The Challenge of the Climate Crisis

New ways to better manage the natural disasters and climate risks of today and tomorrow.

The analysis of natural disasters and climate risks is a new challenge for many companies. Be it for adapting to a changing risk landscape due to climate change or the regulatory required disclosure of climate risks such as the Taskforce for Climate Financial Disclosure (TCFD) or the new EU taxonomy. Swiss Re Corporate Solutions offers insights into how it uses its own long-standing expertise in the field of natural catastrophes to provide sustainable support to companies for regulatory requests as well as in setting up a holistic climate risk strategy.

From obligation to profit

The disclosure of climate risks is still often seen as a must, as this is required by the regulator. However, such analysis also brings great advantages for the company. For example, locations can be identified that are already exposed in today’s climate and, above all, those that will become so in the future because of ongoing climate changes. With targeted investments in protective measures, e.g. against flood events, or a revision of disaster management, future business interruptions, damage to the site, or accidents can be reduced. These types of analyses also form a valid basis for a company’s long-term climate strategy. With the best available data on future risks and the possible development of damages and insurance premiums, investment decisions can be made more effectively, for example when acquiring or constructing new sites or near-natural construction methods, e.g. investments in green areas or solar energy.

A risk analysis supported by experts

The Solutions & Risk Data Services of Swiss Re Corporate Solutions enables the analysis of natural disasters and climate risks. Various tools and services are available such as Sustainability Compass, the interactive online tool; high-resolution flood analyses e.g. FLOAT; or the recommendations by risk engineers for the reduction of today’s and tomorrow’s climate risks .  The Climate Risk Scores developed by Swiss Re provide insight into the changing landscape of weather-related climate risks and form the basis of risk analysis. They show the impact of future climate risks by combining science-based data, those of the Intergovernmental Panel on Climate Change (IPCC), with Swiss Re’s natural hazard risk maps, such as flood and storm surge zones. Natural hazards such as droughts, heat stress, floods or heavy precipitation are covered for three different IPCC climate scenarios in five-year intervals from 2025 to the end of the century.

Companies can analyse their climate risks with the help of the aforementioned Sustainability Compass. The tool creates a digital representation of the company’s locations including their assets and calculates the exposure to natural hazards in the current and future climate. The tool also takes into account the natural risks to biodiversity and ecosystem services, and provides information on the availability of groundwater, soil fertility, and eight other natural parameters. To make the findings of Sustainability Compass easier to understand and implement, experts can be consulted to produce tailored analyses – including recommendations for reducing climate and natural hazard risks.

How companies address climate risks

More and more companies are gaining experience in analysing and reporting climate risks. Typical questions and requirements for solutions that concern company executives are:

Best available data for climate risk reporting.

  • Support to fill knowledge gaps regarding the current company risk profile and to make newly emerging or intensifying climate risks visible.
  • Provide data to conduct a climate risk and vulnerability analysis according to EU taxonomy.

Quantification of the financial impacts of physical climate risks.

  • Insight into the current expected annual losses and their development based on different SSP climate scenarios (Shared Socioeconomic Pathways)
  • Overview of options for risk mitigation measures

Insights for informed decision making.

  • Data for informed prioritisation of investments
  • Linking risk and sustainability teams on a data/tool basis

The experience and positive feedback from analysed companies confirm the success of these new ways of sustainable risk management for natural disasters and climate risks by Swiss Re and Swiss Re Corporate Solutions: “By assessing the climate risk portfolio for our risk vulnerability analysis, we have gained interesting insights into our climate risks and also valuable knowledge for defining measures for different locations.”, Frequentis.

Annemarie Büttner

Lead Climate Risk Solutions

Neil Aellen

Climate Risk Specialist

Related Insights