Coalition for Climate Resilient Investment releses infrastructure asset guide
The Coalition for Climate Resilient Investment (CCRI), along with UK consultancy Mott MacDonald, have together launched a new guide that enables asset owners and investors to better understand the exposure of critical infrastructure to climate risks.
Developed to address the resilience gap in financing, the Physical Climate Risk Assessment Methodology (PCRAM) supplies tools for identifying and assessing the resilience of infrastructure assets.
CCRI and Mott MacDonald note that the product may also help to incentivise and scale up private sector engagement by clearly demonstrating the positive returns from investment in climate resilient assets.
Indeed, the initiative may ultimately prove useful for supporting the growth of climate re/insurance, by providing buyers with insights into climate risk when looking at options for risk transfer and insurance within financing.
“CCRI delivers rigorous analytical solutions that clearly demonstrate resilient investments are good investments,” said Carlos Sanchez, Executive Director at CCRI.
“Strong market forces are pushing the industry towards improved enforcement and reward of these integration practices, translating into opportunities for those that take early action,” he added. “CCRI analytics offer the potential to drive a more efficient allocation of capital towards climate resilient investments, without which we are unlikely to future-proof our communities for the decades ahead.”
Designed to enhance the financial valuation of investments, instead of minimising losses, PCRAM uses new methodology that is designed to give infrastructure owners and operators the means to evaluate physical climate risks to infrastructure and analyse their long-term impact on asset performance.
“We set out to create a framework that enable public and private sector infrastructure investors to assess their exposure to climate physical risks, quantify this exposure and improve their asset performance,” said Denise Bower, Executive Director at Mott MacDonald.
“What we found is that investing in resilience leads to better outcomes, better performance, less downtime, less maintenance and, most importantly, fewer negative impacts on the communities that infrastructure serves.
Sanchez added: “There is huge appetite from the private sector to invest in resilience. What has been missing so far are the tools to invest with confidence. Our methodology looks at specific infrastructure risks and how they will affect asset performance, life cycle and maintenance. We can then present a solid business case for resilient investment, unlocking the finance needed to protect vulnerable communities from the impacts of climate change.”
Source: Reinsurance News, https://www.reinsurancene.ws/ccri-targets-climate-resilience-gap-with-new-infrastructure-asset-guide/