Climate Resilience & Corporates

Climate change is now impossible to ignore for businesses in every sector of the economy. Physical climate risks increasingly threaten the bottom line, whilst regulator, investor and consumer pressure, demand greater action to understand, report and manage climate risk exposure. At the same time, the economy-wide transition to net-zero, new technology and market sentiment will disrupt business models and pose new challenges and opportunities for all companies. Businesses that do not address climate risks are likely to fail, facing increased pressure on profitability, liability risk and potentially restricted access to capital and liquidity.

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Over 80% of the world’s largest companies see climate impacts, including extreme weather patterns, and increased pricing of greenhouse gas emissions, affecting their businesses today.”

CDP (formerly the Climate Disclosure Project)

With you at each stage of your climate resilience journey

Climate change puts both tangible and intangible assets at risk and requires companies to change their business fundamentals. Our comprehensive approach to climate risk can support you at every stage of your journey, from understanding and measuring climate risk to implementing a strategic response.

Our Climate and Resilience Solutions

We provide a wide range of climate risk and resilience solutions that can be tailored to your needs.

Physical climate hazard assessment

To begin to manage climate risks, it is crucial to understand your company’s exposure to climate hazards. Our Climate Quantified^™ tools provide high-level climate risk screening that can rapidly identify climate hazard exposure of various asset types across multiple locations worldwide. Assessments can be made for existing exposure and future exposure for several potential climate scenarios and time horizons. Outputs include simplified graphs, maps and other visualisations as well as narrative descriptions of key climate risks. Using our probabilistic catastrophe models, chronic climate impact models and macroeconomic models, we can quantify the expected physical climate impacts that assets may experience from a range of present-day acute and chronic climate hazards. Our Climate Diagnostic tool identifies current and future climate risks, including a breakdown by hazard or location, drawing on natural disaster event data going back decades. These tools help identify potential hotspots for climate risk across your global assets, supply chains and markets.

Detailed climate risk and vulnerability analysis

Assets and operations critical to your business’s operations require detailed climate risk and vulnerability assessments to be carried out. Our risk analysis combines Climate Quantified^™ climate data with information about client assets and operations, providing a detailed picture of vulnerability for single or multiple assets, covering both acute and chronic climate risks. Our tools provide you with a clear picture of potential losses and the financial implications of climate risks to your operations. Our bespoke Climate Quantified^™ threshold analysis tool, for example, can identify when certain climate thresholds are likely to be crossed that affect asset performance and efficiency, including alerting clients to risk exposure along the value chain. We also recognise that physical assets are only part of the picture, with an estimated 85 per cent of company value attached to intangible assets such as reputation, intellectual property and human capital. Our advisory services help you understand how climate change will affect intangible assets and put strategies in place to reduce risk.

Transition risk assessment

Using risk methodologies for identifying and evaluating risk, we work with corporates to understand and assess threats and opportunities from the transition to a low carbon economy. This includes identifying and articulating transition risks and opportunities associated with a ‘well below 2°C’ transition scenario and time horizon (2030). We also assess and quantify the financial impact of the identified risks and opportunities, giving a relative prioritisation of risks, helping to shape effective risk responses to identified transition risks.

Our Climate Transition Analytics (CTA) methodology allows you to have a high-resolution view of the climate-related financial risks that goes well beyond measuring the financial impact of carbon intensity. CTA combines commodity modelling with asset-by-asset company models to understand how transition risk, such as a lower price for oil, affects the balance sheet. We then apply equity analysis to assess the impact on company valuations. This approach enables us to determine the transmission of transition risks through the financial sector and real economy to evaluate how these losses in value crystallise across balance sheets, portfolios, sectors.

Risk pricing and cost-benefit analysis

In addition to identifying climate risk exposure and vulnerability, we use Climate Quantified^™ to estimate costs associated with various climate hazards, including downtime analysis and business interruption. When coupled with cost estimates for adaptation and resilience options, including costs avoided, this analysis provides a clear picture of the imperative for action and the most cost-effective approaches to manage risk. Using the Climate Transition Analytics methodology, we can also provide estimates of the financial implications of transition risks allowing you to optimise your growth strategy that aligns with the transition to a whole-economy and resilient net-zero economy.

Climate scenario planning

We help you incorporate climate risk into your strategic planning, allowing you to make well-informed decisions about the types and locations of new investments, where to situate operations, contingency planning for potential transport or supply disruptions, and operations analysis under various climate scenarios. Climate change will also drive unprecedented changes in technologies and market demand, requiring creative approaches to business planning. We work with you to identify risks and opportunities across a range of possible climate futures.

Regulatory compliance & reporting

Investors, regulators and consumers continue to demand increasingly comprehensive climate risk disclosure. Our detailed Climate Quantified^™ analytics combined with our reporting advisory services help ensure that your governance, strategy and business models are fit-for-purpose and provide the basis for comprehensive and robust reporting. Our team of experts help you to establish effective processes and frameworks to comply with regulatory and reporting requirements, including Taskforce on Climate-related Financial Disclosures (TCFD), CDP (formerly the Climate Disclosure Project), Sustainability Accounting Standards Board (SASB) and Global Reporting Initiative (GRI).

Risk transfer solutions

As one of the world’s leading insurance brokers, Willis Towers Watson is ideally placed to advise on the most appropriate risk transfer solutions to manage climate risk in the right circumstances. We can help you understand when and how products such as alternative risk transfer, parametric insurance products, captives, and facultative reinsurance can best meet your needs. As an impartial broker, we can recommend the very best solution for your circumstances.

Embed sustainable values in business practices

We help you to embed climate risk and sustainable values into the heart of your business operations, implementing strategic plans for long-term leadership on the transition to a net-zero and resilient economy. Our specialists can help you define how climate links to your organisations’ purpose and value and how it will form a part of your value proposition. We help ensure that your people strategy drives your climate strategy, identifying and nurturing behaviours you need from your people to develop a culture that is responsive to climate change.

We ensure that your incentives and reward programmes are aligned with your values to ensure they reinforce your climate strategy. Incentive design for Executive Directors will need to be disclosed and reported on each year. We help you to embed climate-related targets that are material and measurable within incentive programmes to ensure accountability for the delivery of the strategy.

Managing organisational change

We understand that managing a whole-economy transition net-zero and facing increasingly severe physical climate impacts in all sectors will demand creative thinking and new approaches to how your organisation operates. We also know that change can be hard to manage. Our change management advisory services can help your organisation successfully navigate the organisational changes required to meet your climate objectives. Taking a people-centred approach, we work with you in many different capacities, from strategy development to on-the-ground support.

Employee learning and engagement

Successfully operationalising a strategic response to climate change requires more than analytics, process maps and systems design. We address the human dimensions of organisational change, driving employee readiness, so your whole business is prepared for the challenges of the climate transition. Our team of climate specialists dedicated to learning and communications ensures that our engagement services are based on the latest science regarding effective climate communications to drive behavioural change. We help you understand your workforce’s attitudes and sentiment on climate issues and initiatives through employee listening to create communications build targeted communications that educate and engage employees. We offer a range of climate learning services, from tailored e-learning modules that can be rolled out company-wide, to board level training on climate risk to build role models within leadership and foster the desired culture.