This semester, my practicum project brings together climate science, finance, and the “now what?”. Working on climate scenario analysis, our team is translating physical climate hazard data into concrete, quantitative financial impacts. Our objective is to build a framework that communicates how climate change could eventually disrupt operations and erode value.
Climate scenario analysis has become key for companies seeking to manage long-term risk, but there is still a significant gap between high-level hazard analysis and actionable financial insights. Our work will focus on closing that gap through researching historical losses, identifying asset-specific failure modes, and developing “vulnerability profiles” that map hazard intensity to outcomes such as downtime, repair costs, and performance degradation. At its core, our work focuses on turning climate information into clear analysis for capital allocation and resilience planning.
Although I started at SIPA with a focus on security policy and economic development, I have found myself gravitating toward questions of climate change and the risks posed to development. This practicum has been my first opportunity to apply those academic concepts in a technical, private-sector context. At first glance, my previous experience in conflict resolution, international higher education policy felt far removed from financial modeling. However, I’ve found that many skills have transferred directly, particularly data analysis and the ability to synthesize complex information.
Learning to navigate resources like catastrophe databases and insurance reports has pushed me out of my comfort zone, in a way that will not only challenge me, but that I will learn from. Similar to my previous work experiences, there is an emphasis on evidence-based analysis. I have had to gather information, evaluate competing sources, and translate findings into recommendations. With the practicum, instead of assessing political dynamics or educational trends, I am evaluating hazard thresholds and economic loss datasets. One of the biggest surprises for me has been how nuanced “climate risk” becomes once you move from theory to implementation. Before beginning this project, I thought of climate impacts in general terms: floods are bad, heatwaves are disruptive, etc. Now, I better appreciate the differences and how the same hazard can affect two assets depending on design, location and operating characteristics.
Perhaps the most valuable aspect of the practicum has been exposure to the private sector, especially as a lever for climate action. Before, my experience focused on governments or NGOs, but with the practicum, I am seeing how investors and corporations make strategic decisions with differing levels of uncertainty. Understanding that research, and its applications, can help steer capital toward more sustainable and resilient outcomes has been an exciting experience.
As we move from the pilot phase toward scaling our methodology, I am excited to see how our work will take shape. This project has already deepened my understanding of climate risk, and shown me new ways that policy, data, and finance intersect.