The ClimINVEST project develops climate services for a user group of institutional investors to help guide their investment decisions.
An initial report synthesises investors’ needs and information gaps on the physical impacts of climate change, categorised as risk awareness, risk analysis and risk management. The findings underscore the need for collaborative efforts between researchers and the financial sector on improving climate information for risk assessment.
Three case studies
The report presents three geographical case studies - France, the Netherlands and Norway. These countries are at the forefront of creating awareness and acting on the risks and opportunities of climate change in the financial sector. The cases provide unique perspectives on the country-specific contexts and initiatives related to physical climate risk and user needs, featuring commonalities and differences.
Positive perspective for dealing with climate change
In the Netherlands, the financial sector is at the forefront of identifying opportunities in the face of climate change impacts on water, in particular the potential flood risks from more frequent and heavier precipitation and rising sea level. The emphasis is placed on possible solutions and opportunities, rather than on risks, creating a more positive perspective for dealing with climate change.
Providing insight into climate risks
Specific needs raised by different financial actors include the need for a climate risk scan linked to the mortgage lender value (the value of a building in the future), which is important information for banks and real estate appraisers during the due diligence phase. Providing insight into the climate risks could result in lower insurance premiums. In addition, there is a need to explore existing tools and datasets for climate risk assessment, with a specific emphasis on incorporating future climate scenarios (e.g. mid-century, for different climate scenarios). The way foreign investors consider climate risks in the Netherlands may differ significantly from domestic investors, who are accustomed to the country’s long history of dealing with water.