The most recent update to ClimateScore Global™ cemented Jupiter as the first provider of climate data from the sixth Coupled Model Intercomparison Project (CMIP6).
These models, which will power next year’s sixth report from the Intergovernmental Panel on Climate Change, represent seven years of innovation in the climate community. They also shift climate scenarios from Representative Concentration Pathways (RCPs), which considered Earth’s response to varying levels of radiative forcing, to Shared Socioeconomic Pathways (SSPs), which tie the world’s actions to radiative forcing and then to climate change. These SSPs illustrate the interconnectedness of transition and physical risks, and they are a powerful framework for corporations seeking to understand the breadth of climate risks and opportunities that they face.
Introduction
It’s an exciting time in the climate community. With next year’s sixth report from the Intergovernmental Panel on Climate Change inching closer, the global climate models that will support its conclusions, from the sixth Coupled Model Intercomparison Project (CMIP6), are just now releasing results. The CMIP6 data archives are much richer than those of CMIP5, with more models and ensembles contributing their perspective on Earth’s changing climate. And not only do these models represent more than seven years of innovation — a lifetime in such a dynamic field as climate science — but the models also incorporate Shared Socioeconomic Pathways, which provide additional context for how greenhouse gas emission scenarios are tied to socioeconomic conditions globally. These new climate scenarios will help users think more broadly and consistently about the climate crisis. …
Climate change’s challenges are becoming increasingly commonplace and risk managers need to adapt.
Risk is everywhere. A bond might default, a trade war might shock oil prices, or a virus might sweep through the globe. Much of our economy has been built around containing risk: construction companies design buildings to specific resiliency standards, while actuaries, catastrophe modelers, and other quants put a price on potential hazards. Meanwhile, regulators and shareholders often require a quantitative accounting of risk as part of a company’s overall enterprise risk management (ERM) strategy.
As the U.S. Commodity Futures Trading Commission (CFTC) recently stated, “Climate change is already impacting or is anticipated to impact nearly every facet of the economy, including infrastructure, agriculture, residential and commercial property, as well as human health and labor productivity.” But an accounting of climate risk is lagging. Despite its potential for drastic impacts on companies’ finances and business models, it is rarely included in the risk management frameworks of the world’s largest companies. …
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