Climate X

The impacts of climate change are everywhere, giving rise to new risks and accelerating the need to adapt our physical infrastructure and societies. Regulators are introducing new regulations to disclose those risks to protect the financial system. Investors are adjusting portfolios and adopting new products to accelerate infrastructure adaptation to manage risk and returns. Governments are planning large-scale investments into new infrastructure to prepare for an uncertain future. People are wondering if they are safe and secure where they live and work.

Better data, and inference of those changes, are a key lever in being able to minimize those risks and accelerate the transition to a climate-compatible future. This is easier said than done. Waves of new data are coming online as the cost of sensor and data collection declines, and a flood of new techniques for analysis and inference makes it harder than ever to keep up.

This is where Climate X comes in. Climate X is building a unified data ingestion and inference platform from the ground up to enable dynamic, detailed scenarios of asset-based physical and economic impacts from climate change. They call it a digital twin of the earth. By automating data ingestion, modularly applying inference algorithms, and exposing an API for accessing the latest in climate data and intelligence they aim to build a foundational climate intelligence resource that is clear, transparent, and continuously improving to empower better decisions.

For asset owners, it means more granular insights into portfolio risks based on the changing climate and potential scenarios of action. For investment managers, it means insights into new products and investment opportunities. For governments and companies, it means earlier identification of climate-related vulnerabilities and better informed, long-term investment decisions. And for everyone else, it means a faster path toward a climate-compatible society.

Harnessing climate intelligence to accelerate decarbonization and adaptation is an integral part of our Transition Economy narrative. Our research initiatives into the use of scenarios for systemic finance, or the effects of inter-systemic cascades all pointed us to the challenge of understanding and navigating the complex, systemic risks that are rippling across society. And so, today, we are excited to announce our investment in Climate X alongside Pale Blue Dot, a100x, Blue Wire, New Chic, and a global group of strategic angels.

Lukky, Kamil and their growing team have come to this with first-hand experience modelling and managing risk across asset portfolios, partnering with leading experts in climate science and artificial intelligence to arrive at this new approach.

If you are looking for better data on asset-level climate impacts, reach out to learn more about how Climate X can help.

Reason – a manifesto for impact investment.

Bust of Chekhov at Badenweiler
Image via Wikipedia

this post an experiment in co-posting – with thanks to Jeremy Heigh

Impact is no reason to invest. Impact is an outcome.
Investment is a choice. A choice for a reason. A choice of reason.

Reason is not static. Reason evolves.
Teach a person to fish, they fish. Pond gets over-fished, they go hungry. Every system is part of other systems. Every action affects others. Nothing stays the same.

Impact is easy. Reason is hard
Impact is a measure. Reason is understanding. As systems collapse and collide, impact becomes erratic and un-predictable. Reason responds, metrics reset, action adapts.

Impact is “what happened”. Reason is “what’s next”.

Beyond metrics to sensing and foresight
Our work creates change, in times of increasing change. Our pace of success depends on our ability to 1) sense the evolution of now, and 2) foresee where the dynamics lead.

Sensing “now” demands a new set of filters and criteria. Today, in a world deluged by data (which change every day), relevancy matters more than volume, frequency and timeliness. Curation counts.

Foresight clarifies “next”. It acknowledges that the future is unknown but leverages fit, character, and ability to absorb new opportunities. It seeks to understand a kind of gravity. These elements attract opportunity. Knowing their gravity and reconciling with emerging demands enables analytical understanding of what might come next.

We live in a fulcrum.
Social issues are surging in the face of a flagging economy. We are global. Our systems have failed. We haven’t yet chosen new ones. A window is open. The world is begging.

Grasping the potential of this moment depends on four key outcomes:

  • Wake the senses: Define, quantify, and validate are just the beginning. Up the ante. Sensing now. Map change. Feed foresight.
  • Create clarity: Honor complexity, obliterate complication. Let things be inter-connected but do not confuse. Invest simply, with reason.
  • Quicken the pace: Change is accelerating. Change is changing. Our ability to sense and respond needs to keep up. Investment needs to adapt.
  • Deliver returns: Without returns, investment is unsustainable. Know your reason, find its returns. Invest. Deliver.

If change comes from within, we must change ourselves to achieve the change we seek.

It is in our nature. It is in our grasp.

We can sense it. We can see it.

We must do it.

“Man has been endowed with reason, with the power to create, so that he can add to what he’s been given. But up to now he hasn’t been a creator, only a destroyer. Forests keep disappearing, rivers dry up, wild life’s become extinct, the climate’s ruined and the land grows poorer and uglier every day.”

Anton Chekhov in Uncle Vanya (1897)

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