What kind of decisions can be made based on a proxy or black-box financial impact model?

 

What is the value of such data?

 

The value of such data is limited because it’s not transparent, not explainable, and rarely decision-grade.

 

At WTN, our climate risk product is built for teams that need solid, auditable inputs for expected-loss and credit-risk modelling. Impact models must be meaningful, otherwise there’s no value for you, just wasted time.

 

To translate climate-risk metrics into financial impact, you will need:

• WTN data, and

• Asset-level information (e.g., facility type, asset value, and its criticality to the business).

 

 

Step 1. For each asset type and economic activity, we help identify 

• the drivers of physical damage (e.g., flood depth, hurricane winds, wildfire), and 

• the drivers of business interruptions (e.g., downtime, supply and logistics disruption).

Step 2. The climate risk metric is then quantified using a classic frequency and severity framework.

Step 3. We combine hazard intensities with vulnerability functions, exposure values, and valuation data (e.g., replacement cost, revenue at risk, margin), and incorporate company-specific inputs such as criticality, redundancies, insurance, retention, and recovery times. The result is an expected loss profile (and distribution) that links site-level climate hazards to financial outcomes across OPEX, CAPEX, and revenue.

 

Please feel free to schedule a call with our experts to discuss how we could support your projects with our financial modeling capabilities and climate risk data.