A team of economists and climate scientists have launched a San Diego-based technology startup company that allows asset managers, banks, insurance companies and financial regulators to calculate, assess and manage the financial risks of real assets linked to climate change.
Launched with $3 million in financing led by venture capital firms Innovation Endeavors LLC, MS&AD Ventures Inc. and Blackhorn Ventures, FutureProof Technologies Inc. is a climate-risk analytics firm that uses artificial intelligence to project current and future financial losses on physical properties related to climate change.
"We've been able to use AI to project climate-related losses in dollars and cents terms. We can project damages to physical assets under different climate models," said Alisa Valderrama, San Diego-based CEO and co-founder of FutureProof, in a phone interview. "We're trying to help our users operationalize climate-risk data in a way that's similar to other risk data being used out there."
Ms. Valderrama, a former senior policy analyst at the non-profit environmental advocacy group Natural Resources Defense Council Inc. said the inspiration for FutureProof came about when she and her husband were looking to buy a house and found it difficult to learn the climate risks associated with the properties. When she mentioned this conundrum to Ashby Monk, fellow FutureProof co-founder and executive and research director of the Global Projects Center at Stanford University, he said that wasn't just a quandary for homebuyers, but a situation that institutional investors were dealing with as well.
"Our hope is that this puts a price on climate change and quantifies climate risk and that in turn helps institutional investors build more resilient portfolios," Mr. Monk said in the same interview. FutureProof's projections cover multiple climate scenarios from the present to the year 2100.
In addition to providing users with the dollar value of current and future climate-related damages to physical structures and the probability of defaults and loss from defaults on mortgages due to climate, the subscriber-based service offers the climate impacts on more than 50,000 public and private companies.