# Financial Impact Analytics

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## Overview

AlphaGeo’s **Financial Impact Analytics** model climate impacts on the key drivers of cashflow (including revenues, OpEx, CapEx) and asset value to enable more robust, future-ready financial modelling and planning.&#x20;

## Our approach: Beyond risk management to strategic finance

Most climate financial analytics focus on expected losses, using metrics like Climate Value-at-Risk (CVaR) or Average Annual Losses. While useful for risk management, they don’t capture climate’s impact on cashflows—critical for valuations, investments, and capital budgeting. Our **Financial Impact Analytics** fill this gap, delivering cashflow-based insights that plug directly into models like DCF to support strategic financial decisions.

<figure><img src="/files/nhVvEGyZds14ubo4Y8yR" alt=""><figcaption></figcaption></figure>

## Product features

* **Asset Types:** Residential, Commercial, Power Plants, Electricity T\&D, Water & Wastewater, Transport (Road & Rail), Airports, Seaports, Data Centers
* **Geographic coverage:** Global
* **Emission Scenarios**: SSP245, SSP370, SSP585

## Metrics

The Financial Impact Analytics suite includes:

1. **Overall asset Net Present Value (NPV) impact:** Forecasted change in NPV due to climate impacts on cashflow (calculated based on an aggregation of the 10 bottom-up metrics below).
2. **10 bottom-up metrics covering revenue, OpEx, CapEx, and discount rate impact:**

<table><thead><tr><th width="198.22265625">Metric</th><th width="381.44140625">Description</th><th>Unit</th></tr></thead><tbody><tr><td>Insurance Cost</td><td>Forecasted change in insurance premiums driven by forecasted trends in <strong>flood or fire premiums.</strong></td><td>Annual % change</td></tr><tr><td>Insurability Risk</td><td>Forecasts the risk of a location becoming <strong>technically or economically uninsurable.</strong></td><td>Low / High Risk</td></tr><tr><td>Utility Demand</td><td>Change in utility demand driven by shifts in <strong>heating and cooling demand.</strong></td><td>Annual % change</td></tr><tr><td>Maintenance Cost</td><td>Forecasted change in the costs of upkeep and repairs caused by <strong>changing chronic climate conditions and acute extreme weather events.</strong></td><td>Annual % change</td></tr><tr><td>Operational Efficiency</td><td>Annual rate of change in operational efficiency due to <strong>temperature effects on HVAC systems and equipment performance.</strong></td><td>Annual % change</td></tr><tr><td>Workforce Productivity</td><td>Forecasted change in workforce productivity driven by <strong>extreme heat.</strong></td><td>Annual % change</td></tr><tr><td>Operational Downtime</td><td>Annual change in operational downtime due to <strong>risks of</strong> <strong>precipitation, fire, and water shortage</strong> to continuous operations.</td><td>Annual % change</td></tr><tr><td>Retrofit Costs</td><td>Additional CapEx for <strong>thermal comfort and hazard reinforcement</strong> retrofits.</td><td>Annual % change</td></tr><tr><td>Climate Rate Discount</td><td>Climate-adjusted discount rate/exit cap rate.</td><td>Annual % change</td></tr></tbody></table>

## Use cases:

* Valuation and investment analyses &#x20;
* Financial planning&#x20;
* Capital planning&#x20;
* Public budgeting and economic modelling&#x20;

## See next: [Methodology](/analytics-product-guides/financial-impact-analytics/methodology-location-based-financial-metrics-1-2.md)


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