Howden launches the Resilience Laboratory supported by Microsoft to measure and evaluate climate risks

London, 23 September 2024 - Howden has launched the Howden Resilience Laboratory, a platform designed to transform how clients evaluate and manage climate risks. The Laboratory uses Microsoft technology to provide innovative, data-driven solutions for client challenges associated with the impacts of climate change.

Developed by Howden and powered by Microsoft’s cloud services – Azure, Microsoft 365 and Dynamics 365, the Resilience Laboratory enables clients to model climate scenarios and assess financial impacts. By transforming large volumes of complex data such as environmental, societal and financial, into actionable insights, the Laboratory enables asset owners, investors, and other stakeholders to understand and manage climate risks more effectively, thereby increasing their resilience and optimising decision-making.

The Howden Resilience Laboratory offers:

• Advanced Climate Risk Modelling: Identifying residual risks to clients’ operational and financial performance and designing optimal insurance solutions. For example, to maintain expected income or returns for new technology investments or innovative products.
• Bespoke Strategic Scenario Planning: The platform helps clients develop tailored ‘what-if’ models simulating potential outcomes of strategic decisions, including mergers, decarbonisation efforts, or new market expansions.
• Optimised Risk Transfer Solutions: Optimised investment and insurance strategies, accounting for changes in hazard, exposure and vulnerability
• Quantified Financial Impact of Resilience Investments: The platform evaluates the financial benefits of investments in resilience, encompassing everything from supply chains to biodiversity and social impacts

The Howden Resilience Laboratory uses industry research and partners with data and modelling experts, as well as The Microsoft Planetary Computer.

At Climate Week NYC 2024, Howden and Microsoft will showcase an automated modelling approach, developed in the Howden Resilience Laboratory, that enabled real asset investors to understand, pre-investment, the impact of physical climate risks on the asset. The approach also considers resilience strategies and their financial implications.

The solution is built in accordance with the Physical Climate Risk Assessment Methodology (PCRAM) curated by the Institutional Investors Group on Climate Change (IIGCC) and is the first to report on financial metrics such as cash flow impacts, taking climate risk assessment to new levels.

Mahesh Roy, Investor Strategies Programme Director, The Institutional Investors Group on Climate Change (IIGCC) said: “By streamlining the process, the Resilience Laboratory's application of PCRAM offers the opportunity to broaden its use across sectors, providing insurers and investors with a practical framework to incorporate climate resilience into their decision-making. This consistent approach not only manages risks but also enhances asset value over time, ensuring long-term stability and unlocking opportunities for more resilient investments.”

Lyn Grobler, Chief Information Officer, Howden explained: “Asset owners, investors and wider stakeholders face evolving and complex pressures from risks related to climate change. This collaboration with Microsoft allows us to create a world-class innovation hub powered by data, AI and computation to model climate scenarios and assess financial impacts, which will enable strategic and confident investment decisions that protect assets and businesses. Together with Microsoft, we will continue to integrate insights and collaborate with other data partners and researchers to help scale and build the tools and capabilities to de-risk financing decisions and accelerate the transition to a more resilient world.

Bill Borden, Corporate Vice President, Worldwide Financial Services, Microsoft added:  At Microsoft, we are dedicated to empowering industries with the technology needed to tackle critical issues like climate change. The Howden Resilience Laboratory is using technology and data platforms to model, understand, and mitigate climate risks in ways that were previously unachievable. Together, we are helping businesses make informed decisions that not only manage risk but drive long-term sustainability and resilience.”