Navigating Climate Risk with Brian Kilkelly
Explore climate risk management with expert Brian on The Jens Heitland Show, discussing awareness, individual action, and AI's role in future-proofing society.
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Navigating Climate Risk with Brian Kilkelly
Show Notes
In an engaging episode of The Jens Heitland Show, we introduced a compelling discussion with Brian, a sustainability expert, in our innovative "Walk the Talk" format. Titled "Climate Risk," this episode delves deep into the pressing issues surrounding climate change and the imperative actions humanity must undertake to mitigate these risks.
Raising Awareness and Taking Action
Brian emphasizes the critical first step in combating climate risk: awareness. With the increasing frequency of extreme weather events, it's becoming evident that these risks are not just hypothetical scenarios but real challenges impacting our daily lives. The conversation sheds light on the dual approach needed to address climate risk: proactive measures to enhance sustainability in our lifestyles and strategic preparations for the inevitable changes in our climate.
Individual Contributions to Climate Resilience
The discussion further explores how individuals can contribute to a more sustainable and resilient future. From dietary changes to green modes of travel and energy-efficient home improvements, Brian highlights the importance of personal accountability in driving change. Moreover, he advocates for active engagement with governmental and business entities, urging them to prioritize sustainability and climate risk mitigation.
Societal and Business Imperatives
The conversation transitions to a broader societal and business perspective, emphasizing the need for open dialogue about climate risk. Brian points out the necessity for collective decision-making on resource allocation and infrastructure planning to adapt to changing climate conditions. For businesses, the focus shifts from mere regulatory compliance to a more profound understanding of climate risk's financial implications. Brian suggests that companies integrate climate risk into their top-tier strategic planning, leveraging advanced tools like AI to analyze and predict climate-related impacts.
AI: A Game-Changer in Climate Risk Management
Brian introduces Risk Thinking AI, a cutting-edge company employing AI to revolutionize climate risk analysis. By harnessing satellite data and AI, they can predict climate behaviors and assess risks to specific locations and assets. This approach enables businesses and communities to make informed decisions about safeguarding their future against climate adversities.
The Path Forward: Collaboration and Innovation
The episode concludes with a call to action for enhanced collaboration among communities, businesses, and governments. By leveraging digital innovations like AI and fostering open conversations about climate risk, we can collectively develop strategies to safeguard our future.
This episode of The Jens Heitland Show not only brings climate risk to the forefront of our collective consciousness but also inspires hope and action through innovative solutions and collaborative efforts. Tune in to gain valuable insights into how we can navigate the challenges of climate change together.
Join Jens Heitland and Brian in this enlightening journey towards understanding and combating climate risk, and discover how each of us can contribute to a more sustainable and resilient future.
Timeline:
00:02 Introduction to the Show and Guest
00:13 Understanding Climate Risk: The First Steps
01:04 Individual Actions Towards Sustainability
03:11 The Role of Society and Businesses in Climate Risk
05:32 The Power of AI in Analyzing Climate Risk
06:11 The Importance of Board-Level Conversations
07:46 Risk Thinking AI: A Breakthrough in Climate Risk Analysis
11:30 The Impact of Climate Change on Supply Chains
13:47 The Need for Community Conversations and Actions
15:07 Closing Remarks and Future Directions
Guest Links:
Brian on LinkedIn: https://www.linkedin.com/in/kilkelly/
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Transcript:
(This Transcript is AI generated)
[00:00:00] Jens: Hello and welcome to the Jens Heitland show. Again, the new format Walk the Talk. Today with Brian. Hello,
[00:00:10] Brian: Brian. Hello.
Very good to meet
[00:00:11] Jens: you. Great to have you with us. So as we always talk about walking the talk, Brian is an expert in sustainability, and we are talking about climate risk.
We need to take the first step, what do you think we as humanity and people should be doing when it comes to working against the climate risk we are facing.
[00:00:35] Brian: I would say it's awareness. It's being aware that These risks exist and about actually how big they are and how big they're becoming. So I think we're, you know, we're beginning to realize it. Yeah. There are so many extreme weather events happening now almost in a weekly basis.
Um, and so I think the awareness people going, actually, this is this is really happening. And to believe actually and to understand that [00:01:00] we can prepare and we need to prepare. That's what people need to do.
[00:01:04] Jens: What are the things Every person can do?
[00:01:07] Brian: it's people, um, recognizing that there's there's there's really 2 sides to this. 1 is What can we do to prevent climate risk?
So the whole case of, um, what can we do to make our lives more sustainable? Uh, I mean, there's been a lot of talk about that, which is fantastic. Yeah. And many of us are taking steps to do that. You know, we're we're taking meat out of our diets, Uh, and we're choosing more green waste travel.
Um, and, uh, we're looking at how can we improve our our housing, for example. Make it, you know, more insulation. And many of us are actually taking action to, um, ask our governments and our businesses to actually take this more seriously. Yeah. So that's all great.
And we should do that. We should continue doing that. Where I've moved really is I've been in that world for many years doing exactly that, working with People and businesses in the area. Uh, what I'm what I've come to realize is that actually we're not in parallel without also [00:02:00] doing much about our risk We're facing so there's a real danger that we're we're sleepwalking into a future that is gonna catch us by surprise Unless we start paying attention. So as individuals, we need to ask ourselves, you know, what is the risk?
You know, how am I gonna cope if the rain is double the amount of rain. If the wind is twice as fast, if it goes a hundred days without any rain at all, you know, the the droughts, the floods, the extreme wind Yeah. You know, um, how am I gonna survive as an individual? What can I do to prepare? You know, how can I how can I look at my lifestyle?
How can I look at where I live, how I live, look at my house? Look at the way I travel. How do I continue to do the things I love doing and want to do, recognizing that actually, things are gonna get a lot worse. Yeah. And quickly. Yeah.
I mean, 20 30 is it's in 6 years' time. It's around the corner. It's around the corner. Yeah. And, you know, we we've already seen I mean, last year, it was the hottest summer, [00:03:00] you know, in Europe.
I mean, in London, we had over 40 degrees. And, you know, we didn't expect to see 40 degrees in London for probably another 5 to 10 years, and here it is.
[00:03:11] Jens: What can we do as a society? And maybe as well, what can businesses do to look into that?
[00:03:17] Brian: So as a society, we need to be talking about it. Yeah. So thank you for the questions. This is great that we're having this conversation because We need to be talking about climate risk and we're aware of it. There needs to be a, uh, a social, uh, a conversation in society.
Because Actually, there are choices we need to make, and there are decisions we need to make about where we invest and how we protect ourselves. Uh, and there's already been some discussions Quite well publicized, uh, around decisions, for example, to leave certain places to the sea, to allow the sea to come in and overwhelm the village because actually the cost of protecting that village is so many millions. Yeah. Actually, it makes much more economic sense. May you know, it's a shame for those people.
They've maybe lived there all their lives. But [00:04:00] economically, we can't afford to protect certain places, but we need to be having those conversations. Um, we need to be having conversations about is it okay to continue building On waterfronts, on beautiful waterfronts Yeah. Or do we now need to start retreating away from those places? Because actually the cost, uh, of protecting these places perhaps It's something that we now we need to ask ourselves, is that a sensible way of us spending our money?
[00:04:22] Jens: Let's go more into the business angle. So what does it require from businesses to look into that?
[00:04:28] Brian: Right. Um, I I think, You know, businesses spend a lot of time now on decarbonization and net 0. It's been all all about that.
And the climate risk side has been more Around the regulatory requirements to kind of tick the box. Am I am I doing what I'm supposed to do from a regulatory point of view? Um, so regulation is trying to drive this agenda. Uh, and actually, European Central Bank, uh, said last year that they were dissatisfied that banks were doing enough To consider climate risk and the effect of climate [00:05:00] events on their portfolio of loans, for example. They're threatening to start penalized banks They're not doing enough.
Yeah. And really, that's the tip of the iceberg. But actually, it's so true. Yeah. Businesses not doing enough.
Um, And that's partly because, uh, it's it's it's a lack of awareness, but also getting the data and understanding the data Where is your climate risk and how it will affect your business has been quite tricky. Yeah. It's been a difficult task to do. Um, so there there are now More and more potential is coming through. In fact, 1 of the really great breakthroughs has been AI.
Right. So AI has enabled us now to analyze satellite data and to be able to extract information about what's happening, but also what's there. So, you know, incredible ability now to be able to map the the the Earth at an amazing resolution and to be able to have a lot more rich data about what's happening, Yeah. In different parts of the world.
[00:05:56] Jens: So one thing is having the possibilities and having the capability [00:06:00] of an AI tool. The other thing is, walking the talk, what do companies truly need to do that they start doing things, not just talking about them.
[00:06:10] Brian: Yeah.
The conversation needs to be happening at the board level. Yeah. So there has to be a kind of a a a realization that actually these risks are real. Uh, they can be anticipated, Uh, at a at a level which would enable you to actually save a significant amount of of money. Yeah.
So it's kind of a financial con conversation really. It's like, actually now these risks are so material, they're so evident that we really need to take Climate risk can put it right up there as 1 of the top 3 risks of any company.
In fact, last week, there was a report by the World Economic Forum. And actually, the the top 2 risks that World Economic Forum, a massive survey of thousands of executives, Number 1 was the concern about misinformation. There's a real concern about that affecting business.
Yeah. Number 2, extreme climate risk [00:07:00] weather, which is great. So that's wonderful that they're aware of it. What they're possibly not aware of was that there are some amazing tools out there Yeah. That actually can help them Understand where that risk is, what the probability of those risks are, and then help them to make decisions about how do they invest To mitigate that risk.
Yeah. And you've got several choices. You know, you can you can choose to close a factory, for example, and say, actually, The cost of protecting that factory or that facility is too high. We're going to relocate it. Yeah.
Do that in orderly fashion. Um, you could choose to protect an asset. Um, there's there's lots of different ways you can you can you can react to climate risk. Uh, and I think it's the confidence that actually now we have the data now. Yeah.
We have the ability to do that In in their and put it in their hands. So I'm quite excited now because I'm working for a company called Risk Thinking AI. And Risk Thinking AI has really taken a a a real breakthrough. And for two reasons. One of the challenges we have with climate risk is the way the climate models work [00:08:00] is you, um, the climate science is based on different scenarios.
So we're quite familiar with the kind of Paris agreements. Mhmm. So what happens if we keep temperature below 2 degrees? This is what the scenario is gonna look And they spend 5 years crunching the numbers, uh, the climate scientists. And they come out with data saying, in this location in the world, Based on 2 degrees, this is how fast the wind will blow.
Yeah. And then they take a 4 degree world. This is and do the same, and then I create them 4 degree world. So So most organizations will say, okay. We think it's gonna be 2 degrees, so we're gonna base our risk decisions on that.
Um, we'll have a look at the kind of 4 degree world just in case it gets that bad, and we'll look at that as well. The challenge we have, we we don't we which one's right? You're kinda placing bets. Yeah. Uh, what we've done in risk thinking is we've said, let's take all of the climate scenarios and actually look at what is the Kind of consensus scientific opinion on what's the most likely risk likely outcome in different parts of the world [00:09:00] and provide data on all of that.
We call it a stochastic modeling. So it's kind of a mathematical term for looking at risk across its broader spectrum. Uh, one analogy we use is, um, if you can imagine driving down a road and you've got a laser beam lighting up your way ahead, You've got a great line of sight for that butt band, but you're not gonna see the deer jumping out in front of you and getting you. Yeah. So, actually, what you want is a a wide Headlight illuminates the whole route forward so you can see all the risks.
Yeah. So that's one of the one of the problems that we solved. The second problem we have is climate change, it's a complex phenomenon. So you may you may suffer a major flooding event 1 year, but 6 months later, you might have a drought. What's the effects of the flood and then immediately after a drought on your on your business?
Yeah. So you need to be able to look at multiple climatic events and understand the risk of those cumulatively. Uh, we've created a [00:10:00] a patented Process, um, called a a multi spanning approach, which looks at how you look at multiple climate risks, the cumulative effect of those, and what the overall impact would be. And that solves the second problem, which is, uh, the sequential nature of of these risks. Because, you know, quite a few do happen.
Yeah. Uh, Texas last year had the coldest January ever, and then 1 of the warmest February's ever. 1 month's in there. So you got this kind of frost thaw cycle going on.
[00:10:28] Jens: Getting the data then from you is analyzing the location data and understanding what what the impact is. Oh, great question. Or it what what is it? Give us a little bit
[00:10:38] Brian: more depth on it. So this this it's true.
There's 2 sides to it. 1 is you need to have the data on What's the climate doing at that location? Mhmm. So, you know, we can tell you any any longitude and latitude, any point in the world, we can tell you what the climate We can predict what the climate's gonna be doing in 10, 10, 20, 30, 40, 50 years' time. Yeah.
The question then is, well, what's there? You know, what kind of [00:11:00] building is it? Yeah. Is it the Tower of London? Uh, is it is it the Shard?
Um, and then How will that building be affected by this particular climate hazard? So you need both sets of data, and we have both sets of data. Um, there's a third piece of data, which is what's the value of that building, what's going on inside that building Yeah. And how will How will activities be affected by this by this damage that's been caused? And that's data which comes from the the the company itself.
One the challenges a lot of companies face is that actually the risks are out there in their supply chain. And they may have data on their own assets, but actually then it gets quite, you know, difficult to understand what's happening out there with your supply chain. Yeah. So, again, using machine learning and AI and large language models, we've connected the dots between the businesses and their supply chain.
So we can tell you, for example, um, how your supply chain will be affected by climate risk.
[00:11:58] Jens: That's fascinating because if [00:12:00] we talk about the Shard as an office building Yeah. Or a building where people are sitting in. Let's say if something happened with that compared to a factory, it's completely different ways of looking at it, Analyzing the data and going into, , what does it mean to the supply chain? Yes.
If you have an office building, it's different than to a factory than to a retail store. Definitely. But all of them will be affected They will. They will. Sooner or later.
Absolutely. And I think that's what is brilliant about that because there There are companies that are so big that have factories around the world. So Yeah. It's not just one spot, one location where they look into these things, it's a lot of multiple locations where they need to get the data from, plus multiple scenarios because 1 factory if we take car manufacturing as an example. There's 1 piece that is manufactured in this country, in that location, another piece, and they go Together into a third factory That's right.
And then need to be assembled or whatever. So you need to have multiple sets of scenarios, multiple suppliers and sub suppliers as part of model I guess.
[00:12:59] Brian: You do. [00:13:00] I mean, what we're talking here about systemic risks. Yeah.
Uh, and the founder of risk thinking, a general called doctor Ron Denbo, He created a company called Algorithmics some 20 years ago, which took the banking community from looking at risks individually to looking at them systemically. And he sold his company to Fitch, uh, and he's a, you know, a world renowned statistician. And he when he approached the climate challenge when he looked at the climate challenge, He recognized the same approach was needed. We needed an enterprise scale risk management approach. We need to be able to look at this problem systemically And feed that data into the enterprise risk management systems of the major organizations.
Yeah. And that's essentially what we do. We provide the data In so that you can implement it with an with an enterprise level view. And what I'm excited about is partnering with, Say the city of London and other cities around the world to say, let's look at the risks facing your city. Um, how can we have a dialogue back to our conversation about the community, [00:14:00] how can we have a dialogue with the business community and the residents of this city about the climate risks So that collectively, we can start to take action.
Because sure, you might make the Shard really resilient, but if nobody can get to the Shard, It's not much good to you. Yeah. So so we you know, the conversation needs to be beyond individual assets and buildings and supply chains. It needs to be about communities. So whole regions, whole nations need to be empowered by this data and this view on this is how the climate is going to behave.
What are we gonna do about it, folks?
[00:14:32] Jens: So there are different aspects of that. And if I understand you, one is really technical enablement and digital capabilities like AI where we understand data and get the possibility to analyze it. Yes.
And And the other part is really looking into how do we connect to each other, how do we have a conversation around these topics, and truly start Walking the talk. First, talking and and understanding it and meeting each other like we do today here [00:15:00] in beautiful for London Yeah. And start walking towards a future where we can have a conversation around these topics. Yes. Brian, I would love to close with this because I think you have a beautiful mission in front of you or we have as society, I think.
Yeah. And you are building capabilities that help all of us so I would like to thank you for spending the time with us here in London and meeting us. Give me half. Thank you very much.
Would love to walk towards that direction so we talk and walk about the future and looking into climate risk. Thank you very much, Brian.