Insurers, councils and property owners are increasingly concerned about risks to infrastructure from climate change

By Tina Perinotto

With climate change, “maps are political bombshells”.

The speaker is Donovan Burton, head of local government and urban planning for Climate Risk Pty Ltd.

Burton is talking about the type of maps institutional property infrastructure owners are now commissioning to assess their specific risk in the medium term with climate change.

A general climate change map produced, by organisations such as CSIRO, that shows the potential rise in water levels, storm surges or rainfall patterns can be misleading if it not tailored to the specific locations and requirements of the client, Burton says.

“They might see lines drawn in the sand and make a decision without looking at the inherent uncertainties associated with it.

“It impacts on property values.”

On 29 July Climate Risk will host a high level conference in North Sydney for professionals in the insurance, legal and infrastructure fields to better understand the risks that are emerging for infrastructure, in particular stemming from climate change.

Burton anticipates strong interest.

Since the company started operations in 2006 its own staff numbers – largely scientists, climate change modellers and urban planners – have been growing along with clients.

However, other than Zurich Insurance, Telstra and WWF, Burton won’t say who the clients are other than they are generally insurers, local governments and property owners wanting climate risk incorporated into the due diligence process.

“Some of our clients are undertaking due diligence assessment of a range of superannuation funds and they want to know what the climate risk is to their assets,” he says.

“We’ve assessed a whole range of properties – portfolio properties. We’ve just finished looking at a proposed road in Queensland and helping insurers manage climate change risk.

“We hope it gives them a competitive advantage.”

Large consultancies such as GHD and Maunsell now provide climate change services as part of their suite of assessment tools, Burton says.

“When we do an assessment there is sometimes a modification of plans.”

A piece of infrastructure, for instance, might take an alternative route, avoiding an area that in the future could become prone to flooding.

Or they might shy away from an investment in a region altogether if the activity depends on certain climatic conditions.

“We’ve done work on the freight movement model where we gave it a climate change sensitivity.

“They might be looking in the model at the number of tonnes of wheat that may go down a road,.”We might anticipate that wheat won’t be grown in the region in the future so you might want to reconfigure your assessment,” Donovan said.

“Our work is based on the most up-to-date science.

“We use a high end strategic approach. We don’t do carbon footprint analysis. We identify the risks and opportunities.”

All of this has climate implications and legal implications and insurance implications.

“It’s very interesting – I anticipate many days in court.”

The Climate Risk Summit on 29 July will be held with co-hosts Zurich Financial Services, Evans & Peck, Mallesons Stephen Jaques and Infrastructure Partnerships Australia,  at the Zurich offices at 5 Blue Street North Sydney. For more information click here