5 differences between weather forecasting and climate risk management
It hasn't been long since weather forecasts have existed, or at least since they've been reliable enough to actually be used. Today, forecast websites are among the most visited. Their information is used for everything from small daily activities to large port operations or wind farm management.
When I began to better understand the use of weather forecasts in high-impact businesses, I really didn't expect this discovery: a good part of these businesses use the same free weather forecast that we use to know if there will be a beach day on the weekend or if it's necessary to prepare for the cold.
This means that important operational decisions are made based on individual interpretation of generic weather forecasts.
With the advance of the climate crisis and the onset of a new El Niño in 2023, the challenge of managing operations exposed to weather becomes even greater. This is no small thing. A recent study by Oxford researchers estimated that US$81 billion of global trade is annually exposed to systemic climate risks in port operations.
In this article, we will address the main differences between weather forecasting and a climate risk management system and its importance for businesses exposed to adverse weather conditions.
Weather forecasting vs Climate risk management
Answer quickly. Does a 25-knot wind impact a port operation?
Most likely, you answered it depends. Because it depends on the type of operation, it depends on the direction and duration of the wind, whether it's associated with high waves or the tide. It depends on the size and type of vessel. And it depends on the port's exposure. To name a few variables.
However, weather forecasts only inform you about wind and wave conditions, for example, and the impact and risk analysis on operations is up to you — or that person with the most practice in reading forecasts.
In contrast, climate risk management technologies support decision-making, from translating forecasts into impact and risk to defining strategic actions and their monitoring. We list below five main differences between climate risk management and a simple weather forecast.
1. Event records and operational limits;
2. Automated analyses;
3. Automatic monitoring to anticipate risks;
4. Translation of forecasts into impact and risk;
5. Decision-making support;
1. Event records and operational limits
The first step to defining strategic actions and responses to extreme events is to survey, systematize, and make accessible the records of risks, incidents, and accidents related to adverse weather conditions.
It is extremely common for companies to have event records, operational limits data, and infrastructure data related to weather conditions. However, often this information is not organized and accessible.
Based on the analysis of this data, along with historical weather condition data, it is possible to build a risk matrix and generate the situational awareness necessary for climate risk preparedness.
2. Automated analyses
Obtaining clear and consistent climate analyses for strategic planning can be a great challenge. Few businesses can afford a full-time specialist to analyze and identify climate risks. After all, this is not the core activity of a mining company, a port terminal, or an agricultural company, for example.
In climate risk management, analyses of environmental impacts on operations, the history of incidents and accidents related to weather conditions, and risk projections are performed automatically to define actions, strategies, and investments in climate adaptation solutions.
3. Automatic monitoring
Once operational limits and strategic responses are defined, it is necessary to maintain monitoring of environmental conditions through measurement sensors and customized weather forecasts for each need.
This data, when organized and readily accessible, is the foundation for automating climate risk management solutions, maintaining records, and updating analyses.
4. Translation of forecast information into impact and risk
A weather forecast without interpretation is not sufficient to generate climate adaptation, resilience, or increase operational intelligence. Therefore, the core of short-term climate risk management is the translation of sea and weather forecasts into impact and risk.
By linking strategic actions to forecasted sea and weather conditions, it is possible to plan for an imminent impact, seize opportunities, manage risks, or reduce inevitable damage. Risk management systems present this information readily, in the form of actionable alerts, to support decision-making.
5. Decision-making support
All these elements combined are a powerful ally in supporting decision-making. Whether in the short term, in response to weather conditions, or in the long term, in strategic planning.
On one hand, translating forecasts into impact and risk increases the speed and quality of responses to climate events. On the other hand, having risk matrices with the cross-referencing of severity, frequency, and probability helps create responses for business climate adaptation.
For example, a 100 km/h wind in certain regions is not frequent, but the severity of the risk is high for work at heights. With climate change, it is very likely that the probability will increase, so a risk matrix based on historical data and projections assists in quantifying the problem.
Similarly, identifying which areas are suffering the most impacts and which are less vulnerable is another important tool in decision-making support, contributing to better management of human and financial resources.
The importance of risk management for businesses exposed to weather conditions
In the climate scenario we find ourselves in, where it is very likely that we will exceed 1.5°C of global warming, it is necessary to go beyond short-term preparation to create responses, strategies, and monitoring to anticipate risks.
Port authorities and terminals are already gaining efficiency and safety with climate risk management platforms. The largest private port authority in Latin America, for example, has been a pioneer in anticipating risks and adapting to climate change.