How Technology Will Help Businesses Mitigate Climate Risk
Climate change presents an existential crisis for business owners. In a matter of hours, an unexpected weather event can spell the end for companies unable to cough up the cash to deal with damage. Even large enterprises share in the risk, with trillions of dollars of assets laying in the path of storms, fires and floods. To mitigate this risk we must understand it. With more data at our disposal than ever before, the timing is right to build new products that help businesses manage climate risk.
By land, sea and air, entrepreneurs and scientists alike are hard at work coming up with new ways to get a real-time pulse on the earth’s health. Billions of dollars have been spent creating new weather stations and spreading sensors everywhere from the ocean to outer-space with this goal in mind. Thanks to massive amounts of new data, it’s becoming possible to more accurately forecast weather, more granularly, and further into the future.
This next generation of forecast is creating a foundation upon which new products and services can be built. We’re excited about tools that contextualize weather data with business operations data to support supply chain and sales decision making. In some cases these tools can even make decisions on behalf of enterprises, autonomously. Imagine a product that could forecast demand for goods like water and automatically make sure stores had extra supply ready for a big storm. We’re also looking closely at end-to-end b2b parametric insurance and guarantee products that close the loop on risk for businesses. Machine uptime data could be helpful in insuring against production downtime resulting from power outages, for example.
From a venture capital standpoint, these spaces are especially exciting because they’re often paired with defensible data acquisition strategies. With advances in processing power, increasing availability of granular, real-time, weather data and an accumulation of business operations data, there’s a window to build big businesses. Cooling the planet is our holy grail, but businesses must find a way today to deal with a climate that is only growing more volatile.
This market pull is only going to get stronger as storms become stronger, fires become larger and floods become more severe. Here at BSV, we’re on the lookout for anyone making use of an interesting climate data set to build a product that helps reduce business risk — email email@example.com if this is you!
Authored by John Mannes, investor at Basis Set Ventures