On today’s Sustainable Finance Podcast, Dr. Ron Dembo, founder of Riskthinking.AI, a pioneering company specializing in climate risk data, introduces its groundbreaking digital twin platform—a unique tool designed to model the financial impacts of climate risk.

Unlike traditional forecasting, Riskthinking.AI uses stochastic modeling to anticipate a range of climate scenarios, emphasizing the importance of preparing for uncertainty rather than relying on singular predictions.

Dr. Dembo explains how aggregating data from multiple scientific models can create a comprehensive view of future risks, likening it to navigating turbulence on a flight path, where ongoing adjustments are crucial.

The conversation explores current pain points in the financial and insurance sectors, where conventional approaches often fail to account for physical climate risks adequately. Dr. Dembo emphasizes the critical need for financial institutions to better understand the physical assets of their counterparties and how stochastic analysis can significantly improve climate risk pricing.

He critically examines the current practices within banks, insurers, and regulators, revealing a significant gap in their mathematical capabilities to handle complex climate data, underscoring the urgent need for these institutions to adopt more sophisticated, data-driven methods to navigate an uncertain climate future effectively.

Explore their free interactive digital twin platform at https://ask.riskthinking.ai/

Watch the full interview:

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