By Manavi Garg, dClimate Ambassador
In 2015, the Paris Agreement sparked over 196 countries to sign up to lower global temperatures to below 2°C (35.6°F), ideally to 1.5°C (34.7°F). Some key measures to achieve these goals include countries incorporating ways to reduce greenhouse gas emissions, building resilience within countries to adapt to rising temperatures, communicating financial data and need to support these initiatives, and incorporating advanced technologies to achieve goals.
With this view in mind, governments around the world initiated discussions and strategies to achieve net-zero carbon emissions. For any economy to be successful in achieving national or global goals, both public and private sectors, across different industries, need to work collaboratively using technology and other advanced tools. To tackle a crisis that is climate change — having sophisticated tools such as in-depth climate data are a key part of the solution.
Why is climate data important for all industries?
The United Nations’ (UN) Intergovernmental Panel on Climate Change (IPCC) Report recently called the climate crisis “a code red for humanity”. Global temperatures are already at 1.2°C (34.16°F), with several recent reports of extreme weather conditions and wildfires across the world.
Countries like Greece, Canada and the USA, and unexpected areas such as above the Arctic Circle have recently experienced unprecedented heat waves and wildfires. Floods across Germany, Belgium and other parts of Europe have resulted in scientists warning of impacts and regular occurrence of extreme weather conditions.
It is expected that the target of 1.5°C (34.7°F) will be achieved between 2030 and 2052 according to a United Nations report. However, with extreme weather conditions rapidly becoming the norm, as seen by extreme conditions across the world within the first half of 2021, countries and businesses are now focussing more on adapting to these changes rather than only focusing on reducing GHG emissions.
These extreme weather events are causing significant damages to industries such as agriculture, crop and animal production, fisheries and oceans, and forestry among others. The direct impact of climate change on these sectors has a further impact on areas such as manufacturing, construction and housing, tourism, and financial services and insurance.
Given that all sectors of the economy are interrelated and have ripple effects, the need for using detailed climate data on factors such as soil, wind, precipitation, solar radiation, and temperatures can help companies, business owners, and individuals make strategic decisions and prepare to handle extreme climate conditions that are rapidly becoming the norm.
Over the past year, numerous ESG and sustainability initiatives have cropped up across many corporate institutions. Although companies are taking steps to discuss their ESG strategies, the use of detailed climate data remains limited, with primarily ESG/sustainability focussed companies using climate data to make strategic decisions. However, with extreme climate and weather conditions emerges the need for corporations, in addition to governments, to also step up ESG efforts by making data driven decisions.
Why is better access to climate data important?
Yes, there is a clear need for using detailed climate data to make strategic, insurance and financial decisions as identified above. However, having access to this type of detailed data is not easily available.
Let’s take a soda company, as an example, that relies on raw materials for production. A soda producing company that usually relies on fresh water supply, has a high probability of having their supply chain, revenue and sales being impacted due to expected extreme climate conditions such as drought, rising temperatures, flooding and heat waves over the next decade.
Using climate data to forecast this impact can be highly beneficial for the company to take actions such as financial decisions, insurance protection and strategic decisions on managing operations. The difficulty, however, lies in getting access to data that can help drive some of these decisions.
When we think of climate data, most people are accustomed to accessing weather apps on their phones or watching the local weather network to stay vigilant of the day-to-day changes in weather.
Currently, to get more detailed climate data, sources include government regulated agencies or the weather networks. This involves many steps as not every company or individual has the resources to get access to this data. And within this process, there are several layers of data that may be misplaced or miscalculated (refer to dClimate’s whitepaper here).
Thus, in order to make informed strategic decisions, better and easier access to detailed climate data is essential. For instance, a small agriculture company, that has a limited working capital and is managing finances for its long-term strategy to maintain its operations, has limited room in its budget to go through different layers of accessing climate data that may or may not fulfil their needs, adding further expenses to their limited budget.
A platform like dClimate encompasses solutions to both why climate data and better access to it is important, as it uses blockchain technology to verify data and minimizes human error and judgement.
About the Author:
Manavi Garg is a financial services professional with a background in working with FinTech companies to adapt digital assets, and other private and public sector companies to use technologies such as blockchain and automation to improve their strategy and operations. Manavi has a master’s degree in Economics and the focus of Manavi’s master’s thesis was understanding the relation between social media and its relation in driving cryptocurrency prices.
This is a contributor piece. The views of contributors are theirs alone and do not reflect the views of the dClimate team or its representatives.