Financial Impact Analytics
Modelling the financial impact of climate change
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.
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.
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:
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).
10 bottom-up metrics covering revenue, OpEx, CapEx, and discount rate impact:
Insurance Cost
Forecasted change in insurance premiums driven by forecasted trends in flood or fire premiums
Annual % change
Insurability Risk
Forecasts the risk of a location becoming technically or economically uninsurable
Low / High Risk
Utility Demand
Change in utility demand driven by shifts in heating and cooling demand
Annual % change
Maintenance Cost
Forecasted change in the costs of upkeep and repairs caused by changing chronic climate conditions and acute extreme weather events
Annual % change
Operational Efficiency
Annual rate of change in operational efficiency due to temperature effects on HVAC systems and equipment performance
Annual % change
Workforce Productivity
Forecasted change in workforce productivity driven by extreme heat
Annual % change
Operational Downtime
Annual change in operational downtime due to risks of precipitation, fire, and water shortage to continuous operations
Annual % change
Retrofit Costs
Additional CapEx for thermal comfort and hazard reinforcement retrofits
Annual % change
Climate Rate Discount
Climate-adjusted discount rate/exit cap rate
Annual % change
Use Cases:
Valuation and investment analyses
Financial planning
Capital planning
Public budgeting and economic modelling
See next: Methodology
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