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- 🧠 #002 — Climate Risk & Intelligence
🧠 #002 — Climate Risk & Intelligence
“Climate risk is investment risk” - Larry Fink
📣 TLDR
Climate data platforms help organizations measure, evaluate, and reduce climate risk and impact.
😬 Problem
Companies face increasingly costly risk from major climate events.
🎯 Solution
Climate risk and intelligence platforms use AI and predictive analytics to reduce impact of disruptions to operations.
💪🏼 Organizations
Climate Risk & Intelligence
Jupiter Intelligence provides risk analytics for natural disasters.
SINAI helps enterprises measure, analyze, price, & reduce emissions
Watershed helps measure, report, and reduce business emissions
Cervest does asset-level risk analytics and intelligence.
Earth Observation
Tomorrow provides insights on weather disruptions.
HydroSat uses geospatial thermal imagery for water and agriculture.
Betterview is a property intelligence platform for commercial insurance.
Planet and BlackSky are satellite data platforms for a variety of industries.
Environmental, Social, and Governance (ESG)
Project Canary is a platform for accurate corporate ESG data used by emission- intensive industries.
Persefoni helps companies measure and report emissions to meet stakeholder and regulatory requirements.
Patch measures company emissions and sells carbon offsets.
⚡️ Opportunities
Offer Resilience-as-a-Service.
One Concern built a “digital twin” to model effects of climate change on the natural and physical environment.
Sell data services to parametric insurance providers.
Traditional insurance pays out on magnitude of losses. Parametric insurances pays out on magnitude of event.
Descartes Underwriting offers parametric insurance for climate-related risks including floods, droughts, and supply chain disruptions.
Kettle offers reinsurance focused on wildfires, and predicated the location of 14 largest wildfires in California in 2020.
Provide a solution for a specific vertical or sector.
There’s no silver bullet for climate change. Focus on a narrow use case to mitigate risk.
ReGrow focuses on agriculture. Watershed focuses on water supply. Vibrant Planet focuses on wildfire management.
Solve for Scope 3 emissions. This is the hardest problem.
Measurement, reporting, and improvements across global value chains is notoriously complex.
Major supply chain cost reductions align directly with decarbonization.
⚠️ Challenges
Sources of climate data like satellite imagery, stationary sensors, Internet-of-Things devices, radar and sonar are capital intensive.
The majority of satellite data comes from government provided public sources.
Barriers to entry of launching new satellites has dropped significantly.
Turning raw data into actionable insights for enterprise organizations requires data wrangling and data quality improvements.
Scope 3 emissions are deep in a company’s global value chain. Connecting this data is difficult regardless of its relation to decarbonization.
This is what Watershed, SINAI Technologies, and Persefoni are trying to solve.
Time to value slower than traditional SaaS products. This slows down deployment period and and reduces chance of widespread adoption.
Climate SaaS, especially with hardware deployments, focus on a few pilots before full commercialization. This increases odds of success.
Time pilots so they experience climate events and the subsequent bullwhip effect.
📈 Predictions
Acquisition (satellites and sensors) and dissemination (data conversion) layers will consolidate. Intelligence layers will follow traditional venture patterns for SaaS.
Climate consulting will have a more real impact than sustainability consulting and lead to productized data platforms.
Green Banks and alternative financing will be the fuel that drives deployment of climate intelligence. See Climate Capital Stack.
😈 Devil’s Advocate
“Climate intelligence doesn’t solve climate change. It’s just a band-aid to help adapt”
Large-scale risk mitigation at requires proactive and reactive approaches.
“ESG is just a public relations stunt without real impact”
Sometimes it’s greenwashing for B2B. But new providers are tying climate impact to business impact (i.e. cost reductions) more directly. This is a more realistic approach.
🚀 Takeaways
Climate intelligence platforms gather data from land, sea, and air to help companies understand the risk of climate change.
Climate risk is investment risk. The most successful and sustainable companies will use climate intelligence when making business decisions.
Wrangling data across global operations is hard. Making that data actionable is even harder. Focusing on specific verticals, sectors, and use case will get traction.