Climate Risk Advisory
Why is responding to climate change important now?
Extreme weather attributed to $380B of economic loss in 2023. As climate change impacts the frequency and severity of these events, businesses, communities and governments must evolve to better protect their people and property.
Rising claims costs, increasing regulatory scrutiny and changing consumer preferences mean organizations face emerging pressures to adjust their climate strategies to both future-proof their operations and capture growth opportunities.
How Aon Can Help
Aon’s Climate Risk Advisory practice helps clients make better decisions about their climate-related financial risks - delivering data and expertise to unlock capital and make markets to drive the transition.
We specialize in financial institutions, public sector entities and firms with large real estate holdings, enabling organizations to capitalize on strategic opportunities to:
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Quantify and Mitigate Physical Risk
Our physical risk modeling tools – built on our natural catastrophe and risk engineering expertise – assess the exposure of client assets to climate change. Our actuarial and analytics capabilities allow us to quantify the value at risk under warming scenarios and evaluate vulnerabilities in the portfolio to develop tailor-made mitigation strategies for our clients.
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Establish a Climate Risk Management Strategy
With deep expertise helping organizations identify, assess and manage risk, we equip clients with leading practices in developing and embedding climate risk strategy. We combine enterprise risk management capability, climate modelling expertise and risk financing knowledge to help clients develop holistic climate risk frameworks and processes for enhanced decision-making support.
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Meet Reporting and Disclosure Obligations
We take a multi-disciplinary approach to support clients in meeting disclosure requirements with a combination of tools and methodologies – underpinned by scenario analysis and risk quantification to support decision-making. We also embed findings in the commercial context of our clients, providing practical insights beyond compliance with reporting standards.
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Make Better Risk Transfer Decisions
Our analytics capabilities and insurance knowledge allow us to design innovative solutions for climate-related volatility. This can include using captive vehicles for risks that may be traditionally difficult to insure, providing solutions to accelerate the transition and ensuring risk exposures are reflected in optimal insurance pricing.
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Navigate Transition Risk and Identify Growth Opportunities
Our approach to transition risk builds on our deep risk advisory expertise to support clients in managing potential risks associated with various transition scenarios and in surfacing opportunities. As the global economy restructures to meet targets to limit global warming, our practical approach looks to highlight opportunities to help companies position themselves in a low-carbon economy.
By combining climate data with three decades of experience using and evaluating catastrophe and climate modeling solutions, we offer a one-stop-shop for climate risk management and transfer.
31%
Only 31 percent of the $380 billion in global economic losses from natural disasters were covered by insurance in 2023 — on par with the long-term average protection gap.
How We Work With Clients
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01
Discover
Discover your unique requirements and deliver a bespoke diagnostic report along with data and insights to seamlessly integrate into your organization’s risk management strategies
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02
Equip
Equip you with forward-looking insights to enable you to make better business decisions today and in the future
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03
Serve
Serve as your key advisor, working alongside your team to educate and review strategies with internal stakeholders and regulators
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04
Review
Review as managing climate risk is an ongoing journey. As new science and tools emerge and your needs change, we’ll evolve the approach to continue to reduce risk and drive growth
Why Work With Us
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End-to-End Approach
The practice delivers an end-to-end approach to climate model and risk program evaluation; asset resilience assessments and engineering insights; due diligence; and reporting and disclosure support.
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1000+ Analytics Professionals
Access to catastrophe and climate risk modeling expertise and solutions that have been developed and refined over several decades, including deep knowledge of model methodology, modeling best practices, and peril science supported by over 1000 analytics colleagues globally with expertise in engineering, meteorology, hydrology, climate science, and seismology.
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135 Catastrophe Models
Insights from our 135 proprietary Impact Forecasting models across 12 perils and 90 territories that offer a transparent and customizable platform for quantifying the financial impact of catastrophe events and creating a custom View of Risk.
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Model Evaluation and Selection
Evaluation of various modeling vendors to support model selection and validation to ensure the most appropriate tool(s) are chosen across all use cases for an organization and that implementation is streamlined through model risk management support. Advice on climate risk model interpretation and implementation of data insights to enable risk mitigation solutions aimed to promote financial resilience.
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Academic Research
Access to the insights of our 14+ academic institutions for an independent view on the latest climate science.
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Climate Liability Insights
Insights into emerging liability risk trends through Aon’s collaboration with leading-edge analytics firm, Praedicat.
Model Coverage Map
135 probabilistic models spanning 12 perils and almost 90 territories
To create the most effective strategies for climate risk and sustainability, it’s essential that organizations have the most useful and up-to-date data.
