Evolving private climate risk services: insights into data gaps, model integration, and financial sector needs

Working paper

This study investigates the evolving landscape of private climate risk services and the critical role they play in supporting financial institutions (FIs) in managing physical climate risks. Through a detailed survey of climate data providers, we identify key trends, data gaps, and challenges these providers face in meeting the diverse needs of FIs, including banks, asset managers, and insurers. Our findings highlight that while providers prioritize physical climate risks, there is significant variation in the types of hazards addressed, with a strong focus on long-term projections (10–30 years) and geographic-specific assessments. The study underscores the need for more granular, asset-level data and the integration of complex climate models, such as Global Climate Models (GCMs) and Regional Climate Models (RCMs), to improve the accuracy of climate risk assessments. Providers also face challenges with data standardization, transparency, and addressing uncertainty, particularly in extreme or high-impact, low-likelihood events. This paper offers recommendations for improving climate data services by addressing these gaps and providing targeted, sector-specific solutions for FIs, ultimately contributing to a more resilient financial sector.

Authors: Freeman, A; Grainger, S; Dessai, S; Taylor, A; Ranger, N

• Publication status: Published
• Publisher: University of Oxford
• Publication date: 2025-03-14
• Language: English
• Keywords: climate data gaps; financial sector; physical climate risk; climate data services; climate predictions; data provider survey; climate projections