Financial decision-makers need weather and climate information to manage risks

Science Daily: Maximizing returns on financial investments depends on accurately understanding and effectively accounting for weather and climate risks, according to a new study by the American Meteorological Society (AMS) Policy Program.

The study also found that weather events create and exacerbate risks to financial investments by causing

1. direct physical impacts on the investments themselves,
2. degradation of critical supporting infrastructure,
3. changes in the availability of key resources,
4. changes to workforce availability or capacity,
5. changes in the customer base,
6. supply chain disruptions,
7. legal liability,
8. shifts in the regulatory environment,
9. reductions in credit ratings, and
10. additional impacts that alter competitiveness (e.g., shifts in consumer preferences).

The study is based on a recent AMS Policy Program workshop, Climate Information Needs for Financial Decision Making, held in Washington, DC earlier this year and conducted in partnership with the University Corporation for Atmospheric Research (UCAR). Financial analysts, investors, academicians, and key leaders from the business, financial, and climate research communities convened to examine the role of climate science in financial analysis.

The purpose of the study was to assist with societal decision-making by examining the implications of climate variability and change on near-term financial investments....

A weather vane in Portugal, shot by Joseolgon, Wikimedia Commons, under the Creative Commons Attribution-Share Alike 3.0 Unported license