or belonging to a third party (e.g. supplier).
• Quantifies asset property damage, business interruption and exposure value today and under future scenarios associated with drought (and water stress), tropical cyclone, riverine flood and commodity prices.
• For each product category and scenario, Climate Quantified™ measures the impact of transition risk on revenue and costs, plus the impact of managing or passing those costs through to customers.
• Designed to support business planning, due diligence, strategic decision-making and compliance with evolving regulatory requirements (e.g. CSRD, IFRS).

Ben Fidlow, Global Head of Core Analytics at WTW, said: “Companies face increased losses from physical risk and are assessing the need for investment and transformation for the move to a low-carbon economy. Armed with a clear, transparent and real-time view of the financial risks to their business provided by Climate Quantified™, companies are well placed to anticipate and respond quickly to emerging risks, make better investments, reduce their reliance on vulnerable locations, strengthen supply chains and protect their people. The outcome is to ensure capital is allocated at the right time to protect against climate-driven uncertainty and volatility.”

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organisations sharpen their strategy, enhance organisational resilience, motivate their workforce and maximise performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success - and provide perspective that moves you.

Learn more at wtwco.com.

Media contact
Andrew Collis, +44 (0) 7932 725267 | andrew@acolliscommunications.com

FAQ

What is Climate Quantified™ by WTW?

Climate Quantified™ is an advanced SaaS tool launched by WTW that quantifies the financial impact of climate change on company's operations, assets, and revenue.

When was Climate Quantified™ launched?

Climate Quantified™ was launched on June 3, 2024.

What are the key features of Climate Quantified™?

Key features include assessing physical and transition risks, measuring asset property damage, business interruptions, and future scenarios of drought, cyclones, floods, and commodity prices.

How does Climate Quantified™ help businesses?

Climate Quantified™ helps businesses by providing transparent risk assessments, supporting strategic decision-making, and ensuring compliance with evolving regulations.

What kind of risks does Climate Quantified™ evaluate?

Climate Quantified™ evaluates physical risks such as drought, tropical cyclones, and river floods, as well as transition risks impacting revenue and costs.