Mott MacDonald has teamed up with the Coalition for Climate Resilient Investment to develop a tool that aims to help asset owners and investors understand the exposure of critical infrastructure to climate risks.
Developed to address the considerable gap in financing, the Physical Climate Risk Assessment Methodology, or PCRAM, supplies the practical tools to identify and assess the resilience of infrastructure assets, and clarifies ROI in the process.
Denise Bower (pictured), executive director at Mott MacDonald, said: “We set out to create a framework that enable public and private sector infrastructure investors to assess their exposure to climate physical risks, quantify this exposure and improve their asset performance. What we found is that investing in resilience leads to better outcomes, better performance, less downtime, less maintenance and, most importantly, fewer negative impacts on the communities that infrastructure serves.
“All of this means a higher rate of return for investors and is a powerful tool for building the case for resilience. This is vitally important work. Even if we do manage to limit global warming to 1.5°C, we will still see decades of continued changes to our climate that will result in immense economic shocks and loss of life if we are not prepared.”
Carlos Sanchez, executive director, Coalition for Climate Resilient Investment, added:
“CCRI delivers rigorous analytical solutions that clearly demonstrate resilient investments are good investments. Strong market forces are pushing the industry towards improved enforcement and reward of these integration practices, translating into opportunities for those that take early action. CCRI analytics offer the potential to drive a more efficient allocation of capital towards climate resilient investments, without which we are unlikely to future-proof our communities for the decades ahead.”
Investment in resilience lags well behind the financing of climate mitigation. According to the Climate Policy Initiative, total spending on climate finance during 2019-2020 reached US$632bn, with mitigation finance accounting for US$571bn compared with just US$46bn on adaptation and resilience; significantly less than what is required to meet the challenges posed by climate change, according to the CPI.
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