Master of Environmental Science and Management: Master's Group Project
Advancing Methods for Corporate Climate Risk Assessment
Climate change is altering weather patterns in the United States, increasing the frequency or severity of hazardous events such as hurricanes, wildfire and extreme heat. Companies recognize that these climate-related events can pose financial risks, threatening buildings and equipment, business operations, and the health and safety of employees. Furthermore, investors, regulators and other stakeholders increasingly expect companies to measure and manage these climate change risks. Yet quantifying risk in this rapidly emerging space poses a challenge for businesses. A lack of standardized methodologies and consistent guidance hampers efforts to understand the scope and magnitude of corporate climate risk. Despite challenges, businesses can take steps toward understanding their exposure to climate-related events using existing frameworks and publicly available tools. Measuring this risk can yield benefits by guiding sustainability planning, informing capital investments, and improving disaster response procedures. Here we develop a framework to quantify physical climate risk for Raytheon Technologies Corporation using publicly accessible climate data sources. This framework was applied to 21 high-priority Raytheon sites across the United States, and the results of this risk assessment were presented to Raytheon in an Excel-based tool. In addition to displaying the results of this project, the tool has the ability to assess climate risk, as well as estimate potential financial damage posed by climate hazards, for additional Raytheon sites. This project will inform Raytheon’s strategic planning, risk management and sustainability activities, and contributes to a growing body of work around climate risk measurement in the corporate sector.
Samantha Stevenson, Assistant Professor, Bren School
Alexandra Waldman, Climate Sustainability Manager, Chubb