As climate change and the associated increase in natural catastrophe events alters the contemporary risk landscape, there is now an opportunity for governments to partner with the (re)insurance market and put its expertise to work.
Infrastructure investors need to adopt a dynamic and evolving approach to building climate risk resilience, according to a recent report from Marsh & McLennan Advantage Insights colleagues Blair Chalmers, Director, Innovations in Infrastructure and Meghna Basu, Research Analyst. Global Infrastructure Investment Association CEO Lawrence Slade and Corporate Affairs Director Jon Phillips also contributed to the report.
The long-term and stable returns promised by the infrastructure asset class are under increasing pressure – both from volatile physical changes in the earth’s climate and from an unprecedented global transition to low-carbon energy. Building climate resilience can therefore no longer be left as a static activity. Investors must be prepared to proactively adapt to the ever-evolving climate risk landscape and continually revisit their risk management mechanisms to ensure their assets are protected.
The Global Risks for Infrastructure: The Climate Challenge report outlines three key levers that infrastructure investors and operators need to utilize in building climate resilience: scenario planning, lifecycle imperatives and ecosystem-wide stakeholder management. The report highlights how each of these mechanisms can be utilized responsively, with each one providing inputs and checks for the other.
Guy Carpenter is well-placed to advise clients on responding to climate change risk. We have multiple experts in atmospheric and climate science across the globe that have been actively researching and consolidating the scientific literature. Our solutions can help clients make informed decisions about pricing, capital and risk management strategies.