Software to revalue assets based on climate science

Australian company Climate Risk has registered international patents for climate change adaptation software for property and infrastructure assets. Designed by scientists, engineers and financial risk specialists, the ‘Resilience Engine’ is said to have broken through the barriers to pricing the inevitable impacts of climate change to specific assets and evaluating the benefits of adaptation.

The Resilience Engine technology has taken three years and US$2m to develop and analyse hundreds of infrastructure and building assets simultaneously, cross-referencing them with extreme weather maps and climate change data, to quantify the risks from hazards like extreme weather and sea level rise. The system automatically forecasts the annual costs of the impacts, insurance premiums and can even project the future change in value of the assets.

Dr Karl Mallon, director of Science and Systems at Climate Risk, stated: “The Resilience Engines address a fundamental gap in business intelligence: the chasm between climate science and asset planning. To cross the divide we turn maps and probability distributions into dollars, cents and cost projections. It might seem a small gap, but it takes serious maths, maps and computing power to bridge that divide. What currently takes months of expert consulting time, we have captured in sophisticated software that runs 10m risk calculations per minute.”

The company already has over 300,000 company assets on its servers being trialled by asset managers. One of Australia’s largest utilities is currently in rollout phase with a utility version of the software.

“The technology could be a market game-changer,” said Dr Mallon. “Asset owners can now test the resilience of their own portfolio, adapt high-risk assets or get rid of them before the rest of the market has realised the liability. They can also identify the weaknesses in someone else’s portfolio.

“The market has not really factored changing extreme weather and climate science into asset valuation but once the market has access to robust information we expect pricing to follow.”

Climate Risk is currently negotiating deployment arrangements with transnational cloud computing providers for commercial rollout in Australia and the US.