In 2025, in a multipolar world, corporations are adapting to a new risk environment by zeroing in on climate, physical and supply chain risk. These risks encompass trade tariffs, water shortage, supply chain disruptions, weather related disasters, and biodiversity loss, to name a few, and need to be communicated to markets and stakeholders with the same level of granularity, transparency, and accuracy as financial data. Management teams require a comprehensive, integrated view of the risks to make informed decisions. Boards, in turn, need intermediate and long-term risk assessments, baselining, and benchmarking to develop effective governance strategies.
Leading companies are actively seeking reliable and comprehensive risk assessment data providers. While there are several providers focused on the risk themes discussed here, there is a lack of timely risk metrics at an asset level. RS Metrics is stepping to address this gap by offering a solution that combines data on 250 risks with asset-level granularity. The information it provides is tailored to needs of the C-Suite and boards and can be further enhanced by AI analysis of aggregated risk, giving businesses the insights they need to manage the complex risk landscape of the future. This aggregate and multifaceted risk assessment provides depth of analysis that supplies customers with a clearer idea of the opportunities and threats that surround companies. This is achieved by creating a model of inter-dependencies of various risks that construct the risk score and provide businesses with timely accurate information about individual assets.
One of the areas where this approach is useful is in assessments of fire risk. Fire disasters like the Los Angeles wildfires of January 2025, can be very dangerous and lead to lasting economic damages for the regions they occur in (Source). Aggregate risk assessment measures the historical risk of wildfire risk occurrences, and other metrics that can contribute to the occurrence of the problem like water stress, precipitation (such as annual accumulated rainfall), heat wave risks, proximity to water (coastal inundation) soil moisture, and land cover. This helps the management and risk teams get a more holistic and accurate window of the asset’s exposure.
Another type of assessment that is enhanced by a compound approach to data is landslide risk. Given the increase in occurrences of landslides due to changes in climate (Source), companies are paying more attention to this issue. Aggregate risk assessment of landslide risk includes looking at data themes related to flooding (through metrics such as coastal inundation, riverine inundation, etc.), types of assets existing in an area (land usage), and the potential presence of intense rain (annual accumulated rainfall). Adding such measurements when deciding how to manage new assets in sensitive areas can help businesses avoid unexpected economic strains and ensure their teams are notified in case of higher chances of landslides in the region.
All in all, climate change is inviting businesses to rethink how they perform assessments and making them consider adding enhanced methods for calculating risk. RS Metrics’ ESGSignals® gives customers an option through which they can explore multiple environmental, climate, and physical risks and how they interact. This allows them to be better risk managers and use the information to optimize their resources, shield assets that might be in the way of future climate change disasters, and minimize costs associated with poor risk management decisions.
