Lee Harris in The American Prospect:
In the spring of 2011, heavy rainfall swelled the Mississippi River to record levels, flooding trailer parks and pushing up gas prices as refineries and fuel terminals along the waterway closed. Surveying the wreckage, Heather McTeer Toney, then mayor of Greenville, Mississippi, found a crucial partner in Mars, Inc., the international conglomerate that makes M&M’s and pet food.
Mars operates an 80-acre rice farm in Greenville—its largest factory in the world. The company sent senior officials and shared its in-house risk assessment with Toney, which helped her plan the city’s police and fire response, design street upgrades, identify points of weakness in the wastewater and levee systems, and work with the Army Corps of Engineers.
“Today, we would call that climate risk,” Toney told the Prospect, but at the time it was “just protecting infrastructure.”
Local officials, civil engineers, and homeowners describe a growing need for information on exposure to the risks of extreme weather. In the past five years, demand has exploded. But not all cities have an anchor business as willing to share as Mars, and many might prefer not to depend on private industry for public planning.
Financial markets and private companies, meanwhile, are in an “arms race” for climate intelligence. Some firms have announced decarbonization plans, while others are pledging to double down on fossil fuels. Regulators, struggling to keep up, have asked for more disclosure.
Private climate risk modelers have been the beneficiaries of this gold rush. Their guidance falls into two buckets: physical risk, or material exposure of assets to hazards, or transition risk, which includes fallout from policy changes, impact on the financial system, and reputation.