All posts in White Paper

How avocadoes became the poster fruit for climate change and unprepared risk managers

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It’s being called an avocado-pocalypse. With rising prices, increased knowledge of the burdens both to farmers and to the environment of farming water intensive crops, and the impacts of the changing environment on all industry sectors, it is time to kiss the guac good-bye? Are avocadoes the tipping point in consumers waking up to the effects of climate change in their day-to-day regime, or are they the poster fruit for businesses and investors with their heads in the sand about the extent of weather risks in their portfolio? Any way you peel them, avocadoes are bringing attention to the contributors, risks, and mitigation strategies risk managers need to consider today.

They are calling it an avocado-pocalypse. Prices of the extremely trendy green fruit have sent shockwaves through hearts (and wallets) around the world. Recently touted as one of the world’s healthiest food, full of heart-healthy monounsaturated fatty acids, potassium and vitamins B and E, avocados are no longer just the humble base for guacamole. Nowadays, they are spread on toasted bread, replace cheese in a variety of recipes, and are even incorporated into beauty routines as a moisturizer. It all got a bit too much for even the most ardent avocado fans when a video went viral earlier this year demonstrating how to prepare the (inedible) seeds for consumption.

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Measuring and Managing Weather Variability: Protecting Businesses from WeatherRisks

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A new white paper has been released today by the researchers of Meteo Protect exploring the impact of changes in weather to find the maximum potential loss caused by adverse weather for any business. This innovative approach allows risk managers to have a full understanding about the impact of daily deviations from expected or seasonal weather and to be able to evaluate, for the first time, the total extent of their exposure to the weather.  In turn, they may determine how much of this risk should be hedged in order to secure their sales and EBITDA, and to assess the changes they need to make to their operations and business practices to mitigate risks attributed to climate change.

Given the heightened attention to the effects of climate change on all sectors of society at the recent Cop21 climate conference in Paris at the end of the year, businesses are facing increased scrutiny of their contribution to climate change by governments needing to meet emissions targets. At the same time, the effects of climate change are already impacting business profits, and investors and shareholders alike are also applying pressure, demanding climate vulnerability assessments to study the weather risks to which the business in which they have invested is exposed, and how the company is mitigating these risks.

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Ranking UK retail sectors

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A new white paper has been released today by Meteo Protect demonstrating the importance of unseasonal weather on the sales performance of UK retailers, and the growing need to actively manage its financial consequences. The extent to which retail companies are exposed to climate variability is likely to be an eye-opener for many banks, regulators, analysts and investors. As climate variability is increasing, the risk to which they are exposed requires urgent action.

The research report thoroughly investigates the relationship between monthly sales and climate variability. For the first time, for each season, retail sectors are ranked according to their sensitivity to temperature, precipitation, humidity rate and wind speed.
The authors provide retail managers with a methodology to calculate the contribution of weather to sales performance and to evaluate sales at risk caused by climate variability. They also provide analysts with rankings that classify retail sectors according to their sensitivity to climate variability.

To mitigate the exposure to climate risks, the idea that geographical diversification is a natural efficient hedge is wrong, and the scientific evidence exposed in this report is unequivocal. Climate variability is a risk that needs to be managed like any other financial risk. One way to become more resilient to climate risks is to use weather-index products that are designed to pay in case of unfavorable weather. If companies are resilient to climate variability on an on-going basis, they will, by definition, become resilient to climate change.

The contribution of this research paper is of course not limited to the UK as the methodology is reproducible to other countries and sectors. A must-read for finance executives and business managers ahead of COP21.

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The Impact of Climate variability on the Private Sector

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A ground-breaking new research report has been released today by the analysts at Meteo Protect demonstrating that despite the best efforts of government leaders and international organizations to lead the response to climate change, they have not been able to galvanize the key players who can make a difference. In fact, not only are they not engaged, they do not even know they are already at risk.

A new White Paper from Meteo Protect modelling the impact of climate variability on the private sector finds that climate change is already making a significant impact in the profits of companies operating in sectors exposed to weather.  Directly challenging the direction of present empirical research, and the consensus of how to respond to climate change, it identifies how and why private industry, including companies and investors, must act immediately to manage the consequences of climate change.

Indeed, the extent to which the vast majority of companies are presently exposed to climate variability is likely to be a revelation for many analysts, investors and even companies executives themselves. Demonstrating that billions of dollars are at risk each quarter, continuing to go unreported and unmanaged, the researchers call for the provision of actionable and objective indicators to measure the exposure to climate risk and the implementation of mitigating weather hedging strategies to protect financial performance.

A must-read for finance executives, investors, asset managers and business analysts, the White Paper takes a new approach to tackling a long-standing and unresolved problem, making it understandable, relevant and manageable.

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